Shipping Finance Documentation

This training aims to provide an understanding of the documentation involved and how this can be used to minimize the inherent risks and liabilities in such activities. You will return to your office equipped with the knowledge and skills required to operate effectively in the potentially lucrative field of ship finance.

CONTENT

The ship finance market

• What makes ship finance different?
• International nature of the business
• Some hedging options
• Transaction types

Flags & ship registration, security, second hand and newbuilding

• National, offshore and open registers
• Bareboat registration and the lender's perspective
• Basic security for second hand purchases
• Document structure
• Security for newbuilding finance

Loan Agreement Preliminary Issues

The basic security

• Mortgage
• Collateral assignments
• Share security

Enforcement

• Pre-enforcement options
• The lenders’ principal remedies

The security documents

Common provisions of basic security documents

Insurance covenants

• The standard marine risks
• Captive insurance companies and reinsurance
• The role of the letter of undertaking
• Fleet policies
• Mortgagee’s interest insurance
• Brokers and clubs

Trading the ship

• Different types of charter and other employment
• Pool agreements
• Ship managers
• Impact on bank’s security
• Treatment in loan and security documents

The loan – who is the borrower?

• Structural subordination
• Cross security
• Cross default
• Hazards of guarantees and third party security

Due diligence, conditions precedent & closing

• Where should due diligence be conducted?
• What should the legal opinion say?
• What should the conditions precedent be?
• Payment letters and simultaneous closing in different locations

TRAINING METHODOLOGY

The training methodology combines lectures, discussions, group exercises and illustrations. Participants will gain both theoretical and practical knowledge of the topics. The emphasis is on the practical application of the topics and as a result participant will go back to the workplace with both the ability and the confidence to apply the techniques learned to their duties.