keeps you connected across the coal world

Submit Your Articles
We welcome article submissions from experts in the areas of coal, mining, shipping, etc.

To Submit your article please click here.

International Energy Events

WTI Crude Oil

BRENT Crude Oil

Search News
Latest CoalNews Headlines
Wednesday, 25 November 20
Watson Farley & WilliamsThe likely replacement of the LIBOR at the end of 2021 creates difficult technical and practical issues for all sectors of business and finance. The concerns intensify as the projected deadline grows closer against a background of some continuing uncertainty and lack of consensus about the details of the approach to take. Some recent developments are worth noting and putting in context for the shipping industry and ship financiers. There are issues both for loans now being documented – and also for all LIBOR-based deals likely to continue beyond 2021.
Looking at new loans first, what are the options? (Some of the key terms and abbreviations are set out in the glossary at the end.)
Provide for the agreement to be amended at a later date
This can be done by using either the LMA Replacement Benchmark wording, old ARRC wording or bank-bespoke wording. Where there is hedging in place this should be aligned so that there should be no mismatch. Increasingly, the additional LMA wording providing for discussions to start if LIBOR is still being used by an agreed date is being added. The date now most frequently suggested for the start of negotiations is the end of Q1 although September seems to be the second favourite. The LMA (and old ARRC) wording provides for borrowers to agree the amendments. In some bilateral facilities lenders seek a unilateral right to select the replacement.
Document now using an RFR from day one or with a switch mechanism using any of LSTA, APLMA, ARRC or LMA suggested drafting
Some lenders making new sterling loans have used SONIA as a benchmark, including one which has been documented by this firm – with others in progress. The position in relation to US dollar loans and the use of SOFR appears to be more cautious. US dollars are, of course, the dominant currency in ship financing – see more on this below. It seems that immediate use of SOFR in new loans has to date been restricted to some investment grade borrowers, often in relation to standby facilities and not in an asset finance context. That said, it is of interest that it has been recently reported that the bulk operator Seastar has closed a new loan with a SOFR switch mechanism based on the LMA Rate Switch Agreement.
ARRC hardwired approach
A combined alternative to the above two options was produced by the ARRC in June 2020 whereby a switch to an agreed waterfall of SOFR alternatives could be hardwired into a facility agreement leaving the finer details to be added later by way of amendment. They have said it should be used for US dollar LIBOR-based loans from 30 September 2020. The LSTA says this has started to be used and a number of banks have mentioned using the Hardwired Approach. However, in our experience, many have so far shown a reluctance to commit to a particular rate methodology (which is essential if it is to be hardwired) and have instead opted for the LMA Replacement Benchmark wording, or variations of this.
Constructive thinking from the FMLC
A working group formed by the FMLC has written a paper which fully airs the issues. Possible solutions mooted include UK legislative changes and – most interestingly and its favoured approach – the preservation of screen rate continuity by amending the feeds on the Bloomberg and Reuters LIBOR01 pages to display a successor rate. This ingenious approach could mitigate the documentation remediation issues referred to below, including those specific to ship finance.
Uncertainty about US dollar deals?
Against this background, it is interesting that, in the last week, IBA has announced that it will consult the market on ending the publication of LIBOR rates for sterling, Swiss francs, euros and yen at the end of 2021 – but conspicuously and, perhaps significantly, did not include US dollars in that list of currencies. It says: “Discussions involving IBA, the Financial Conduct Authority (FCA), other official sector bodies and the panel banks are continuing regarding the future of USD LIBOR”. This creates yet more uncertainty for businesses which finance themselves in US dollars and for their lenders – and specifically for the shipping industry and might reinforce some slowness in moving unequivocally over to SOFR.
Existing US dollar LIBOR shipping loans
While the relevant bodies and authorities – and hence the market – continue to ponder or vacillate, there is also looming up with some urgency the issue of dealing with a switch in relation to existing LIBOR–based loans. This is a major documentation remediation exercise.
There is a further issue which is particular to ship finance, namely the likely need to register amendments or supplements to a large number of mortgages. The three largest flag states by tonnage are Panama, Liberia and the Marshall Islands. Their laws and practice in relation to mortgage registration are each, in different ways, prescriptive in relation to the description and recording of the obligations secured by the mortgage. The issue potentially arises in relation to the laws of certain other flag states, such as Greece, but the ‘big three’ registers have the most impact in practice.
It is likely that mortgagees will take a cautious approach to ensuring that they continue to be fully secured in the context of a new method of determining the reference rate of interest. This points to the need to record supplements or addenda to potentially thousands of existing mortgages. This issue is also relevant to new loans being documented. For new loans, whether there is a need to register a supplement or addendum to a mortgage upon transition to a new benchmark will depend on an analysis of the law of the relevant flag state and also the way that the transition away from LIBOR is documented. A more hardwired approach in documents now might reduce the perceived need for a supplement or addendum to the mortgage if and when transition away from LIBOR occurs.
This is an additional documentary burden and headache for the shipping industry specifically in circumstances where it faces the same challenges presented by LIBOR transition generally as all other industries. It could potentially be avoided by a change of law of the relevant flag states.
It is to be hoped that the way ahead will become clearer before too long so that, as regards both new shipping loans and existing deals, documentary issues can be addressed in a timely and orderly fashion. We will be keeping you informed, both by specific advice and through more articles, as further developments arise.
Source: Watson Farley & Williams LLP

