This document discusses different types of letters of credit used in international trade. It describes letters of credit as a means of payment security for exporters where payment is made after goods are transported. The document focuses on standby letters of credit, which guarantee payment to the seller if the buyer defaults, unlike regular letters of credit which are payment methods. A standby letter of credit is issued by the buyer's bank to guarantee payment to the seller if the buyer fails to meet the terms of the purchase agreement.