§ 554.5114

554.5114 Assignment of proceeds. 1. In this section, 'proceeds of a letter of credit' means the cash, check, accepted draft, or other item of value paid or delivered upon honor or giving of value by the issuer or anynominated person under the letter of credit. The term does not include a beneficiary’sdrawing rights or documents presented by the beneficiary. 2. A beneficiary may assign its right to part or all of the proceeds of a letter of credit. The beneficiary may do so before presentation as a present assignment of its right to receiveproceeds contingent upon its compliance with the terms and conditions of the letter of credit. 3. An issuer or nominated person need not recognize an assignment of proceeds of a letter of credit until it consents to the assignment. 4. An issuer or nominated person has no obligation to give or withhold its consent to an assignment of proceeds of a letter of credit, but consent may not be unreasonably withheld ifthe assignee possesses and exhibits the letter of credit and presentation of the letter of creditis a condition to honor. 5. Rights of a transferee beneficiary or nominated person are independent of the beneficiary’s assignment of the

the letter of credit and presentation of the letter of creditis a condition to honor. 5. Rights of a transferee beneficiary or nominated person are independent of the beneficiary’s assignment of the proceeds of a letter of credit and are superior to theassignee’s right to the proceeds. 6. Neither the rights recognized by this section between an assignee and an issuer, transferee beneficiary, or nominated person nor the issuer’s or nominated person’s paymentof proceeds to an assignee or a third person affect the rights between the assignee and anyperson other than the issuer, transferee beneficiary, or nominated person. The mode ofcreating and perfecting a security interest in or granting an assignment of a beneficiary’srights to proceeds is governed by Article 9 or other law. Against persons other than theissuer, transferee beneficiary, or nominated person, the rights and obligations arising uponthe creation of a security interest or other assignment of a beneficiary’s right to proceedsand its perfection are governed by Article 9 or other law. [C66, 71, 73, 75, 77, 79, 81, §554.5114]89 Acts, ch 113, §55; 96 Acts, ch 1026, §13, 28Referred to in §539.1, 539.2, 554.5103, 554.9102,

eedsand its perfection are governed by Article 9 or other law. [C66, 71, 73, 75, 77, 79, 81, §554.5114]89 Acts, ch 113, §55; 96 Acts, ch 1026, §13, 28Referred to in §539.1, 539.2, 554.5103, 554.9102, 554.9107, 554.9109 Sat Dec 23 01:57:41 2023 Iowa Code 2024, Section 554.5114 (24, 0)