Ships In underwriting

A vessel is a system, and we appraise it as one.

Tugs, offshore support vessels, patrol craft and coasters appraised per hull, monitored from AIS, class status and the reports you send, and placed with lenders who take ship mortgages. Pre-qualification accepted now, with the open fields stated below.

The lender sets the advance, rate and term after the appraisal. Your report shows an indicative range. Pre-qualification takes longer while this class is in underwriting. Foreign flagged vessels take longer to close, because the mortgage registers in the flag state.

What qualifies as collateral

Eligible, and not. Stated before you send a serial list.

Eligible

Commercial vessels, 500 GT and up

Tugs, OSVs, patrol craft, small tankers, dry bulk coasters.

In class with an IACS member

Surveys current, no outstanding conditions of class.

Twenty years old or newer

Older hulls considered case by case at a lower advance.

A flag with a mortgage register

A flag state that records a preferred mortgage the lender can enforce.

AIS and class status we can read

Position from AIS, class and survey dates from the society.

Not eligible

Off class or overdue surveys

No class, no resale market, no lender.

Flags without a mortgage register

The lender cannot perfect its security.

Yachts and pleasure craft

A different market and a different lender.

Vessels under arrest or with unresolved maritime liens

Crew wages, salvage and port dues rank ahead of the mortgage.

Licences and quota alone

The mortgage is on the hull, not the fishing licence.

How we appraise it

Orderly liquidation value, per unit, every quarter.

We appraise at orderly liquidation value per hull, from sale and purchase reports, broker valuations and auction results for the same type, age, engine hours and class record. Drydock timing moves the value: a vessel six months from special survey is worth less than one just out of dock.

The residual curve for workboats is drawn from broker reports, and we are building a direct feed. The lender floor is the value in a 90 day judicial or private sale. The advance is a share of OLV, so the gap is the lender's cushion.

Per hull readout

Illustrative

Orderly liquidation value$3,100,000
Market, broker valuation$3,600,000
Lender floor$2,400,000

Illustrative. 32 m harbour tug, twelve years, 5,000 bhp, in class. Not a quote.

What we monitor

What we monitor, and what you send each month.

A ship lender today sees a valuation at closing and a class certificate once a year. A lender on Safewaterline monitoring sees where the vessel is from AIS, whether she is in class, and when she is due in dock, every month.

AIS position and speed

Trading inside the registered area. Port calls logged.

Class status

Class in good standing, conditions of class, survey dates.

Drydock schedule

Special and intermediate survey dates against the loan term.

Insurance in force

H&M and P&I certificates current, lender as loss payee and mortgagee.

Last report

A vessel that goes dark on AIS is a vessel we ask about the same day.

What a breach does

The vessel trades outside the registered area, a condition of class is left open past its due date, insurance lapses, or AIS goes dark. You and the lender get the same notice, the same day. Then a cure period: return to area, close the condition, renew the cover. If it is not cured, the borrowing base is recomputed. Enforcement is last, and it is a mortgagee's sale run by the resale desk, not an arrest in a foreign port.

Software defined vessel

In partnership with Fincantieri, we built a resource governor for the software defined vessel.

A software defined vessel runs its power, cooling, payload and mission systems as services on shared hardware. When something fails, a governor has to decide in under a second what keeps running and what gives way, and say why.

Why it is on a lending page: it shows that we know vessels at the systems level. A ship loan is monitored from AIS, class records and the documents the owner sends, not from the ship's systems.

Resource governor

65 m patrol vessel · 2 × 450 kW

  1. T+00:00Both generators online

    900 kW available. Load 610 kW. Comms node 42 kW. Vessel at 14 knots.

  2. T+12:00Generator 2 trips

    450 kW available. Load 610 kW exceeds supply. Governor has 1 second.

  3. T+12:01Comms node shed to 8 kW

    Governor: GEN2 offline, 450 kW available, shed COMMS to floor, lowest mission priority above the floor.

Twenty second simulation, from the resource governor test bench. 65 m patrol vessel, two 450 kW generators.

The closing docket

Every document, one room, versioned.

The first six documents are the GPU set, adapted for a hull. The ship specific items will be written with maritime counsel.

Borrowing base certificate

Eligible hulls, OLV, advance, facility. Recomputed every quarter.

Compliance certificate

Covenant status from AIS and class, signed by you each month.

Insurance certificate request

Sent to your broker. Lender as loss payee and mortgagee on H&M, notice of assignment to P&I.

Serial list

For ships, the vessel schedule: name, IMO number, flag, official number, class, year, engines.

ACORD 25

Certificate of liability insurance, returned by your broker, where it applies.

Lien search

Registry search at the flag state and UCC search in your state of organisation.

Ship mortgage

Flag state form, registered against the vessel, class specific.

Certificate of registry and class certificate

Current copies, with the survey status report.

Deletion certificate

If the vessel is reflagging to a register the lender accepts.

Sample appraisal summary

Appraisal summary

Illustrative
CollateralTwo harbour tugs, 32 m, in class
Appraised OLV$6,200,000
ConditionIn class, surveys current
Lien searchFlag state registry and UCC search
MonitoringTrading area, class, insurance, revaluation every quarter

Illustrative. No ship loan has closed yet. The lender sets the advance, rate, term and fees.

Intelligence for this class

The risk profile a lender reads first.

The workboat risk profile is in preparation at Safewaterline Intelligence: sale and purchase values by type and age, a residual curve for tugs and OSVs, and mortgage activity by flag. It is published before the first ship loan closes, because the profile is what brings the lender.

In underwriting

What is still open for this class.

Eligibility rules are set. Five of the six fields a class needs before it goes live are still open. A class goes live when all six are filled: eligibility, residual curve, monitoring source, docket set, risk profile, and a lender in the network. Until then, pre-qualification runs at the longer turnaround.

Residual curve

From broker sale and purchase reports.

Monitoring source

AIS, class society portals and the reports the owner sends.

Docket set

Six GPU documents adapted for a hull, plus ship mortgage, registry and class items, being written.

Risk profile

In preparation at Intelligence.

Lender in network

Being arranged.

Questions
Why does a ship take longer?

The mortgage registers in the flag state, and some registers are slow. The appraisal itself runs as it does for every other class.

Our vessel is foreign flagged.

Most are. The lender needs a flag with a mortgage register it can enforce. If yours is not one, we talk about reflagging, which is routine and costs less than the difference in advance.

What about crew wages and port dues?

Maritime liens rank ahead of the mortgage. We check for them at the registry search, and the covenant set includes a cap on unpaid crew and port claims.

Do you need a vessel to be software defined?

No. AIS, class and insurance are enough for the covenants.

How long does pre-qualification take while you are in underwriting?

Longer than for GPUs, because the class is still in underwriting. You get the appraisal report and an indicative range. The open fields on this page say what is still being built.

Ships

Send the serial list. The appraisal report is yours either way.

Pre-qualification takes longer while this class is in underwriting. Foreign flagged vessels take longer to close, because the mortgage registers in the flag state. Nothing is owed until a loan closes.