The Fronting Letter of Credit is essential in international trade finance where a local bank's credit standing or presence is required in the beneficiary's jurisdiction. This document is utilized when the instructing bank lacks direct presence or requires the services of a more established bank in a particular market. The arrangement involves the fronting bank issuing the letter of credit based on a counter-guarantee from the instructing bank. Subject to Swiss law, the document details the credit terms, documentary requirements, and payment conditions, incorporating UCP 600 rules and Swiss banking regulations. It's particularly valuable in transactions requiring enhanced credibility or local regulatory compliance, offering beneficiaries the security of dealing with a reputable Swiss banking institution.

1. Bank Letterhead and Date: Official letterhead of the fronting bank with current date

2. Addressee Details: Complete details of the beneficiary including name, address and reference numbers

3. Reference Line: Letter of Credit number, transaction reference, and any other relevant identifying numbers

4. Subject Line: Clear indication that this is a Fronting Letter of Credit with amount and currency

5. Credit Terms: Essential terms including amount, expiry date, and form of the credit (irrevocable/transferable)

6. Underlying Transaction: Brief description of the commercial transaction being supported

7. Counter-Guarantee Details: Reference to the counter-guarantee or back-to-back LC from the instructing bank

8. Documentary Requirements: List of required documents for drawing under the credit

9. Payment Terms: Specific conditions and timing of payment

10. Bank Undertaking: Formal undertaking by the fronting bank to honor compliant presentations

11. Governing Law Statement: Clear statement that Swiss law governs the credit

12. UCP 600 Reference: Statement incorporating UCP 600 rules

13. Authorized Signature Block: Space for bank officer signatures and bank stamp