Extended Operational and Trade Vocabulary

Ship Finance, Leasing and Maritime Capital Markets glossary

The ship-finance vocabulary: acquisition finance and adjustable-rate loans over SOFR, the advance ratio against vessel value, the lending banks and investment houses, and the leasing, sale-and-leaseback, and bond terms. Grounds each term in the debt or equity instrument and the lender or capital market it belongs to.

385 defined terms.

Showing 250 on this page (page 1 of 2).

A

ABG Sundal Collier: Norwegian investment bank with a shipping and offshore project finance franchise serving owners across the Oslo capital markets.
ABN AMRO: Dutch bank historically active in shipping lending, which scaled back its global shipping portfolio in the 2020s.
Acquisition Finance: Debt or equity raised specifically to fund the purchase of a vessel or fleet from a seller.
Adjustable Rate Loan: Shipping loan whose interest rate floats over a reference benchmark such as SOFR plus a margin.
Advance ratio: Synonym for J used in open-water diagrams and Wageningen B-series polynomials.
Agency fee: Charge by a carrier or NVOCC for documentation and local representation.
Aircraft and Ship Finance Comparison: Practice of contrasting JOL/JOLCO ship leases with their longer established aircraft equivalents.
All Risks Marine Insurance: Hull and machinery cover required by mortgagee banks as a condition of drawdown.
Alpha Bank Shipping: Greek bank with a dedicated shipping unit lending to Greek owners and international clients.
American Shipping Company: Oslo listed Jones Act tonnage provider that has used both bond and equity capital markets.
Amortization Profile: Schedule of principal repayments on a ship loan, often longer than the loan tenor with a balloon at maturity.
Arrangement Fee: Upfront fee paid to mandated lead arrangers of a syndicated ship loan.
Arrears Interest: Default interest applied when a scheduled installment under a ship loan is unpaid.
Asset Backed Finance: Lending or leasing in which the vessel itself is the primary credit support.
Asset Cover Covenant: Loan covenant requiring vessel market value to exceed outstanding debt by a defined ratio.
Asset Heavy Owner: Shipowner whose strategy emphasizes vessel ownership over chartered in tonnage.
Asset Light Operator: Shipping company that controls tonnage primarily through time charters and leases rather than ownership.
Asset Play: Buying a ship for resale gain rather than for trading income.
Astrup Fearnley: Norwegian shipbroking and investment banking group with a long established project finance desk.
Athens Stock Exchange: Greek exchange known as ATHEX, home to listings of several Greek shipping companies.
AVIC International Leasing: Chinese leasing arm linked to the AVIC group with a maritime portfolio.

B

Back Leverage: Debt raised by a lessor against the lease receivables of a vessel sale and leaseback.
Bahamas Ship Registry: Open registry administered by the Bahamas Maritime Authority recognized by major mortgage lenders.
Balance Sheet Lender: Bank that holds shipping loans on its own books rather than distributing them.
Balloon Payment: Lump sum principal due at maturity of a ship loan after smaller scheduled installments.
Bank of China: Chinese state owned bank active in ship lending and leasing through several subsidiaries.
Bank of China Hong Kong: Hong Kong unit of Bank of China with a shipping finance franchise.
Bareboat Charter Hire: Periodic payment from charterer to owner under a bareboat structure, often used as lease rental in SLB transactions.
Bareboat charter registration: Temporary registration in a second register while the underlying ownership remains on the primary register, also called BBC-in or BBC-out.
Bareboat Sale and Leaseback: SLB structure where the lessor takes title and bareboats the vessel back to the operator.
Basel III: International capital framework that raised capital charges on long dated shipping loans for banks.
Basis Risk: Residual exposure that arises when a hedged physical voyage differs in route, timing, or vessel from the FFA contract used to hedge it.
BBCHP: Bareboat charter with hire purchase, a leasing structure widely used by Chinese lessors.
Berenberg: German private bank that has acted as bookrunner on selected shipping equity and bond issues.
BNP Paribas: French bank with a global shipping finance platform serving major international owners.
BoComm Financial Leasing: Leasing subsidiary of Bank of Communications with a maritime portfolio.
Bond Indenture: Contract governing the rights of bondholders in a shipping bond issuance.
Bond Tap: Additional issuance under an existing bond indenture, common in the Nordic high yield market.
Bond Trustee: Entity such as Nordic Trustee that represents bondholders in Norwegian shipping bonds.
Book Equity: Accounting equity of a shipping company, often divergent from market net asset value.
Bookrunner: Investment bank that builds the order book on a shipping bond or equity offering.
Borrowing Base Facility: Revolving facility sized to a formula based on eligible vessels and receivables.
BPI France: French public investment bank that channels export credit through partner agencies.
Bridge Facility: Short term loan provided to a shipowner pending takeout by long term debt or capital markets.
Broker Channel Distribution: Distribution of shipping bonds through Norwegian retail and institutional broker networks.
Bunkering Credit Line: Working capital facility used by owners and operators to fund fuel purchases.
Burgan Bank: Kuwaiti bank that has selectively participated in regional shipping transactions.

