Alexander Severance and Martin Sandgren | Article

This Article explores the possibility of applying existing traditional international and domestic admiralty law to provide an internationally recognized first-ranking security interest in Floating Turbine Units (“FTUs”). If FTUs could be documented and registered as vessels or ships under the maritime laws of a country (flag state), as a general rule, it also should be possible to obtain a ship mortgage over the registered FTU in that flag state–“the law of the flag will invariably govern the mortgage[,] which will be a fundamental part of the lender’s security.” In almost all flag states, the ship mortgage provides the lender with a registerable security interest over the mortgaged vessel and priority over unsecured creditors. From the lender’s perspective, a ship mortgage is a security interest over a moveable asset that is enforceable worldwide, providing greater certainty for lenders and potentially lowering the offshore wind farm developer’s cost of borrowing.