This Practice Note considers the principal types of security that a lender may look to take in a ship finance transaction. The main type of security is a first priority mortgage over the ship but, depending on the position in the particular transaction, the lender may also demand all or some of the following types of security:

1. •

   assignment of insurances, earnings and requisition compensation

2. •

   parent company guarantee

3. •

   charge over shares, and

4. •

   charge over a bank account

This Practice Note is relevant for all vessels that may be included in a typical ship finance transaction. For further detail in relation to superyachts in particular, see Practice Note: Superyacht finance—taking security over superyachts.