Evergreen or Expired? Courts Strictly Construe Auto-Extension Clauses in Letters of Credit

A January 2026 decision from the U.S. District Court for the Southern District of New York held that an auto-extension clause in a letter of credit did not create an evergreen instrument (resulting in the letter of credit’s expiration after a single, one-year extension even though the issuing bank never sent a notice of nonrenewal to the beneficiary).... By: Skadden, Arps, Slate, Meagher & Flom LLP