bottomry

Respondentia is a loan where a ship's cargo is the security, on similar terms to bottomry.

The Code of Hammurabi describes a form of bottomry that was a type of insurance.

A bottomry would be taken, but the repayment would be contingent on the ship successfully completing the voyage.

Additionally, subsidiaries offer securitization, securities brokerage, mutual investment and bottomry, insurance and factoring, among others.

However, as all Shakespeare scholars know, catastrophe bonds, known then as contracts of bottomry, were the standard method of insuring ships from Roman times through the Middle Ages.

The name and the principle have passed into Scotland's civil law system, which distinguishes between conventional hypothecs, as bottomry and respondentia, and tacit hypothecs established by law.

It consequently suffered chronic lack of cash and had to resort to short term loans and bottomry bonds (for which the ships themselves were the collateral) at a premium of 30 to 35 per cent.

Hypothecation is usually seen in relation to bottomry (cf. bills of lading), whereby the bill of lading is endorsed by the secured party, who, unless the security is redeemed, can claim the property by delivery of the bill.

Bottomry is when the master of a ship borrows money upon the bottom or keel of it, so as to forfeit the ship itself to the creditor, if the money is not paid at the time appointed with interest at the ship's safe return.

Due to the bottomry bond's relatively low priority as against other liens in the event of a libel against the ship, the use of bottomry bonds declined greatly in the 19th century and the subject is today of interest only to legal historians.