Security Package & Loan Documentation
Conditions Precedent in Vessel Finance
Summary
Conditions precedent are the documents, confirmations and circumstances that must be satisfied or appropriately waived before loan drawdown or another specified action.
Why this matters in ship finance
They reduce the risk that funds are advanced before title, insurance and security arrangements are ready.
The concept
Typical requirements cover constitutional and board documents, legal opinions, title and mortgage documents, insurance, valuations, KYC/sanctions checks, charter arrangements and evidence of equity contribution.
How it is used in practice
Maintain a condition-by-condition closing tracker showing owner, form, satisfaction evidence, waiver authority and deadlines.
Practical issues
A condition precedent is not equivalent to a continuing covenant. Wrong-way waiver or late perfection can leave an unsecured exposure.
How ShipFinance.ai uses this concept
Provide a digital closing checklist with evidence links and unresolved legal blockers.
Key takeaways
- Drawdown and signing are separate
- Evidence of perfection matters
- Waivers should be formally authorised