performance of the issuer's undertaking in the letter of credit to pay or deliver an item of value. Unless the letter of credit otherwise provides, "honor" occurs

1. upon payment,
   
   
2. if the letter of credit provides for acceptance, upon acceptance of a draft and, at maturity, its payment, or
   
   
3. if the letter of credit provides for incurring a deferred obligation, upon incurring the obligation and, at maturity, its performance