Structured Financing with Insurance Guaranty

Advantages/Benefits:
- Long term amortization (20-years) on completed vessel.
- Reduced cash payment required at start-up: (_%)
- Blended rate, including construction, closing fees and term: (___%)
- No Residual Value Insurance required for FMV residual:  full payout
- EBO: at the end of eight-years, monthly EBO after that with no pre-payment penalties
- Rate reset every five-years
            * Step down payment at end of year-five
- No Bond or LC required during construction
- Credit enhances balance sheet “lower risk = lower yield”

Insurance Summary:
Lender Risk Insurance – “AA Insurer”
  • All Risk Insurance plus Principle and Interest Rider
  • Insurance Policy tailored to match Lender loan documents
  • The cost of insurance is determined during the underwriting process

Agreement between Lender and Insurer
  • Lender accrues 6-12 months interest payments
  • Insurer notified if funds are used from escrow.
    • Insurer has 5-months to rectify the problem
  • After 6-months payment deficiency the insurer will bring escrow back to 6-12 months payments
  • If there is a catastrophic loss, Insurer will pay Lender the remaining principle and interest.