Louisiana Revised Statutes 10:5-118 – Security interest of issuer or nominated person
Terms Used In Louisiana Revised Statutes 10:5-118
- Document: means a draft or other demand, document of title, investment security, certificate, invoice, or other record, statement, or representation of fact, law, right, or opinion (i) which is presented in a written or other medium permitted by the letter of credit, or unless prohibited by the letter of credit, by the standard practice referred to in La. See Louisiana Revised Statutes 10:5-102
- Issuer: means a financial institution or other person that issues a letter of credit, but does not include an individual who makes an engagement for personal, family, or household purposes. See Louisiana Revised Statutes 10:5-102
- Letter of credit: means a definite undertaking that satisfies the requirements of La. See Louisiana Revised Statutes 10:5-102
- Nominated person: means a person whom the issuer (i) designates or authorizes to pay, accept, negotiate, or otherwise give value under a letter of credit and (ii) undertakes by agreement or custom and practice to reimburse. See Louisiana Revised Statutes 10:5-102
- person: includes a body of persons, whether incorporated or not. See Louisiana Revised Statutes 1:10
- Presentation: means delivery of a document to an issuer or nominated person for honor or giving of value under a letter of credit. See Louisiana Revised Statutes 10:5-102
(a) An issuer or nominated person has a security interest in a document presented under a letter of credit and any identifiable proceeds of the collateral to the extent that the issuer or nominated person honors or gives value for the presentation.
(b) Subject to subsection (c), as 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 under subsection (a), the security interest continues and is subject to Chapter 9, but:
(1) a security agreement is not necessary to make the security interest enforceable under La. Rev. Stat. 10:9-203(b)(3); and
(2) the security interest is perfected and has priority over conflicting security interests in the collateral or its proceeds.
(c) A security interest that arises under this section is subject to the rights of a subsequent purchaser under La. Rev. Stat. 10:9-330 or 9-331 or a transferee under La. Rev. Stat. 10:9-332.
Acts 2001, No. 128, §7, eff. July 1, 2001.