Transferable Letter of Credit

A transferable Letter of Credit is one that can be transferred in full or partially by the original beneficiary to one or more second beneficiaries. Such Letters of Credit are usually issued when the ultimate buyer needs a type of commodity or goods but can only buy them through an intermediary because the latter has a relationship or sole distributor rights with the manufacturers or producers of such goods. Under such arrangements the intermediary commits to a small amount of funds to the transaction without divulging data related to the Ultimate Buyer and Ultimate Seller.