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 Incoterms

A set of international commercial terms defining the costs, obligations and passage of title of a shipment of goods (e.g. FOB – Free on Board; CIF – Cost, Insurance and Freight; DES – Delivered Ex Ship).

 Indicative terms

The likely commercial terms upon which a bank will lend, subject to its internal credit approval or other conditions.  It is not a firm offer to lend or arrange a loan.

 Irrevocable Letter of Credit

A letter of credit in which the bank guarantees that the exporter will be paid if the required documents are presented, and the terms and conditions complied with.  An irrevocable letter of credit cannot be changed or cancelled without the consent of all parties involved.

 Isabella clause

A standard feature of a Buyer credit, it is a clause under a supply contract that separates the obligations, rights, and responsibilities under the contract from those under the associated loan agreement. It means that the buyer is legally obliged to repay the loan even in the event of the buyer disputing the delivery of the goods or services under the terms of the supply contract.  In other words, problems with the contract or project do not give the borrower any right to default or delay payment on the loan or to suspend repayments.

 Issuing bank

Under a letter of credit, the issuing bank provides the guarantee to the exporter that, conditional on the compliant documents being properly presented, it will pay the exporter the amount due (through the advising bank).  Unless the letter of credit is conditional, the issuing bank effectively assumes the risk of default by the buyer, provided that the terms and conditions of the letter of credit are fully met.