If you believe an article violates your rights or the rights of others, please contact us.

Recent News

Friday, 15 January 21
Pakistan and Bangladesh have already cancelled tenders for LNG imports   Emerging markets such as Vietnam, Pakistan and Bangladesh tha ...

Friday, 15 January 21
9.3 gigawatts peak of solar capacity, equal to 6 coal power plants, installed in less than a year   Vietnam’s solar power indust ...

Friday, 15 January 21
China’s benchmark power coal price rose slightly during the past week.   The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...

Thursday, 14 January 21
KOREA MIDLAND POWER INVITED BIDS FOR AUSTRALIAN COAL FOR THREE YEARS SUPPLY Korea Midland Power Co. Ltd, issued an International tender for total 1,560,000 MT of Min.5,700 kcal/kg NCV coal of Australian Origin ...

Wednesday, 13 January 21
High coal and gas prices will put near-term pressure on margins for thermal power generators in China, says Fitch Ratings. However, the power short ...

   1 2 3 4 5   
Showing 6 to 10 news of total 6208
News by Category
Popular News
Total Members : 27,258
User ID
Remember Me
By logging on you accept our TERMS OF USE.
Forgot Password
Our Members Are From ...

  • Romanian Commodities Exchange
  • Energy Link Ltd, New Zealand
  • Antam Resourcindo - Indonesia
  • Timah Investasi Mineral - Indoneisa
  • Karaikal Port Pvt Ltd - India
  • Indorama - Singapore
  • Rudhra Energy - India
  • Bulk Trading Sa - Switzerland
  • Borneo Indobara - Indonesia
  • Bhatia International Limited - India
  • Bangladesh Power Developement Board
  • Lanco Infratech Ltd - India
  • Deloitte Consulting - India
  • U S Energy Resources
  • TeaM Sual Corporation - Philippines
  • PLN - Indonesia
  • Gresik Semen - Indonesia
  • Port Waratah Coal Services - Australia
  • KEPCO - South Korea
  • Maharashtra Electricity Regulatory Commission - India
  • Bahari Cakrawala Sebuku - Indonesia
  • Kobe Steel Ltd - Japan
  • Grasim Industreis Ltd - India
  • Posco Energy - South Korea
  • Intertek Mineral Services - Indonesia
  • Singapore Mercantile Exchange
  • ASAPP Information Group - India
  • Gujarat Sidhee Cement - India
  • Directorate General of MIneral and Coal - Indonesia
  • Peabody Energy - USA
  • Enel Italy
  • Asia Cement - Taiwan
  • Thiess Contractors Indonesia
  • Independent Power Producers Association of India
  • GVK Power & Infra Limited - India
  • Economic Council, Georgia
  • Dalmia Cement Bharat India
  • Britmindo - Indonesia
  • Semirara Mining Corp, Philippines
  • Carbofer General Trading SA - India
  • Anglo American - United Kingdom
  • UOB Asia (HK) Ltd
  • SUEK AG - Indonesia
  • Coastal Gujarat Power Limited - India
  • Shenhua Group - China
  • Arch Coal - USA
  • Uttam Galva Steels Limited - India
  • IOL Indonesia
  • Ceylon Electricity Board - Sri Lanka
  • CCIC - Indonesia
  • Holcim Trading Pte Ltd - Singapore
  • Surastha Cement
  • Semirara Mining and Power Corporation, Philippines
  • Glencore India Pvt. Ltd
  • Billiton Holdings Pty Ltd - Australia
  • ICICI Bank Limited - India
  • Reliance Power - India
  • Truba Alam Manunggal Engineering.Tbk - Indonesia
  • Directorate Of Revenue Intelligence - India
  • Shree Cement - India
  • Mjunction Services Limited - India
  • Georgia Ports Authority, United States
  • Indian Oil Corporation Limited
  • Aditya Birla Group - India
  • Straits Asia Resources Limited - Singapore
  • Pipit Mutiara Jaya. PT, Indonesia
  • Idemitsu - Japan
  • PLN Batubara - Indonesia
  • Vedanta Resources Plc - India
  • Parliament of New Zealand
  • bp singapore
  • San Jose City I Power Corp, Philippines
  • Pinang Coal Indonesia
