Notice Of Valuation Of Mortgages Or Loans In Ships Made As Security For The Issuance Of Covered Bonds

Original Language Title: Bekendtgørelse om værdiansættelse af pant og lån i skibe som stilles til sikkerhed for udstedelse af særligt dækkede obligationer

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Notice of valuation of mortgages or loans in ships made as security for the issuance of covered obligationer1)

Pursuant to § 152 h, nr. 1-3, and § 373, paragraph 4, of the financial business Act, see. lovbekendtgørelse nr. 1125 by 23. September 2010, as amended by Act No. 1556 of 21. December 2010, as well as section 5, paragraph 4, nr. 2-5, and section 14, paragraph 2, of the law on a ship's financial regulation. lovbekendtgørelse nr. 1376 of 10. December 2007, as amended by Act No. 579 of 1. June 2010, fixed: General provisions on valuation

§ 1. This Ordinance shall apply to the valuation of mortgage and loans in ships, see. section 152 c, paragraph 1, no. 2, of the law on financial business, which is being provided as security for the issuance of covered bonds.

(2). To ships, see. paragraph 1 may be made security for issuing covered bonds, they must be approved by the Danish maritime authority or be classified by a recognized classification society which is a member of the International Association of Classification Societies and recognised by the European Commission, without prejudice to article. Commission decision of 14. June 2007 repealing Decision 96/587/EC on the publication of a list of approved organisations which Member States have notified in accordance with Council Directive 94/57/EC. If a ship loses its classification or the approval of the Danish maritime authority, it cannot be made as security for the issuance of covered bonds.

§ 2. The Department shall by measurement of loans employ a fair cash value for the ship without regard to ship priority conditions.

(2). Valuation of mortgage security is done on the basis of the Court's scope, see mortgage. However, section 4, paragraphs 5 and 6.

§ 3. For loans secured by mortgages on ships can the Department provide loans within 60 per cent of the value, as the ship to use for collateral is provided for. The maturity of the loans may not exceed 15 years on the loan disbursement date. For bridging loans can run time shall not exceed four years from the date of first disbursement. The determination of the maturity of loans must be made taking into account the ship type's average life span and the concrete ship's age and condition, etc.

(2). The size and maturity of the loan is determined by the way in accordance with the requirements of the safety concerns, as deemed necessary in accordance with the conditions, including an assessment of the pantets estimated impairment.

§ 4. Valuation for the use of collateral must be within the amount as a savvy acquirer with knowledge of the specific price and market conditions for the particular type of ship have estimated would pay for the ship within a relevant sales period up to a maximum of 12 months (market value). Conditions that are conditional on a particularly high price, shall not be included in the valuation. The Department must know the valuation to be used for the security should take account of the possible risk of changes in market and structural conditions.

(2). The ship's value to use for collateral should be established at the earliest on the date on which the Department shall deliver the loan deals, and at the latest when the Department pays out loan.

(3). After a concrete assessment, valuation of a ship used as the valuation basis for the assessment of a sister ship.

(4). The value of employment contracts may not be included in the market value.

(5). In the case of ships registered in the Danish register of ships or in the Danish International ship register can only be included accessories, which are covered by section 47, paragraph 1, in søloven and section 54 (1) of the Ordinance on the Danish International ship register.

(6). For ships registered in another internationally recognized register can only be included similar accessories, see. (5) where a registered right over the ship in a similar way include the accessory.

§ 5. Valuation can only be done by a professional expert assessment, which is independent of the borrower, have a thorough knowledge of the relevant market and have relevant experience with assessment of the particular type of ship.

(2). Valuation of a ship shall be carried out by an employee of the Department, it must meet the requirements set out in paragraph 1 and shall be free of credit authorisation process.

(3). If an internal valuation is connected with great uncertainty due to a lack of comparable deals within a period of one year, an institution must obtain a valuation from an external expert assessment, which meets the requirements laid down in paragraph 1.

(4). By external expert assessment is defined as a person who is independent of the lender and meets the requirements of paragraph 1.

Bridging loans for new and refit

§ 6. Bridging loans for new-and ship conversion may be granted on the basis of the completed ship's expected market value, where the lodging of guarantees that the loan will be repaid, if the loan is not following the expiry of the deadline for completion of construction could be done with the loans. The guarantee shall be made by a credit institution in a country within the European Union or a country with which the Union has entered into an agreement on the financial area.

