This excerpt taken from the VRSN 10-Q filed Nov 7, 2008.
We may encounter problems renewing irrevocable letters of credit provided by customers of our Naming Services business as security for payment of registration fees if we are forced to draw down on such letters of credit to collect payment.
With respect to our Naming Services business, some registrars who register domain names on behalf of their customers utilize irrevocable letters of credit to secure payment for the registration of domain names. In the event that we are unable to obtain payment for the registration of these domain names, we may draw down on the letter of credit. In some cases, withdrawals may be made until we utilize the full amount of the letter of credit, at which point the registrars ability to process new billable transactions and their agreement may be terminated. Registrars may be unwilling or unable to provide new letters of credit once we have drawn down the full amount of these letters of credit, which could negatively impact future revenues.