Letter of Credit

A commitment, usually issued by a commercial bank, used to guarantee payment of the payment of the Principal and Interest on a Bond Issue provided that the conditions set out in the documentation for the Letter of Credit (often called a Reimbursement Agreement) are satisfied.

See Also

Credit Enhancement

The use of the credit of an entity having greater financial strength than the issuer or borrower to improve the credit quality of a bond issue.


A third party’s promise to pay the debt service on the bonds or perform some other obligation, which is the primary obligation of another party.

Hudson Yards Rail Yards

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Term of the Week


A meeting of all the parties prior to the closing, often held the day before the closing.