2006 New York Code - Security Interest Of Issuer Or Nominated Person.

 
  Section 5--118. Security Interest of Issuer or Nominated Person.
    (a)  An  issuer  or  nominated  person  has  a  security interest in a
  document presented  under  a  letter  of  credit  and  any  identifiable
  proceeds  of  the  collateral to the extent that the issuer or nominated
  person honors or gives value for the presentation.
    (b) Subject to subsection (a), as long as and to the  extent  that  an
  issuer  or nominated person has not been reimbursed or has not otherwise
  recovered the value given with respect  to  a  security  interest  in  a
  document  under  subsection  (a), the security interest continues and is
  subject to Article 9, but:
         (1) a security agreement is not necessary to  make  the  security
             interest enforceable under Section 9--203(b)(3);
         (2) if the document is presented in a medium other than a written
             or other tangible medium, the security interest is perfected;
             and
         (3)  if  the document is presented in a written or other tangible
             medium and is not a certificated security, chattel  paper,  a
             document  of  title, an instrument, or a letter of credit, so
             long as the debtor does not have possession of the  document,
             the  security  interest  is perfected and has priority over a
             conflicting security interest in the document.