  • Medco Energi Mining Internasional
  • Australian Coal Association
  • Central Electricity Authority - India
  • Bukit Asam (Persero) Tbk - Indonesia
  • SMC Global Power, Philippines
  • Chettinad Cement Corporation Ltd - India
  • VISA Power Limited - India
  • Neyveli Lignite Corporation Ltd, - India
  • MS Steel International - UAE
  • Inco-Indonesia
  • Leighton Contractors Pty Ltd - Australia
  • Coeclerici Indonesia
  • Maersk Broker
  • BRS Brokers - Singapore
  • KOWEPO - South Korea
  • Sical Logistics Limited - India
  • Tamil Nadu electricity Board
  • Rio Tinto Coal - Australia
  • ETA - Dubai
  • NALCO India
  • DBS Bank - Singapore
  • APGENCO India
  • Rashtriya Ispat Nigam Limited - India
  • TANGEDCO India
  • Cosco
  • Kohat Cement Company Ltd. - Pakistan
  • Alfred C Toepfer International GmbH - Germany
  • IMC Shipping - Singapore
  • Ministry of Mines - Canada
  • Metalloyd Limited - United Kingdom
  • Ernst & Young Pvt. Ltd.
  • SASOL - South Africa
  • Cemex - Philippines
  • Clarksons - UK
  • Thai Mozambique Logistica
  • Runge Indonesia
  • KPMG - USA
  • Sucofindo - Indonesia
  • Jorong Barutama Greston.PT - Indonesia
  • Jaiprakash Power Ventures ltd
  • Bhoruka Overseas - Indonesia
  • Credit Suisse - India
  • Siam City Cement PLC, Thailand
  • Mercuria Energy - Indonesia
  • Bukit Baiduri Energy - Indonesia
  • Eastern Energy - Thailand
  • White Energy Company Limited
  • GHCL Limited - India
  • Minerals Council of Australia
  • Offshore Bulk Terminal Pte Ltd, Singapore
  • Wood Mackenzie - Singapore
  • Petrosea - Indonesia
  • Xstrata Coal
  • Deutsche Bank - India
  • Krishnapatnam Port Company Ltd. - India
  • HSBC - Hong Kong
  • Sakthi Sugars Limited - India
  • Sindya Power Generating Company Private Ltd
  • Global Coal Blending Company Limited - Australia
  • Mintek Dendrill Indonesia
  • globalCOAL - UK
  • Meenaskhi Energy Private Limited - India
  • Asmin Koalindo Tuhup - Indonesia
  • Humpuss - Indonesia
  • Adani Power Ltd - India
  • GN Power Mariveles Coal Plant, Philippines
  • Parry Sugars Refinery, India
  • TRAFIGURA, South Korea
  • McConnell Dowell - Australia
  • PetroVietnam
  • Filglen & Citicon Mining (HK) Ltd - Hong Kong
  • AsiaOL BioFuels Corp., Philippines
  • Sinarmas Energy and Mining - Indonesia
  • KPCL - India
  • Vitol - Bahrain
  • International Coal Ventures Pvt Ltd - India
  • Kapuas Tunggal Persada - Indonesia
  • Kideco Jaya Agung - Indonesia
  • PNOC Exploration Corporation - Philippines
  • Russian Coal LLC
  • J M Baxi & Co - India
  • Infraline Energy - India
  • Australian Commodity Traders Exchange
  • Riau Bara Harum - Indonesia
  • Cebu Energy, Philippines
  • Sree Jayajothi Cements Limited - India
  • Xindia Steels Limited - India
  • Energy Development Corp, Philippines
  • Africa Commodities Group - South Africa
  • Adaro Indonesia
  • Qatrana Cement - Jordan
  • Simpson Spence & Young - Indonesia
  • Gupta Coal India Ltd
  • IHS Mccloskey Coal Group - USA
  • LBH Netherlands Bv - Netherlands
  • OPG Power Generation Pvt Ltd - India
  • Altura Mining Limited, Indonesia
  • MEC Coal - Indonesia
  • Coal and Oil Company - UAE
  • Mitra SK Pvt Ltd - India
  • Moodys - Singapore
  • The University of Queensland
  • Vale Mozambique
  • JPower - Japan
  • Dong Bac Coal Mineral Investment Coporation - Vietnam
  • Coalindo Energy - Indonesia
  • Vizag Seaport Private Limited - India
  • Chamber of Mines of South Africa
  • Jatenergy - Australia
  • Barclays Capital - USA
  • Sojitz Corporation - Japan
  • Salva Resources Pvt Ltd - India
  • Star Paper Mills Limited - India
  • Cardiff University - UK
  • Argus Media - Singapore
