Is a ratio that shows the extent to which the balance of the outstanding loan is covered (secured) by the market value of the ship. It is normally found as a covenant in loan terms sheets and loan agreements. Traditionally, it used to be expressed as the ratio of the market value of the ship divided by the outstanding loan balance, in other words, the “value to loan”. It has, however, become more common to show the maximum outstanding loan balance allowed under this covenant as a percentage of the market value of the ship. For example, a covenant of maximum loan being 50% of the market value of the ship, means that if the market value of the ship is USD20 million, then the maximum loan allowed is USD10 million. The reason banks traditionally used to express LTV the other way around is probably that the ratio of ship value to the outstanding loan easily illustrates how much the ship can fall in value before the loan is not covered.