C

Cape Town Convention: International treaty applicable to mobile equipment, not extended to ships, which remain under flag state mortgage regimes.
Capesize Loan Tranche: Portion of a fleet financing dedicated to capesize bulk carriers in a borrowing base.
Capital Adequacy: Regulatory equity that banks must hold against shipping loan exposures.
Capital Markets Day: Investor event at which listed shipping companies present strategy and guidance.
Capital Recycling: Practice of selling older tonnage to fund newbuilding programs.
Cash Sweep: Mandatory prepayment from excess cash flow above a defined level under a ship loan.
Cash Trap: Restriction blocking dividend distribution when leverage or cover covenants tighten.
CDB Leasing: Leasing subsidiary of China Development Bank, a major maritime lessor.
Charter Backed Financing: Loan or lease sized against the cash flows of a long term time charter.
Charter Hire Assignment: Security assignment by which the borrower pledges charter hire receivables to the lender.
China Development Bank: Chinese policy bank that has provided large scale shipping debt and leasing volumes.
China Merchants Bank Leasing: Leasing arm of China Merchants Bank with a maritime book.
Chinese Leasing Houses: Group of major mainland lessors that became leading providers of ship finance in the 2010s.
Citi Shipping: Citi business unit providing shipping debt, capital markets and advisory services.
Clarksons Platou Project Finance: Project finance arm within Clarksons offering KS and equity raises to investors.
Clarksons Securities: Investment services arm of the Clarkson group historically involved in shipping equity, debt, and derivatives broking.
Clarksons SIN: Shipping Intelligence Network database used as a reference for vessel and market data.
Classification Society Warranty: Loan covenant requiring the vessel to remain in class with an IACS member.
Clawback Provision: Contractual right of a lender to recover amounts in defined scenarios such as fraud.
Closing Memorandum: Schedule of documents exchanged at completion.
CMB Financial Leasing: China Merchants Bank leasing subsidiary, ship finance provider.
CoCo Trigger: Conversion event that turns contingent convertible bank capital into equity, indirectly relevant to bank shipping books.
COFACE: French export credit insurer whose public guarantee business transferred to Bpifrance Assurance Export.
Collateral Maintenance Clause: Provision requiring additional security if the value to loan ratio falls below a threshold.
Comerica Bank: US regional bank with selective involvement in Jones Act and inland marine finance.
Commerzbank Shipping: Shipping unit of Commerzbank that was wound down during the German bank restructuring of the 2010s.
Commitment Fee: Fee paid on the undrawn portion of a committed shipping facility.
Commodity Trade Finance Overlap: Interface between vessel financing and the trade finance arms supporting cargo owners.
Common Terms Agreement: Shared document used in multi tranche shipping project financings.
Conti Reederei: German shipowning group historically central to the KG fund market.
Convertible Bond: Hybrid security issued by listed shipping companies that can convert into common shares.
COSCO Leasing: Leasing arm associated with the COSCO Shipping group.
Cost Overrun Guarantee: Sponsor guarantee covering excess shipyard or project costs during construction.
Coupon Step Up: Provision in a shipping bond that increases the coupon under defined credit events.
Covenant Heavy Loan: Bank loan with multiple financial and operational covenants typical of distressed credit periods.
Covenant Light Loan: Loan with fewer maintenance covenants, common in capital markets style debt.
Credit Agricole CIB: French bank with a global shipping finance team.
Credit Default Swap: Derivative referenced to a corporate name, used selectively in larger listed shipping credits.
Credit Suisse Shipping: Legacy Credit Suisse shipping franchise integrated into UBS following the 2023 acquisition.
Cross Collateralization: Structure pledging multiple vessels as security for a single facility.
Cure Period: Time window during which a borrower can remedy a covenant breach before acceleration.

