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PACIFICFISHERIESREVIEWspecialsupplementtoJuLY2012Fishermenx19snews35BUSINESSANDFINANCEthetotalvesseltheownermaybeox2eredfnancingo80percentotheequipmentwithatermo12yearsre.vesselfnanc-ingabove.TeUSDrateatpresstimeora12yearloanis2.63percentannually.Itheownerisorderingaserieso4vesselsallowhichhaveasubstantialNorwegianequipmentpackage50per-centinthisexamplewemayx18letonx19toputtheequipmentpackagesorthetwofrstvesselsintothetwolastserialnum-bersthustheownertakescareothefnancingothefrsttwobyhimsel.TeNorwegiancontentinthelasttwovesselsintheseriescaninthatcasebefnancedupto80percentoveraperiodo12years.TemoreNorwegianequipmentinthevesselsthehigherthedegreeoattractivelongtermfxedratefnancinghoweveritisalwayslimitedto80percentotheullcontractvalueothevessel.SecurityExportcreditsromNorwaywillalwaysbesubjecttoullcoverbyaccept-ableguarantorsandthemostlikelymainguarantoristheNorwegianGuaranteeInstituteorExportCreditsGIEK.InashippingtransactionGIEKwillusuallycoverupto70percentotheNorwegianloanandtheremaindero30percentwillbecoveredbyacommercialbankacceptabletoECN.TecostotheguaranteeisortheaccountotheborrowerandGIEKwillinmostinstancesleanonthepricingquotedbythecommercialbank.SundryCostTemaincostelementsinatransac-tionasdescribedabovearetheinterestandguaranteepremium.InadditiontheborrowershallbearthelegalcostincurredinNorwaytheagreementwillbedratedbyanexternalNorwegiancounseltoECNandlegaleesincurredintheUSbycounselselectedbythelendertorenderadviceeventuallyintheormoalegalopinion.AnadditionalcostcomponentwillberemunerationtoanAgentBankusuallyaNorwegianbankwhotakescareoprac-ticalitiesconnectedtodisbursementandrepaymentotheloan.PracticalAspectsx13howtx12eSystemWorksAtthetimeanownerandayardorshipequipmentsupplierstartnegoti-atingapotentialcontractanapplicationoughttobesubmittedtoECNorfnanc-ingotheNorwegiandeliveriesbeoreacontractisenteredintowithaNorwegiansupplier.UponreceiptosuchapplicationECNwillexecuteafnancialoutlinewhichwillsetouttheceilingrateoCIRRinterestprovidedacommercialcontractisenteredintowiththeNorwe-gianequipmentsupplierwithin120daysromthedateosuchoutline.IntheintermediateperiodbetweenthedateotheOutlineandthesign-ingothecontractitheCIRRratehasdecreasedsuchlowerratewouldapplyandiinthesameperiodtherateincreas-estheoriginalquoteintheoutlinewillbevalid.AtthetimeosigningthecontractthefnalandmostattractiveCIRRratewillbefxed.Tefxedrateox2erisacostreeoptiontobeexercisedattheownerx19slei-surebutatthelatestsometimebeoretakingdeliveryothevessel.IatthattimetheownerhasotherandmoreattractivefnancialarrangementshemaywalkawayromtheCIRRoptionwithouthavingincurredcostsintheormocommitmenteesorthelike.Tefnancingox2eredbyECNisso-calledx18take-outx19fnancingi.e.disburse-menttakesplaceoncontractualdeliveryothevesselanddoesnotincludecon-structionfnancing.TismodeofnancinghasbeenactivelyandavorablyutilizedbyNor-wegianandoreignownersandshouldbeagoodsolutionorprojectsintheUSaswell.yEngineeredEquipmentSince1964SALESx0Marinex0Propulsion-Repowerx010x0tox0900x0h.p.x0Engineeredx0Gensetsx06.5x0kwx0tox0380x0kwx0Hydraulicx0Powerx0Unitsx0Johnx0Deerex0Cumminsx0Isuzux0x0x0Kubotax0YanmarSERVICEx0Factoryx0Trainedx0Techsx0x0x0AAAx0Certificationx0ABYCx0Certificationx0x0Newx0Installationx0Repowersx0MaintenanceServicePARTSx0Seafirex0LEDx0Lightsx0x0SuperFlexx0Exhaustx0Genuinex0Partsx0x0Largex0Inventoryx0Samex0Dayx0Shippingx0x0Bestx0Pricingwww.merequipment.cominfomerequipment.com800-777-0714MarinePropulsionPowerGeneration