Using Letters of Credit for Tenant Credit Enhancement

Volume 27 No. 3


Michael K. Kuhn is a partner and Kati L. Freeman an associate with the Houston, Texas, firm of Jackson Walker L.L.P.

Cash security deposits have been the traditional form of tenant credit enhancement required by commercial landlords, but, in instances when landlords feel more at risk, a letter of credit is a common alternative or additional enhancement and, in some instances, may be favored over a cash security deposit.

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