Financial Responsibility (COFRs) from the US Coast Guard.

Shipowners operating tankers in US waters must obtain COFRs from the US Coast Guard to prove they can pay for damages resulting from oil spills. The shipowner must satisfy US Coast Guard requirements before being issued COFRs.

COFRs act as guarantees for the initial payment of liabilities for which a shipowner might become responsible under the Oil Pollution Act 1990 (OPA 90) after December 28, 1994.

Bona has created a single purpose entity which serves as guarantor to the US Coast Guard and has been approved with equity sufficient to cover the COFR amount.

"Bona has been able to provide such equity on the back of its strong balance sheet,'' the company said in a release.

Bona is a ship owning and chartering limited liability company incorporated in Bermuda in 1990. Operations for the company commenced in 1992.

The present COFR will cover 17 of the 18 vessels wholly or partly owned by Bona. The company has chosen not to arrange a COFR for its suezmax tanker Bona Liv at this time.

The company said the current solution is a "temporary'' one, "which gives Bona the best flexibility to chose a COFR solution generally acceptable to the industry at a later stage. The ultimate problem of unlimited liability for ship owners under OPA-90 is not solved and Bona will continue to support industry activities with the objective of eliminating this liability,'' according to the company release.

The US Coast Guard on Thursday approved the mutual non-profit P&I (Protection & Indemnity) -- Shoreline Mutual (Bermuda) Ltd. -- to provide guarantees for COFRs. Bermuda-based reinsurer Centre Reinsurance Holdings Ltd. is leading Shoreline's comprehensive reinsurance programme.

The US Coast Guard also recently approved First Line, an insurance facility set up by broker Johnson and Higgins and backed by Bermuda-based Stockton Re, a wholly-owned subsidiary of the Commodities Corporation Group.