Security Package & Loan Documentation
Account Pledges and Controlled Accounts
Summary
An account pledge or charge grants a lender security over specified bank-account rights, often supported by cash-management and control provisions.
Why this matters in ship finance
It can secure charter receipts, reserves and cash-sweep proceeds and strengthen the lender’s ability to manage proceeds following default.
The concept
Structures may involve blocked accounts, collection accounts, designated revenues, account-bank acknowledgements and contractual set-off provisions. Perfection depends on law and account location.
How it is used in practice
Confirm account identity, signatories, permitted withdrawals, bank set-off, required notices, deposit insurance or bank failure exposure.
Practical issues
An account described as controlled may not create perfected security; balance ownership and cash accessibility must be checked separately.
How ShipFinance.ai uses this concept
Model cash availability by account and restrictions under normal and default conditions.
Key takeaways
- Account controls must be enforceable
- Cash location and bank quality matter
- Restricted cash may not support liquidity ratios