Does a letter of credit need to be transferred or assigned?

[55 Cal.App.4th 1192] The difference between transferring a letter of credit and assigning its proceeds is that "[a] transfer effectuates a more complete change. The transferee is effectively substituted for the original beneficiary. After transfer, it is the transferee who must present the draft and documentation to cause payment. Such transfer may be made to a new substituted beneficiary only if the letter of credit 'is expressly designated as "transferable" by the issuing bank.' UCP-ICC Article 54(b).... An assignment of proceeds, by contrast, changes only the party entitled to receive payment of the proceeds. In spite of assignment, only the named beneficiary may draw the draft in favor of the assignee. Such assignments are commonplace. Beneficiaries of letters of credit commonly borrow from 'negotiating banks' against assignment of the proceeds of letters of credit. It is a conventional financing device for beneficiaries of letters of credit to preserve liquidity by borrowing from 'negotiating banks' against assignment of the proceeds. The negotiating bank thus becomes entitled to collect the proceeds when the beneficiary has complied with the obligations of the letter of credit. [Citations.] Such assignment of proceeds may be made regardless whether the credit provides on its face for 'transferability.' UCP-ICC Article 55...." (Algemene Bank v. Soysen Tarim Urunleri Dis Ticaret (S.D.N.Y.1990) 748 F.Supp. 177, 182.)