The security review clause, clause 7, contains provisions for the benefit of the Beneficiary that enable the Beneficiary to review the adequacy and value of the security represented by the letter of credit. The general right of review is applicable on or after the fifth anniversary of the date of the letter of credit and there is also a specific provision which applies at any time following the second anniversary of the date of the letter of credit in circumstances where the Issuer's credit rating has fallen below AA[min]. To the extent that the Issuer's credit rating fell below this threshold, it would be of concern to the Beneficiary as it might operate as an early warning that the Issuer may encounter problems meeting any demand made under the letter of credit. In the event that the Beneficiary was concerned for any reason as to the Issuer's ability to pay under the letter of credit, under the security review provisions it could require the Issuer to arrange a substitute letter of credit or require a cash deposit to be placed in a nominated account for the benefit of the Beneficiary as substitute security for the letter of credit.
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