MARAD updates Title XI regulations

By providing long-term debt repayment guarantees, the U.S. Maritime Administration’s Title XI Federal Ship Financing Program is intended to encourage U.S. shipowners to obtain new vessels from U. S. shipyards cost effectively and to assist U.S. shipyards in modernizing their facilities for building and repairing vessels. Which would all be great, if more applications under the Title XI regulations actually received approval in a timely manner.

Last year, in a move to encourage offshore wind development, vessels built for the offshore wind sector were designated “Vessels of National Interest” to prioritize them for Title XI guarantees. While that saw a number of new applications made, the process of actually getting them approved, whether offshore wind related or not, remains complex and time consuming, to say the least. You can see the status of currently pending applications here.

Now, in what looks to be move to ease the logjam, MARAD has issued a final rule updating its financial requirements for the program.

The agency says that the final rule establishes modern financial performance as well as initial and continuing creditworthiness criteria for Title XI loan guarantees. The rule will also provide applicants with more flexible repayments terms, aligning program regulations with the best practices of maritime industry lending and federal credit. By introducing greater flexibility to the regulations governing the Title XI program, MARAD will be able to adapt the terms of new loan guarantees according to the risks of particular projects.

• The final rule will become effective 30 days after publication in the Federal Register, and can be downloaded HERE