§ 7. Collateral for bridging loans to new and conversion of ships, the Institute shall require the loan repaid, if construction is not commenced within six months after payment of the loan, or if it is not, within four years from the date of loan disbursement is demonstrated that the construction work is completed in a lawful manner.

§ 8. Bridging loans can be paid only if the 1) the Department is in possession of architectural drawings and information on the ship's construction technical design, equipment, materials, etc., as well as information about the expected duration of the construction period, 2) the Department is in possession of information about the expected acquisition, and 3) there are reservations about and provided with adequate assurance that the loan will be discharged or reduced, if not after the expiry of the deadline for the final settlement could be made with the allocated amount.

§ 9. When the Department has found that the construction of a ship, which provided bridging loans, is completed, the value of the ship, without taking into account the valuation prior to loan disbursement.

Continuous monitoring

§ 10. The Department shall, at least twice yearly valuation each ship to ensure that the mortgage lending limit is respected. The Institute should appraise each ship more frequently if specific circumstances likely to assert itself.

(2). The valuation shall be made at market value, see. section 4, paragraph 1 1. PT.

(3). The Department may even overstate the ship or leave the valuation for an external evaluation expert. The assessment expert must in both cases meet the requirements set out in § 5 (1).

(4). If changes to a rated ship market value means that a mortgage secured loan herein no longer adhere to the loan limit, see. section 3, an institution must provide additional security, see. section 152 (a) (2) of the financial business Act and § 2 i, paragraph 1, of the law on a ship's financial.

(5). The Institute should appraise liabilities in connection with the issued covered bonds to liabilities fair value, as this is laid down in the accounting rules for financial companies, see. However, paragraph 6.

(6). By valuation in accordance with paragraph 5, except for a decrease in liabilities fair value, which is caused by an increased credit risk since the issuance of the paragraph 5 covered bonds. Changes caused by changes in the credit risk assumed to correspond to the change in liabilities fair value that is not attributable to changes in the risk-free market interest rate, unless the company in this case can demonstrate another method that measures the impact on liabilities fair value of changes in credit risk more credible.

(7). The Institute should appraise the asset out in annex II. section 152 c, paragraph 1, no. 2, in the financial business act in connection with the issuance of covered bonds to their fair value, as laid down in the accounting rules for the Foundation.

§ 11. The Department must have the comforting procedures for continuous monitoring of the ship's physical condition, including procedures for physical inspection.

Documentation and insurance

§ 12. It must appear on the loan matter, under what conditions valuation and loan measure is carried out.

(2). For the payment of bridging loans must provide evidence that the conditions for the payment of the loan are fulfilled, be kept in loan case.

§ 13. If the ship has acted less than six months before the time of the offer, the loan must be information about the trading price and terms in the loan case.

§ 14. Ships made as security for the issuance of covered bonds, must be insured liability and injury. Ships should also be adequately insured, including possibly war insured, etc.

(2). The Department shall establish procedures for the monitoring of (1).

Criminal provisions

§ 15. With fine punished anyone who violates article 1, paragraph 2, 1. section, § 2, § 4, paragraph 1-2 and 4-6, §§ 5-9, section 10, paragraph 1 1. paragraph, paragraphs 2-3 and paragraphs 5 to 7, §§ 11-13, article 14, paragraph 1 1. paragraph and paragraph 2.

(2). That can be imposed on companies, etc. (legal persons) criminal liability in accordance with the provisions of the criminal code 5. Chapter.

Date of entry into force of

§ 16. The notice shall enter into force on the 1. April 2011.

(2). At the same time repealed Executive Order No. 673 of 19. June 2007 on the valuation of mortgage and loans in ships made as security for the issuance of covered bonds.

Transitional provisions

§ 17. An assessment by the Executive order on the entry into force of expert who is employed as a valuation expert at an institution, regardless of section 5, paragraph 1, continue as assessment expert in the Department or in another institution, within the scope of the notice.

The Danish financial supervisory authority, the 1. March 2011 Ulrik Nødgaard/Jørn Andersen Official notes 1) Ordinance contains provisions implementing parts of a European Parliament and Council Directive No. 2006/48/EC of 14. June 2006 relating to the taking up and pursuit of the business of credit institutions (recast), Official Journal of the European Union 2006 nr. L 177, p. 1.