bottomry bond

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Older type of bond or promissory note secured by a ship as collateral, issued by the ship's captain who urgently needed money but could not contact the shipowners (or when they lacked creditworthiness). It was called 'bottomry' because originally only the ship's keel (and hence the ship structure) was intended to be pledged, but not the cargo being carried. The pledged ship could not be sold before its bottomry bonds were paid off, but all such claims were automatically canceled if the ship was lost. See also maritime lien.

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