D

Danish Ship Finance: Specialist Danish lender focused exclusively on ship mortgage finance, funded by covered bonds.
DDM: Dividend discount model used by analysts valuing tanker and dry bulk equities.
Debt Service Coverage Ratio: Ratio of operating cash flow to scheduled debt service on a ship loan.
Debt to EBITDA: Leverage metric tracked at the corporate level by listed shipping companies.
Default Interest: Penalty rate charged on overdue amounts under a shipping loan.
Deferred Drawdown: Loan facility under which advances are taken in tranches matched to construction milestones.
Deficiency Claim: Claim against the borrower for any shortfall between vessel sale proceeds and outstanding debt.
Delivery Date Financing: Loan that funds the final yard installment at vessel delivery.
Demand Guarantee: Independent guarantee payable on first demand, used by refund guarantors in newbuilding contracts.
Deutsche Bank Shipping: Historic shipping finance unit of Deutsche Bank, scaled back during the 2010s.
Deutsche Schiffsbank: German specialist ship mortgage bank merged into Commerzbank in 2012.
Distressed Debt Fund: Alternative investor purchasing shipping loans or bonds at a discount.
DNB Bank: Norwegian bank that is one of the largest dedicated ship finance institutions globally.
DNB Markets: Investment banking arm of DNB engaged in shipping bond and equity issuance.
DryShips: Greek listed shipping company that became a frequent case study in dilutive equity issuance and restructuring.
DSF: Common abbreviation for Danish Ship Finance.
Dual Currency Loan: Facility split between USD and another currency, rare in shipping which is predominantly USD.
Dutch GAAP: National accounting framework relevant to certain ABN AMRO era ship financings.

E

Eagle Bulk Shipping: US listed dry bulk owner whose 2014 prepackaged restructuring became a sector reference case.
EBITDA Margin: Operating margin benchmark used in shipping equity valuation.
ECA Cover: Insurance or guarantee provided by an export credit agency in respect of shipyard supplied content.
ECA Direct Loan: Loan funded directly by an export credit agency rather than commercial banks.
ECGD: Historic name of UK Export Finance, the British export credit agency.
EDC: Export Development Canada, the Canadian export credit agency with selective shipping exposure.
Effective Tax Rate: Group tax rate relevant to JOL and KS investor returns.
EKN: Swedish export credit guarantee agency.
Engine Maker Financing: ECA backed financing structured around engine content from a yard supplier.
Enterprise Value: Market capitalization plus net debt, the basis for shipping multiples.
Equity Bridge: Short term loan covering an equity contribution prior to its receipt by the borrower.
Equity Cure: Right of sponsors to inject equity to remedy a financial covenant breach.
Equity Story: Narrative used by listed shipowners to attract public market investors.
Equity Tranche: Sponsor or investor capital sitting beneath senior and mezzanine debt in a ship financing.
Euler Hermes: German export credit insurer that administered Hermes cover, now part of Allianz Trade.
Eurobond: Bond issued outside the issuer's home jurisdiction, occasionally used by larger shipowners.
Event of Default: Defined event under a ship loan that allows the lender to accelerate.
Excel Maritime: Greek dry bulk owner that filed for US Chapter 11 in 2013 in a landmark shipping case.
Excess Cash Flow Sweep: Mandatory prepayment from a percentage of excess cash flow above scheduled debt service.
Exit Multiple: Assumed sale multiple used in shipping equity and fund return models.
Export Credit Agency: Government backed entity that supports financing of national exports including newbuildings.
Export Import Bank of Korea: K-EXIM, the Korean export credit agency active in shipbuilding finance.
Export Import Bank of the United States: US Ex-Im Bank, the official ECA of the United States.

