Standby Letters of Credit (SBLC)

What it is

A Standby Letter of Credit is a guarantee of last resort. Kingstar commits to pay the beneficiary if our client fails to meet an agreed obligation — payment, performance, or delivery. Unlike a commercial LC, it's designed not to be drawn: it sits in the background as assurance, and pays out only if the underlying obligation is missed.

Common uses

• Guaranteeing payment under a supply contract
• Backing performance on a project or service agreement
• Supporting bids, advance payments, or lease obligations

How it works

1. 01

   Request

   Client requests an SBLC in favour of a counterparty.

2. 02

   Issue

   Kingstar issues it under agreed terms (typically ISP98 or UCP 600).

3. 03

   Standby

   It remains undrawn while obligations are met.

4. 04

   Draw on default

   If the client defaults, the beneficiary presents documents and is paid.

Benefits

• Counterparty assurance without upfront cash
• Recognised internationally
• Flexible to payment or performance obligations