1. (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.

2. (b) Subject to subsection (c), 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 Chapter 9, but:

   1. (1) a security agreement is not necessary to make the security interest enforceable under Section 36-9-203(b)(3);
   2. (2) if the document is presented in a medium other than a written or other tangible medium, the security interest is perfected; and
   3. (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.

HISTORY: 2001 Act No. 67, Section 15. "Certificated security" Section 36-8-102(a)(4) "Chattel paper" Section 36-9-102(a)(11) "Debtor" Section 36-9-102(a)(28) "Document" Section 36-5-102(a)(6) "Document of title" Sections 36-7-102(1)(e) and 36-1-201(15) "Honor" Section 36-5-102(a)(8) "Instrument" Section 36-9-102(a)(47) "Issuer" Section 36-5-102(a)(9) "Letter of Credit" Section 36-5-102(a)(10) "Nominated person" Section 36-5-102(a)(11) "Presentation" Section 36-5-102(a)(12) "Security agreement" Section 36-9-102(a)(73) "Security interest" Section 36-1-201(37) [see now Section 36-1-203] "Value" Sections 36-5-102(b), 36-3-303, 36-4-208 and 36-4-209.