I am looking to lend as an institutional asset-based lender to an LC beneficiary (ie exporter) on a secured basis during the voyage period with the goods on the vessel to be pledged to me as collateral.
The draft LC mentions in 46a: "FULL SET 3/3 ORIGINALS CLEAN ON BOARD OCEAN BILL OF LADING
PLUS 3 NON-NEGOTIABLE COPIES MADE OUT TO ORDER OF Bank XYZ"
This means that the issuing bank (ie Bank XYZ) has title to the goods.
I fear that I would be a subordinated lender. Or worse, an unsecured lender.
Upon an event of default of the LC beneficiary, I fear that I will have no control over the goods because title to the goods is with Bank XYZ.
What would be the solution?
46a to say "FULL SET 3/3 ORIGINALS CLEAN ON BOARD OCEAN BILL OF LADING
PLUS 3 NON-NEGOTIABLE COPIES MADE OUT TO ORDER OF SHIPPER"?
If Bank XYZ declines (which I think they will), what would be an alternative solution?
Thank you,
Jogany
Bill of Lading - made out to order of Bank XYZ
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Jogany
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