What is an RWA (ready, willing and able)?
RWA · Ready, Willing and Able
A message, usually by SWIFT, in which a buyer’s bank indicates it is ready, willing and able to proceed with a specified instrument. Its value depends entirely on the SWIFT message type used.
Key points
- MT799 is authenticated free-format text — no obligation.
- MT700 is the credit itself, which does bind the issuing bank.
- An RWA with no SWIFT reference is just a comfort letter.
At a glance
| Issued by | The buyer’s bank |
|---|---|
| Usual format | SWIFT MT799, free-format |
| Binding | No — MT700 is the binding message |
| Legitimate use | Sequencing, so neither party commits first |
| Not sufficient for | Shipping, or irrevocably allocating a cargo |
What the message says
An RWA is issued by the buyer’s bank and states that it is ready, willing and able to proceed with a named instrument — typically a documentary credit — for a stated amount and transaction, subject to the usual internal approvals and compliance.
It sits between a comfort letter and an actual credit. More substantial than the first, because it comes through banking channels and identifies the instrument; well short of the second, because it commits the bank to nothing and is normally qualified by conditions the bank alone judges.
The message type is the whole question
An RWA sent as a SWIFT MT799 is a free-format message between banks. It is authenticated, so the seller’s bank can confirm it genuinely came from the issuing bank — but the content is prose, and prose creates no obligation. Most RWAs are MT799.
An MT700 is different in kind: it is the issuance of a documentary credit, and it binds the issuing bank to pay against compliant documents. If what arrives is an MT700, the buyer has not signalled willingness — it has opened the credit. Anything presented as an RWA on letterhead or by email, with no SWIFT reference at all, is a comfort letter wearing a better name.
Using it sensibly
The legitimate use is sequencing. Neither side wants to move first: the buyer resists paying LC issuance costs before the seller has committed the cargo, and the seller resists committing the cargo before it knows the buyer can pay. An authenticated MT799 lets the buyer show its bank is engaged without incurring the full cost.
Treat it as a step, never as security. Nothing should ship, and no cargo should be irrevocably allocated, against an RWA. The point at which the seller’s exposure is covered is the operative credit, and until an MT700 exists the seller is relying on the buyer’s intentions.
Frequently asked questions
- Is an RWA the same as a letter of credit?
- No. An RWA signals that the bank is prepared to issue one. The credit exists when the bank transmits an MT700, and only then is the bank obliged to pay against compliant documents.
- What is the difference between an RWA and a BCL?
- Channel and specificity. An RWA normally arrives as an authenticated SWIFT message naming the instrument and amount, so the seller’s bank can confirm its origin. A comfort letter is a PDF on letterhead. Neither binds the bank.
- Should I ship against an RWA?
- No. Wait for the operative instrument. Until the credit is issued the bank owes you nothing, and an MT799 is a statement of present willingness that can be withdrawn.
Related terms
A letter from a buyer’s bank indicating the buyer has funds or capacity for a transaction. It is not an undertaking to pay, carries no liability for the bank, and is treated with corresponding scepticism.
A bank undertaking to pay the seller once compliant documents are presented. It substitutes the bank’s credit for the buyer’s, which is why it remains the default instrument between counterparties trading together for the first time.
A buyer’s purchase order, issued on company letterhead and described as irrevocable. Despite the name it binds nobody until a seller accepts it, and in physical commodity trading it functions as a more formal-looking letter of intent.
Know Your Customer and Know Your Business: verification of identity, ownership and sanctions status of a counterparty before contracting. A cargo can be frozen mid-voyage over a party that should never have entered the chain.
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