The Letter of credi Irrevocable versus revocable irre vocable letter cannot be cancelled guaranteeing payment Confirmed versus unconfirmed U.s. bank confirms letter assumes collection risk Revolving versus nonrevolving Most letters are nonrevolving- good only for a single transaction Copyright 2001 by Harcourt, Inc. All rights reserved 11-12Copyright © 2001 by Harcourt, Inc. All rights reserved. 11-12 The Letter of Credit Irrevocable versus revocable • irrevocable letter cannot be cancelled, guaranteeing payment Confirmed versus unconfirmed • U.S. bank confirms letter, assumes collection risk Revolving versus nonrevolving • Most letters are nonrevolving- good only for a single transaction