Section 5--117. Subrogation of issuer, applicant, and nominated person.\n (a) An issuer that honors a beneficiary's presentation is subrogated\nto the rights of the beneficiary to the same extent as if the issuer\nwere a secondary obligor of the underlying obligation owed to the\nbeneficiary and of the applicant to the same extent as if the issuer\nwere the secondary obligor of the underlying obligation owed to the\napplicant.\n (b) An applicant that reimburses an issuer is subrogated to the rights\nof the issuer against any beneficiary, presenter, or nominated person to\nthe same extent as if the applicant were the secondary obligor of the\nobligations owed to the issuer and has the rights of subrogation of the\nissuer to the rights of the beneficiary stated in subsection (a) of this\nsection.\n (c) A nominated person who pays or gives value against a draft or\ndemand presented under a letter of credit is subrogated to the rights\nof:\n (1) the issuer against the applicant to the same extent as if the\n nominated person were a secondary obligor of the obligation\n owed to the issuer by the applicant;\n (2) the beneficiary to the same extent as if the nominated person\n were a secondary obligor of the underlying obligation owed to\n the beneficiary; and\n (3) the applicant to the same extent as if the nominated person\n were a secondary obligor of the underlying obligation owed to\n the applicant.\n (d) Notwithstanding any agreement or term to the contrary, the rights\nof subrogation stated in subsections (a) and (b) of this section do not\narise until the issuer honors the letter of credit or otherwise pays and\nthe rights in subsection (c) of this section do not arise until the\nnominated person pays or otherwise gives value. Until then, the issuer,\nnominated person, and the applicant do not derive under this section\npresent or prospective rights forming the basis of a claim, defense, or\nexcuse.\n
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