F

Facility Agent: Bank responsible for administering payments and notices under a syndicated ship loan.
FFA Hedge: Forward freight agreement used to hedge charter cash flows that back a financing.
Final Maturity: Last day on which any amount under a shipping loan is due.
Finance Lease: Lease classified as a financing for accounting purposes, with the lessee taking substantially all risks and rewards.
First Loss Tranche: Position absorbing initial losses in a structured shipping financing.
First Preferred Ship Mortgage: US statutory mortgage under 46 USC granting priority to the mortgagee.
Fitch Ratings: Credit rating agency that maintains a small shipping coverage universe.
Fixed Charge Coverage: Ratio comparing earnings to fixed charges including lease rentals and interest.
Fixed Rate Tranche: Portion of a loan that bears interest at a fixed rate, often via interest rate swap.
Flag State Mortgage: Mortgage registered against the vessel at its flag state ship registry.
Floating Rate Note: Bond paying interest at a benchmark rate plus a spread, common in Nordic shipping issues.
Floor Rate: Minimum interest rate applied if the reference benchmark falls below a defined level.
Forbearance Agreement: Agreement by lenders to refrain from enforcing rights for a defined period.
Foreign Currency Mortgage: Mortgage denominated in a currency other than the flag state currency.
Foreign Maritime Lien: Lien recognized under foreign law that may rank ahead of a mortgage in certain jurisdictions.
Forward Sale: Sale of a vessel for delivery at a future date.
Free Cash Flow Sweep: Loan feature requiring prepayment from a defined percentage of free cash flow.
Front End Fee: Upfront fee paid to lenders at closing of a shipping facility.
Fronting Bank: Bank that issues guarantees or letters of credit on behalf of a syndicate.

G

Genco Shipping and Trading: US listed dry bulk owner that emerged from a 2014 Chapter 11 restructuring.
General Partner: Managing partner with unlimited liability in a KS or KG limited partnership.
German Shipping Bank: Generic label for HSH Nordbank, NordLB, Commerzbank and Deutsche Schiffsbank during the KG era.
GIEK: Norwegian export credit guarantee agency, since merged into Eksfin.
Goldman Sachs Shipping: Investment banking franchise that has led selected shipping equity and bond mandates.
Green Bond: Bond whose proceeds are earmarked for eligible green projects under defined frameworks.
Green Loan Principles: Voluntary framework governing green loan documentation, applicable to shipping.
Guarantee Fee: Fee charged by an ECA or guarantor in respect of risk cover.
Guarantor: Party providing a guarantee in support of a shipping loan obligor.

