is a letter of credit considered the same as a supercedeas bond?
differecences between banker's acceptance and letter of credit
nothing
Buyer's credit is extended to finance the purchase of goods or services. A letter of credit guarantees that a payment will be received. If the buyer doesn't make a payment, the bank has to pay.
Both Letter of Credit and Letter of Guarantee are commitment to payment by the issuer of the instrument (generally a Bank). In letter of credit, the issuer has to fulfill his commitment on fulfilling the terms and conditions of the letter of credit by the beneficiary. Whereas, on the other hand, in letter of guarantee the issuer has to make payment, when the beneficiary is unable to fulfill the terms & conditions of the letter of guarantee.
A red clause letter of credit is similar to a letter of Credit which is written to state or confirm the availability of funds for a particular transaction between the seller and buyer. However, a clause is included in the letter stating that the stated amount or credit can be advanced immediately on showing the letter.