Difference between revisions of "Back to Back Documentary Credit"
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Latest revision as of 23:02, 10 February 2020
Definition
Back-to-Back Documentary Credit. When a vendor obtains an ordinary documentary credit from the buyer's financial institution, he/she can use this as security with its own financial institution. With this documentary credit serving as collateral, the vendor's financial institution can then issue a second documentary credit in favor of the vendor's vendors.