Bottomry bond

A bottomry bond is the historic instrument by which a shipmaster pledged the vessel itself as security for a loan raised in a foreign port to fund repairs or supplies needed to complete the voyage. Repayment, with maritime interest, fell due only if the ship arrived safely, so the lender bore the marine risk and the bond carried a high rate. A parallel form, respondentia, pledged the cargo rather than the hull. Modern telegraphic banking and owner credit made it obsolete; the ship mortgage and assignment of earnings replaced it as the security of choice.