HRS §490:5-118
When a bank or issuer gets a security interest in a letter of credit document
This section says that when a bank or other issuer pays or gives value for a document under a letter of credit, it automatically gets a security interest in that document. That interest lasts until the bank is paid back. The interest is valid even without a separate security agreement, and in some cases it is automatically perfected.
creditorsdebtorsfinancial institutions
The statute, as written — 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 to the extent that the issuer or nominated person honors or gives value for the presentation. (b) So 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 490:9-203(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, the security interest is perfected and has priority over a conflicting security interest in the document so long as the debtor does not have possession of the document.
Sections this one refers to
§490:9-203 When a security interest becomes valid and attached
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