Ship Finance
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Ship Finance Fundamentals
What Is Ship Finance?
Ship finance is the discipline of providing debt and equity capital to acquire, build, operate, refinance and dispose of ocean-going and other commercial…
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Ship Finance Fundamentals
Why Ship Finance Is Different from Traditional Corporate Lending
Traditional corporate lending relies on a diversified business, stable earnings and a balance sheet that can absorb shocks.
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Ship Finance Fundamentals
Asset-backed Lending in Shipping
Asset-backed lending in shipping is a form of secured credit in which the vessel itself is the principal source of security and, in many transactions,…
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Ship Finance Fundamentals
Recourse and Non-recourse Structures in Shipping
A recourse structure allows a lender to pursue a borrower or sponsor for repayment beyond the specific asset that secures the loan.
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Credit Risk & Underwriting
Charterer Risk
Charterer risk is the risk that the counterparty on a vessel’s charter fails to perform its contractual obligations, materially reducing the earnings…
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Credit Risk & Underwriting
Residual Value Risk
Residual value risk is the risk that a vessel’s market value at a specified future date is lower than assumed at the time of financing.
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Security Package & Loan Documentation
Ship Mortgages Explained
A ship mortgage is a registered security interest over a vessel.
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Security Package & Loan Documentation
Financial Covenants in Shipping Loans
Financial covenants are contractual undertakings by the borrower to maintain specified financial or asset-related ratios above or below agreed levels…
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Security Package & Loan Documentation
Events of Default in Ship Finance
Events of default are the contractually defined circumstances that give a lender the right to accelerate a shipping loan, enforce security or exercise…
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Financing Structures & Capital Sources
Senior Debt Financing for Ships
Senior debt is the first-ranking secured financing in the capital structure of a shipping transaction.
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Financing Structures & Capital Sources
Sale and Leaseback Transactions
In a sale and leaseback, a shipowner sells a vessel to a financier and simultaneously charters it back under a bareboat charter, often with a purchase…
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Financing Structures & Capital Sources
Sustainability-linked Loans for Shipping
A sustainability-linked loan is a general-purpose loan whose economic terms — typically the margin — vary with the borrower’s performance against agreed…
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