Counter-Standby

Counter-Standby: A standby letter of credit used to support another standby letter of credit. It provides a backup guarantee for the original standby letter of credit.

Key points:

• Served as a secondary assurance.
• Used in banking transactions.
• Acts as a financial safeguard.
• Common in international trade.

Examples:

• International transactions involving large corporations.
• Instances where the initial creditworthiness is in doubt.
• Situations requiring reinforcement of payment guarantees.