Letters of Credit (UCC Article 5) 

California Codes > California Commercial Code > Division 5 > § 5118

  (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.
   (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
subdivision (a), the security interest continues and is subject to
Division 9 (commencing with Section 9101), subject to all of the
following:
   (1) A security agreement is not necessary to make the security
interest enforceable under paragraph (3) of subdivision (b) of
section 9203.
   (2) If the document is presented in a medium other than a written
or other tangible medium, the security interest is perfected.
   (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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See also:

California Commercial Code > Division 5 - Letters Of Credit

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