1. A letter of credit described in paragraph (g) of subsection 1 of NRS 671.135 must: (a) Be issued by a federally insured depository financial institution, privately insured depository institution, a foreign bank that is authorized by federal law to maintain a federal agency or federal branch office in a state or a foreign bank that is authorized under the laws of a state to maintain a branch office in a state that: (1) Bears an eligible rating or whose parent company bears an eligible rating; and (2) Is regulated, supervised and examined by federal or state authorities having regulatory authority over banks and credit unions; (b) Be irrevocable, unconditional and indicate that it is not subject to any condition or qualification outside of the letter of credit; (c) Not contain any reference to any other agreement, document or entity, or otherwise provide for any security interest in the licensee; (d) Contain an issue date and expiration date, and expressly provide for automatic extension, without a written amendment, for an additional period of 1 year after the present or future expiration date, unless the issuer of the letter of credit notifies the Commissioner in writing by certified or registered mail, courier mail or other receipted means, at least 60 days before any expiration date that the irrevocable letter of credit will not be extended; and (e) Provide that the issuer of the letter of credit will honor, at sight, a presentation made by the beneficiary to the issuer of the following documents on or before the expiration date of the letter of credit: (1) The original letter of credit, including any amendments; and (2) A written statement from the beneficiary stating that any of the following events has occurred: (I) The filing of a petition by or against the licensee pursuant to the United States Bankruptcy Code for bankruptcy or reorganization; (II) The filing of a petition by or against the licensee for receivership or the commencement of any other judicial or administrative proceeding for the dissolution or reorganization of the licensee; (III) The Commissioner has taken possession of the business and property of a licensee pursuant to an order pursuant to NRS 671.425 on the basis of an action, violation or condition that has caused or is likely to cause the insolvency of the licensee; or (IV) The beneficiary has received notice of expiration or non-extension of a letter of credit and the licensee failed to demonstrate to the satisfaction of the beneficiary that the licensee will maintain permissible investments pursuant to subsection 2. 2. If the licensee notifies the Commissioner of the expiration or nonextension of a letter of credit pursuant to paragraph (d) of subsection 1, the licensee, at least 15 days before the expiration of the letter of credit, must demonstrate to the satisfaction of the Commissioner that the licensee maintains and will continue to maintain permissible investments as required by NRS 671.125 . If the licensee fails to make such a demonstration, the Commissioner may draw on the letter of credit in an amount up to the amount necessary to meet the requirement that the licensee maintain permissible investments pursuant to NRS 671.125 . The draw must be offset against the outstanding money transmission obligations of the licensee. The drawn money must be held in trust by the Commissioner or the designated agent of the Commissioner, to the extent authorized by law, as agent for the benefit of the purchasers and holders of the outstanding money transmission obligations of the licensee. 3. The Commissioner may designate an agent to serve on behalf of the Commissioner as beneficiary to a letter of credit so long as the agent and letter of credit meet any requirements established by the Commissioner. The agent may serve as agent for multiple licensing authorities for a single irrevocable letter of credit if the proceeds of the drawable amount for the purposes of this section are assigned to the Commissioner. 4. The Commissioner may participate in multistate processes designed to facilitate the issuance and administration of letters of credit, including, without limitation, services provided by the Registry and the State Regulatory Registry, LLC.
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