Ohio Code § 1305.16

§ 1305.16.

(A) An issuer that honors a beneficiary's presentation is subrogated to the rights of

the beneficiary to the same extent as if the issuer were a secondary obligor of the

underlying obligation owed to the beneficiary and of the applicant to the same extent

as if the issuer were the secondary obligor of the underlying obligation owed to the

applicant. (B) An applicant that reimburses an issuer is subrogated to the rights of the issuer

against any beneficiary, presenter, or nominated person to the same extent as if the

applicant were the secondary obligor of the obligations owed to the issuer and has

the rights of subrogation of the issuer to the rights of the beneficiary stated in

division (A) of this section. (C) A nominated person who pays or gives value against a draft or demand presented under

a letter of credit is subrogated to the rights of: (1) The issuer against the applicant to the same extent as if the nominated person were

a secondary obligor of the obligation owed to the issuer by the applicant; (2) The beneficiary to the same extent as if the issuer were a secondary obligor of the

underlying obligation owed to the beneficiary;  and (3) The applicant to the same extent as if the nominated person were the secondary obligor

of the underlying obligation owed to the applicant. (D) Notwithstanding any agreement or term to the contrary, the rights of subrogation

stated in divisions (A) and (B) of this section do not arise until the issuer honors

the letter of credit or otherwise pays and the rights in division (C) of this section

do not arise until the nominated person pays or otherwise gives value.  Until then, the issuer, nominated person, and the applicant do not derive under

this section present or prospective rights forming the basis of a claim, defense,

or excuse.