H

Hamburg Commercial Bank: Successor to HSH Nordbank following its 2018 privatization, retaining shipping lending activities.
Hanjin Shipping: South Korean container line whose 2016 bankruptcy reshaped liner finance and counterparty risk.
Hansa Treuhand: German emissions house that arranged numerous KG ship funds during the boom.
HCI Capital: German emissions house active in KG shipping funds prior to the 2008 crisis.
Heavy Lift Project Loan: Bespoke loan secured by specialized heavy lift tonnage.
Hedge Accounting: Reporting treatment in which FFA gains and losses are recognized in line with the hedged physical freight exposure under IFRS or US GAAP rules.
Hellenic Bank Shipping: Cypriot bank that has selectively financed Greek owners.
Hermes Cover: German export credit guarantee for shipyard exports, administered through Euler Hermes.
HSH Nordbank: Former German Landesbank that was once the world's largest shipping lender, restructured into Hamburg Commercial Bank.
Hull and machinery insurance: H&M, marine insurance for the vessel itself.
Hypothec: Civil law equivalent of a mortgage, used in registries including Panama and Marshall Islands variants.

I

ICBC Leasing: Industrial and Commercial Bank of China leasing subsidiary.
IFRS 16: International accounting standard requiring charterers to capitalise leases.
Incurrence Covenant: Covenant that is tested only when defined actions are taken, typical of high yield bonds.
Indenture Trustee: Trustee acting under a US style bond indenture.
ING Bank Shipping: Dutch bank shipping franchise; ING announced exit of its global shipping client coverage in 2024.
Initial Public Offering: Sale of common equity to the public by a shipping company seeking a listing.
Insurance Assignment: Assignment of marine insurance proceeds to the mortgagee bank.
Inter Creditor Agreement: Agreement among lender classes ranking claims and enforcement rights.
Interest Reserve Account: Cash account funded to cover scheduled interest under a project financing.
Intermediation Loan: Bank loan that on lends to a borrower with the benefit of an ECA guarantee.
International Shipping Bond Market: Cross border bond market in which shipping issuers participate including USD high yield and Nordic.
Investment Grade Shipping Issuer: Rare category of shipping companies rated investment grade by major agencies.

J

Japanese operating lease: JOL, leveraged lease structure used in ship finance.
Japanese operating lease with call option: JOLCO, JOL with lessee purchase option.
JBIC: Japan Bank for International Cooperation, providing buyer and supplier credits for Japanese exports.
Jefferies Shipping: Investment banking franchise active in US listed shipping equity and bond issuance.
Joint Lead Manager: Bank serving alongside others as lead manager on a shipping bond or equity issue.
JOL Equity Investor: Japanese corporate investor that takes the equity tranche in a JOL for tax deferral benefits.
JOLCO Lessor Vehicle: Special purpose vehicle that owns the vessel in a JOLCO and leases it to the operator.
Junior Loan: Subordinated tranche ranking behind senior debt in a shipping financing.

K

K-EXIM: Export Import Bank of Korea, a major lender and guarantor in shipbuilding finance.
KfW IPEX-Bank: Specialized German bank within the KfW Group focused on export and project finance including shipping.
KG Crisis: Period from 2008 to roughly 2012 during which German KG shipping funds collapsed under tonnage oversupply.
KG Fund: Kommanditgesellschaft limited partnership used in Germany to retail finance vessel investments.
KG Initiator: Emissions house that originated and placed KG funds with German retail investors.
KG Kommanditist: Limited partner whose liability is capped at the subscribed amount in a KG.
KG Komplementar: General partner in a KG structure with unlimited liability.
KG Treuhand: Trust company that holds KG limited partnership interests on behalf of retail investors.
Kommanditgesellschaft: German limited partnership form underpinning the KG ship fund market.
Kommandittselskap: Norwegian limited partnership form underpinning KS ship project financings.
Kommunalkredit: Austrian bank that has participated selectively in maritime infrastructure finance.
KS Project Broker: Norwegian broker that structures and places KS projects with high net worth investors.
KS Structure: Norwegian project financing format combining limited partnership equity and senior bank debt.
KSURE: Korea Trade Insurance Corporation, the Korean export credit insurance agency.

