(a) An issuer or nominated person has a security interest in a document presented under a letter of credit to the extent that the issuer or nominated person honors or gives value for the presentation.
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Terms Used In Alabama Code 7-5-118

(b) So long as and to the extent that an issuer or nominated person has not been reimbursed or has not otherwise recovered the value given with respect to a security interest in a document under subsection (a), the security interest continues and is subject to Article 9A, but:

(1) a security agreement is not necessary to make the security interest enforceable under Section 7-9A-203(b)(3);
(2) if the document is presented in a medium other than a written or other tangible medium, the security interest is perfected; and
(3) if the document is presented in a written or other tangible medium and is not a certificated security, chattel paper, a document of title, an instrument, or a letter of credit, the security interest is perfected and has priority over a conflicting security interest in the document so long as the debtor does not have possession of the document.
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