BIMCO has announced its intention to develop a standard term sheet to assist the shipping industry in the creation of ship financing documentation.
The aim of developing this document would be to offer lenders and borrowers a comprehensive and simple standard that would become well known and could replace the many individually drafted term sheets developed by banks and other 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, said the decision was an important step towards developing a standard term sheet that would simplify ship financing documentation for BIMCO 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," he said.
BIMCO will now set up a dedicated sub-committee to draft the term sheet. The first meeting of the sub-committee is scheduled for early-to-mid 2015.