L

Last Cash Date: Date by which sponsor equity must be funded under a project financing.
Lazard Maritime: Lazard advisory team active in shipping restructurings and M&A mandates.
Lease Adjusted Leverage: Leverage metric that capitalizes operating lease commitments.
Lease in Lease out: Cross border tax structure historically used in transportation, since restricted.
Lender of Record: Institution shown on the loan agreement as the formal lender.
Letter of Quiet Enjoyment: Lender undertaking to a charterer that quiet enjoyment will be preserved if security is enforced.
Leverage Covenant: Covenant capping the ratio of debt to a defined denominator such as fleet value.
Liberia Maritime Mortgage: Mortgage registered under Liberian law for vessels on the Liberian flag.
Liberian Registry: LISCR administered open registry issuing STCW endorsements widely accepted in trade.
Lien Subordination Agreement: Agreement subordinating one lien to another among shipping creditors.
Limited Partnership Agreement: Constitutional document of a KS or KG structure.
Liquidity Covenant: Covenant requiring minimum cash and equivalents at the obligor.
Lloyd Fonds: German asset manager with a legacy KG shipping fund portfolio.
Loan to Value: Ratio of outstanding loan amount to vessel market value.
London Loan Market: Syndicated shipping loan market centered on London law facility agreements.

M

Make Whole Premium: Premium payable on early redemption of a shipping bond, designed to compensate the holder.
Mandated Lead Arranger: Bank holding the top role in syndicating a shipping loan.
Mandatory Prepayment: Required loan prepayment triggered by sale, insurance recovery or covenant breach.
Marfin Investment Group: Greek investment group historically active in maritime equity investments.
Marine money: Industry publication on ship finance.
Maritim Equity Partners: Hamburg based maritime private equity manager.
Maritime Mortgage: Generic term for security interest in a vessel registered under flag state law.
Maritime Strategies International: Independent research consultancy providing vessel valuations and market analysis.
Mark to Market Test: Periodic test comparing vessel market value to loan outstanding.
Marshall Islands Maritime Mortgage: Mortgage registered under the Marshall Islands Maritime Act for vessels on that flag.
Marshall Islands Registry: IRI administered open registry issuing STCW endorsements.
Mass Affluent Investor: Retail or semi professional investor targeted by KG and KS placements.
Material Adverse Change: Drawstop trigger commonly negotiated in shipping facility agreements.
Maturity Wall: Aggregate volume of shipping debt falling due within a defined window.
Mezzanine Loan: Subordinated debt ranking between senior bank loans and equity.
Minimum Liquidity Covenant: Specific liquidity test requiring cash holdings above a defined floor.
Minimum Value Clause: Provision requiring vessel valuation above a defined multiple of debt.
Minsheng Financial Leasing: Chinese leasing company owned by China Minsheng Bank with maritime exposure.
Mizuho Bank: Japanese megabank with a global ship finance platform.
Moody's Investors Service: Credit rating agency rating selected shipping issuers and structured deals.
Morgan Stanley Shipping: Investment banking franchise involved in US shipping equity and bond issuance.
Mortgage Assignment: Assignment of an existing ship mortgage to a new lender on refinancing.
MPC Munchmeyer Petersen Capital: Hamburg based fund manager with a significant KG shipping legacy.
MUFG Bank: Japanese megabank with a deep ship finance practice and JOL lender role.
Multi Currency Revolver: Revolving facility available in multiple currencies, occasionally used by larger shipping groups.

N

NASDAQ Shipping Listings: Group of US listed shipping companies on NASDAQ, predominantly Greek controlled.
Negative Pledge: Covenant preventing creation of additional security over pledged assets.
Net Asset Value: Fair market value of fleet less net debt, used to value shipping equities.
Newbuilding Refund Guarantee: Bank guarantee securing return of yard installments if the builder defaults.
Newbuilding Supervision: Owner appointed monitoring of construction, required by lenders under a newbuild loan.
NEXI: Nippon Export and Investment Insurance, the Japanese export credit insurer.
Nordcapital: Hamburg based asset manager with a historic KG shipping fund portfolio.
Nordea Bank: Nordic bank with a global shipping client coverage franchise.