2016 New York Laws
UCC - Uniform Commercial Code
Article 5 - (Uniform Commercial Code) LETTERS OF CREDIT
5-117 - Subrogation of issuer, applicant, and nominated person.

Section 5--117. Subrogation of issuer, applicant, and nominated person.
(a) An  issuer  that honors a beneficiary's presentation is subrogated
  to the rights of the beneficiary to the same extent  as  if  the  issuer
  were  a  secondary  obligor  of  the  underlying  obligation owed to the
  beneficiary and of the applicant to the same extent  as  if  the  issuer
  were  the  secondary  obligor  of  the underlying obligation owed to the
  applicant.
(b) An applicant that reimburses an issuer is subrogated to the rights
  of the issuer against any beneficiary, presenter, or nominated person to
  the same extent as if the applicant were the secondary  obligor  of  the
  obligations  owed to the issuer and has the rights of subrogation of the
  issuer to the rights of the beneficiary stated in subsection (a) of this
  section.
(c) A nominated person who pays or gives  value  against  a  draft  or
  demand  presented  under  a letter of credit is subrogated to the rights
  of:
     (1) the issuer against the applicant to the same extent as if the
         nominated person were a secondary obligor of  the  obligation
         owed to the issuer by the applicant;
     (2) the beneficiary to the same extent as if the nominated person
         were a secondary obligor of the underlying obligation owed to
         the beneficiary; and
     (3) the  applicant  to the same extent as if the nominated person
         were a secondary obligor of the underlying obligation owed to
         the applicant.
(d) Notwithstanding any agreement or term to the contrary, the  rights
  of  subrogation stated in subsections (a) and (b) of this section do not
  arise until the issuer honors the letter of credit or otherwise pays and
  the rights in subsection (c) of this section  do  not  arise  until  the
  nominated  person pays or otherwise gives value. Until then, the issuer,
  nominated person, and the applicant do not  derive  under  this  section
  present  or prospective rights forming the basis of a claim, defense, or
  excuse.