A Practice Note providing an overview of standby letters of credit, also known as standby credits, which are frequently used to support payment obligations and performance obligations in trade transactions. This Note examines the structure of standby letter of credit transactions and the independence principle that underlies the relationship between the letter of credit and the commercial transaction it supports, as well as detailing the provisions of the Uniform Commercial Code (UCC) and the International Standby Practices (ISP98) that apply to most standby transactions. It focuses on the parties, processes, and documents involved and includes a detailed analysis of the elements of a standby letter of credit.