New York Laws
Article 5 - Letters of Credit
5-118 - 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 and any identifiable
proceeds of the collateral to the extent that the issuer or nominated
person honors or gives value for the presentation.
(b) Subject to subsection (a), 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 Article 9, but:
(1) a security agreement is not necessary to make the security
interest enforceable under Section 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, 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.