62-5-11. Requirements for acceptance of irrevocable letter of credit--Definitions.
As used in §§62-5-10 to 62-5-16, inclusive, an irrevocable letter of credit shall be accepted only if it is clean, irrevocable, and contains an evergreen clause.
Terms used in §§62-5-10 to 62-5-16, inclusive, mean:
(1)"Clean," a letter of credit that is not conditioned on the delivery of any other documents or materials;
(2)"Irrevocable," a letter of credit that cannot be modified or revoked without the consent of the beneficiary, once the beneficiary is established;
(3)"Evergreen clause," a clause specifically stating that the expiration of a letter of credit will not take place without a sixty-day notice by the issuer. If prior notice of expiration is not given by the issuer, the letter of credit is automatically extended for one year.
A clean irrevocable letter of credit shall be accepted only if it is in the form prescribed by §§62-5-10 to 62-5-16, inclusive, and is issued by a financial institution that is authorized to engage in banking in any of the fifty states or under the laws of the United States and whose business is substantially confined to banking, and that has a long-term debt rating by a recognized national rating agency of investment grade or better. If no long-term debt rating is available, the financial institution shall have the equivalent investment grade financial characteristics.
Source: SL 1989, ch 453, §3; SL 2017, ch 219, §1.