BIMCO is working on a term sheet to help business in the maritime industry to create ship finance documents.
According to the organisation, the document would offer borrowers and lenders a comprehensive yet simple standard which would become well-known – and could replace the many individually drafted term sheets developed by financial institutions. As a result, this standard would have the potential to facilitate the provision of ship financing, increase predictability and reduce cost.
A term sheet usually contains a number of provisions for a term loan facility, revolving credit facility, or a combination of both, and further provisions on particular issues such as currency, interest, fees, guarantee, security, prepayment, and cancellation.
Angus Frew, Secretary General of BIMCO, spoke about the decision and next steps: “This decision is an important step towards developing a standard term sheet that will simplify ship financing documentation for our members and users of BIMCO documents, saving them time and money.
“We think that both lenders and borrowers will see the benefits of having this kind of standard available.
“BIMCO will now set up a dedicated sub-committee to draft the term sheet.
“Our goal is always to provide clearly drafted and balanced documents for industry to use and so the sub-committee will include both bank and shipowner representatives and their lawyers.
“We expect the first meeting of the sub-committee to be in spring 2015.”