CORPORATE AND INSTITUTIONAL FAQS

For assistance with tracking transaction documents, please contact one of our trained customer services representatives.

For assistance with a payment status, please contact one of our trained customer services representatives.

To confirm a letter of credit issue, please contact one of our trained customer services representatives.

For more information about issuing a letter of credit, please visit our Letters of Credit page.

For more information on financing a transaction, please visit our Structured Trade Finance page.

Wachovia has always had a strong commitment and strategy for using and developing technology-based trade solutions and processing.  Our innovation and commitment to technology has positioned us as one of the world's leading providers of trade solutions. In fact, Wachovia was the first bank in the world to allow companies to initiate letters of credit on the Internet.

Our technology for trade solutions is designed to have the following characteristics:

• Flexible: Web-based; multifunctional; covers all terms of trade
• Simple: Allows for diverse operating models; user friendly
• Scalable: Adaptable to different business models; built on constant change and listening to our clients
• Value: Adds efficiency; improves accuracy; simplifies process; controls costs, provides better  information flow

For more details on our Online capabilities, please visit our TradeXchange page.

Wachovia offers a full array of currency hedging tools to meet your particular needs, including spot, forward, options, collars, and interest rate swaps, as well as foreign currency money market accounts and CDs so you can earn interest in a foreign denomination and hold the balance for later use. For further details please visit our foreign exchange site at www.wachovia.com/foreignexchange.

Unlike a transfer of a letter of credit, which is governed by the desire of the applicant and issuing and advising banks, assignment of proceeds is at the discretion of the beneficiary.

Under Article 39, UCP 600, the beneficiary is entitled to assign any proceeds to which he may be, or may become, entitled under such credit, in accordance with the provisions of the applicable laws.

In order to assign any proceeds from a letter of credit drawing, the beneficiary must apply to the advising bank and agree, among other things, that the assignment is irrevocable. The bank that assigns the proceeds must authenticate the request, acknowledge the assignment to the assignee, mark the assignment on the original credit, and notate their records.

While this document assures that the original beneficiary will not receive more than his share of a drawing, it does not guarantee payment unless documents are presented in accordance with terms and conditions and if the L/C is unconfirmed, funds are received from the issuing bank.

Unless the assignee has absolute confidence in the assignor’s performance, assignment of proceeds is a weak instrument at best.

The process of assigning the letter of credit is fully supported by our Export Services internet trade tool.

A transferable letter of credit is one that can be transferred by the original (first) beneficiary to one or more second beneficiaries (Article 38, UCP600). It is normally used when the first beneficiary is a middle man only, and not involved with manufacturing the merchandise. Transferable letters of credit are a tool used by trading companies, or other third parties, to facilitate a trade transaction.

This type of credit can only be transferred once. For example, the second beneficiary (or manufacturer) cannot transfer to a third beneficiary. The transfer must be effected in accordance with the terms of the original credit, subject to the following exceptions:

• The name and address of the first beneficiary may be substituted for that of the applicant for the credit
• The amount of the credit and any unit price may be reduced; this would enable the first beneficiary to allow for his profit
• The period of validity and the period for shipment may be shortened

It should be noted that a credit would only be issued as transferable upon the specific instructions of the applicant. This would mean that both the credit application form and the credit itself must clearly state that the credit is transferable.

The transfer is effected upon the written instructions of the first beneficiary by the bank where the credit is available.

Thus, it permits a credit to be arranged by the first beneficiary in favor of one or more beneficiaries, while allowing the first beneficiary to substitute invoices and other documents for those presented by the second beneficiary. The bank must then correlate and check both invoices and all documentation to ensure that all documents comply with the original terms and conditions of the credit.

The process to transfer the letter of credit is fully supported by our Export Services internet trade tool.

A Banker’s Acceptance (BA) is a method of financing Wachovia may provide to its customers to support their short-term (six months or less) trade transactions. A Banker’s Acceptance is a time draft drawn on, and accepted by, a bank. The bank, as drawee of the draft, indicates its acceptance of the obligation by stamping the word “accepted” on the face of the draft, dating and signing it. By accepting the draft, the bank signifies its commitment to pay the stated amount of the draft on a specified future date. The company for whom the draft is accepted (drawer) may have the draft held until maturity to collect the full amount, or may discount the acceptance and collect immediate payment, less applicable discount rate.

BAs typically arise out of one of the following situations:

1. Banker’s Acceptance under a Letter of Credit – Wachovia accepts a time draft drawn on itself by a beneficiary under a letter of credit, considering the credit specifies that drafts are to be drawn on Wachovia. This type of BA is used when the applicant of the letter of credit (the buyer of goods) has been granted extended payment terms by the beneficiary (the seller of the goods) with the provision that a bank credit obligation be provided. By accepting the draft, Wachovia promises to pay the full draft amount to the beneficiary on the stated maturity date of the draft, unless it was previously discounted. An exporter can negotiate to extend terms to his buyer using a letter of credit that calls for payment at a future date (e.g., 90 days from sight, 60 days from B/L, etc.) rather than at sight. These time drafts can be discounted if properly structured, and by building this cost into an all-in price, the exporter may be able position its sale more favorably.

2. Clean/Prime Banker’s Acceptances – Wachovia accepts a time draft drawn on itself by one of its qualified borrowers. Wachovia discounts the draft. To that discount rate, the bank adds its acceptance commission. The borrower then receives the net proceeds from the transaction. The borrower repays Wachovia the face amount at maturity. This type of acceptance can occur anytime a qualified borrower has Fed-designated eligible transactions to finance.