preadvice

Preliminary information about a letter of credit (L/C) sent by the issuing bank to the advising bank where time is short. It notifies the recipient that the named buyer has opened an L/C of a specified amount for a named seller (beneficiary), and usually includes the statement "the credit will follow" or words to the effect. Depending on the jurisdiction, a preadvice may or may not irrevocably commit the issuing bank to actually issue the said L/C. Therefore, the advising bank generally does not issue an advice of credit but only notifies the beneficiary of the receipt of preadvice so that he or she (if willing) may proceed with the processing of the buyer's order. Also called preliminary advice.