(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.

Terms Used In Ohio Code 1305.18

  • 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 that is (a) 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 division (E) of section 1305. See Ohio Code 1305.01
  • Issuer: means a bank 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 Ohio Code 1305.01
  • Letter of credit: means a definite undertaking that satisfies the requirements of section 1305. See Ohio Code 1305.01
  • Nominated person: means a person whom the issuer (a) designates or authorizes to pay, accept, negotiate, or otherwise give value under a letter of credit and (b) undertakes by agreement or custom and practice to reimburse. See Ohio Code 1305.01
  • Person: includes an individual, corporation, business trust, estate, trust, partnership, and association. See Ohio Code 1.59
  • Presentation: means delivery of a document to an issuer or nominated person for honor or giving of value under a letter of credit. See Ohio Code 1305.01

(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 division (A) of this section, the security interest continues and is subject to Chapter 1309 of the Revised Code, but:

(1) A security agreement is not necessary to make the security interest enforceable under division (B)(3) of section 1309.203 of the Revised Code;

(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.