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ARTICLE · 12 JUNE 2020

Re-negotiating Existing Financing Packages Due To COVID-19

The COVID-19 pandemic has created a global crisis with far-reaching consequences, particularly for the shipping industry, an industry which was already facing challenges before...

MaltaFinance and Banking

The COVID-19 pandemic has created a global crisis with far-reaching consequences, particularly for the shipping industry, an industry which was already facing challenges before the virus took hold around the world. This challenging global scenario is inducing some ship owners to consider re-negotiating their financing package in order to obtain more favourable terms which would help them survive the challenges the shipping sector will inevitably face in the next few months.

One of the factors which is considered during the re-negotiation of an existing financing package is whether any amendments to the underlying finance documents would necessitate amendments to the security package securing such financing. Maltese law on ship mortgages is very clear on this. While a mortgage over a Maltese registered ship may be amended for any reason, an amendment to a Maltese mortgage will be required only in two particular instances:

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