Title XI Financing for Vessel and Shipyard Improvement Projects
Anyone planning to build a vessel in a U.S. shipyard, and any U.S. shipyard planning a shipyard improvement project, should consider using the Title XI program to finance the project. In a nutshell, the Title XI program is a loan guarantee program under which the U.S. Government guarantees bonds issued or a bank loan extended to finance the construction of a vessel in a U.S. shipyard or a U.S. shipyard improvement project. At first glance, the Title XI program looks very attractive. It enables the borrower to borrow more money at a significantly lower interest rate over a much longer period of time. There are, however, significant costs associated with using the Title XI program. So how does one determine whether it makes sense to use Title XI financing for a particular project?
Addressing Security Requirements in Purchase and Sale Agreements
By Brett M. On July 1, 2004, the new port facility and vessel security requirements contained in the International Ship and Port Facility Security Code ("ISPS Code") became effective.1 The ISPS Code is implemented through Chapter XI-2 of the International Convention for the Safety of Life at Sea ("SOLAS"). Compliance with the ISPS Code is mandatory for the 148 countries that are "Contracting Parties" to SOLAS.The ISPS Code imposes security requirements on port facilities and the owners and operators of vessels subject to Chapter XI of SOLAS. In very general terms, these security requirements involve development, filing and approval of a port facility security plan ("PSP") or ship security plan ("SSP") that satisfies the requirements of the ISPS Code…
