SHIPLEASE term sheet ready for adoption process after expert feedback
Overview
Over a series of meetings, the drafting committee developing the new BIMCO term sheet for ship sale and leaseback transactions has considered input received from industry experts. The term sheet is now ready to be presented to the Documentary Committee for adoption.
The consultation process on SHIPLEASE, BIMCO’s standard indicative term sheet for ship sale and leaseback transactions currently being developed, has generated keen interest and a significant number of comments from stakeholders in the leasing industry.
“The detailed feedback received from industry experts is extremely useful, and I wish to express my sincere thanks to those who took the time to study the draft and share their expertise,” says Nick Fell, Executive Vice President, Corporate Services and General Counsel of BW Group and chairperson of the drafting committee.
It was expected that the project would attract a lot of interest. Not only have sale and leaseback structures been on the rise in recent years; leasing companies and other stakeholders are increasingly producing self-standing forms of lease. Having a balanced BIMCO standard which can form the basis for the parties’ negotiations therefore seems an obvious project for BIMCO.
Incorporating valuable expert feedback
The feedback received generally supports the approach taken by the drafting committee, including the format and overall structure of the term sheet. Stakeholders also endorse the decision to develop SHIPLEASE on a similar basis to SHIPTERM and SHIPTERM S, the two existing term sheets for bilateral and syndicated ship financing, except when there is a lease-specific reason to depart from these standards.
The drafting committee considered every comment received from the expert stakeholders and made a number of adjustments to the term sheet prompted by the input received. The term sheet has been principally developed for sale and leaseback transactions involving second-hand ships, which represent the majority of leasing deals currently being negotiated, but it can be readily adapted to fit structures involving new-buildings.
“The drafting committee has expert participation from ship-owning companies, leading leasing companies and law firms. Wider industry input ensures that the term sheet reflects contemporary market practice. I am confident that the new term sheet will be most useful for stakeholders involved in leasing transactions,” Fell adds.
A number of the issues raised by the expert stakeholders were considered too deal-specific for inclusion in a standard term sheet. These issues will be addressed in the explanatory notes accompanying the new form to raise parties’ awareness that they may want to deal with them either at the term sheet or documentation stage.
The drafting committee also consists of Alexandros Laios of Navios Corporation, Catherine Smith of Wah Kwong, Conor Warde of Mayer Brown, Jia Zhang of China Development Bank Leasing, Jay Shi of China Merchants Bank Financial Leasing, Lawrence Chao of Island Navigation, Matt Hannaford of Hannaford Turner LLP, Olga Petrovic of Linklaters LLP, Shen Zhao from CSIC Leasing, and Wilson Wei Liu of Minsheng Financial Leasing.
The term sheet will be put forward for adoption by the Documentary Committee on 21-22 September 2020 and published thereafter along with explanatory notes.
Feedback or a question about this information?
Posted:
06 August 2020
VPS Bunker Alerts
Veritas Petroleum Services (VPS) publish regular Bunker Alerts based entirely on fuel samples and have kindly permitted BIMCO’s Members to access this information.
The Bunker Alerts are not intended to be an evaluation of overall bunker quality in the port or area concerned, but usually highlight a specific parameter within the fuel which has raised a quality issue.
Latest ice reports for members
Latest piracy reports
Latest industry releasable threats
Related publication
Ship Management Contracts
The handy guide contains explanatory notes to all of BIMCO’s current standard ship management contracts.
Related training
Summer Shipping School
- Copenhagen, Denmark
- 16 June, 2025
The Summer Shipping School is designed to provide a thorough overview of skills used in chartering and operations through case studies and first-class teaching....
ELSEWHERE ON BIMCO
Contracts & Clauses
All of BIMCO's most widely used contracts and clauses as well as advice on managing charters and business partners.
Learn about your cargo
For general guidance and information on cargo-related queries.
BIMCO Publications
Want to buy or download a BIMCO publication? Use the link to get access to the ballast water management guide, the ship master’s security manual and many other publications.
About a new business partner
We can help members check new business partners. We also help to recover millions of USD (undisputed) funds every year.