  • Petrochimia International Co. Ltd.- Taiwan
  • EMO - The Netherlands
  • Electricity Generating Authority of Thailand
  • Cargill India Pvt Ltd
  • TNPL - India
  • Thailand Anthracite
  • PetroVietnam Power Coal Import and Supply Company
  • Miang Besar Coal Terminal - Indonesia
  • Essar Steel Hazira Ltd - India
  • NTPC Limited - India
  • Indo Tambangraya Megah - Indonesia
  • Total Coal South Africa
  • Power Finance Corporation Ltd., India
  • Vijayanagar Sugar Pvt Ltd - India
  • Videocon Industries ltd - India
  • Cement Manufacturers Association - India
  • Goldman Sachs - Singapore
  • The India Cements Ltd
  • ANZ Bank - Australia
  • Geoservices-GeoAssay Lab
  • Coaltrans Conferences
  • GNFC Limited - India
  • SMG Consultants - Indonesia
  • Indika Energy - Indonesia
  • Ambuja Cements Ltd - India
  • Mercator Lines Limited - India
  • Bhushan Steel Limited - India
  • Maybank - Singapore
  • Thermax Limited - India
  • PTC India Limited - India
  • Bank of Tokyo Mitsubishi UFJ Ltd
  • South Luzon Thermal Energy Corporation
  • Baramulti Group, Indonesia
  • Jindal Steel & Power Ltd - India
  • Sarangani Energy Corporation, Philippines
  • Merrill Lynch Bank
  • SRK Consulting
  • SGS (Thailand) Limited
  • Therma Luzon, Inc, Philippines
  • Malco - India
  • Bukit Makmur.PT - Indonesia
  • Tanito Harum - Indonesia
  • Ministry of Finance - Indonesia
  • Samsung - South Korea
  • Formosa Plastics Group - Taiwan
  • IEA Clean Coal Centre - UK
  • Samtan Co., Ltd - South Korea
  • Asian Development Bank
  • Bank of China, Malaysia
  • Heidelberg Cement - Germany
  • Platou - Singapore
  • Gujarat Mineral Development Corp Ltd - India
  • Edison Trading Spa - Italy
  • Coal Orbis AG
  • Mitsubishi Corporation
  • India Bulls Power Limited - India
  • Makarim & Taira - Indonesia
  • Eastern Coal Council - USA
  • WorleyParsons
  • Toyota Tsusho Corporation, Japan
  • Kalimantan Lumbung Energi - Indonesia
  • Kaltim Prima Coal - Indonesia
  • TNB Fuel Sdn Bhd - Malaysia
  • Aboitiz Power Corporation - Philippines
  • Attock Cement Pakistan Limited
  • Larsen & Toubro Limited - India
  • Cigading International Bulk Terminal - Indonesia
  • Kepco SPC Power Corporation, Philippines
  • Arutmin Indonesia
  • Interocean Group of Companies - India
  • Ince & co LLP
  • Malabar Cements Ltd - India
  • New Zealand Coal & Carbon
  • Meralco Power Generation, Philippines
  • Kobexindo Tractors - Indoneisa
  • EIA - United States
  • Planning Commission, India
  • Trasteel International SA, Italy
  • Barasentosa Lestari - Indonesia
  • Global Business Power Corporation, Philippines
  • CoalTek, United States
  • Permata Bank - Indonesia
  • Core Mineral Indonesia
  • Karbindo Abesyapradhi - Indoneisa
  • Ministry of Transport, Egypt
  • Globalindo Alam Lestari - Indonesia
  • GMR Energy Limited - India
  • Japan Coal Energy Center
  • Marubeni Corporation - India
  • Tata Power - India
  • Coal India Limited
  • World Coal - UK
  • GB Group - China
  • Agrawal Coal Company - India
  • London Commodity Brokers - England
  • Bangkok Bank PCL
  • Inspectorate - India
  • ING Bank NV - Singapore
  • Indonesian Coal Mining Association
  • SN Aboitiz Power Inc, Philippines
  • Kartika Selabumi Mining - Indonesia
  • European Bulk Services B.V. - Netherlands
  • Pendopo Energi Batubara - Indonesia
  • Standard Chartered Bank - UAE
  • PowerSource Philippines DevCo
  • CESC Limited - India
  • Iligan Light & Power Inc, Philippines
  • Asia Pacific Energy Resources Ventures Inc, Philippines
  • Ind-Barath Power Infra Limited - India
  • Lafarge - France
  • McKinsey & Co - India
  • Wilmar Investment Holdings
  • Bayan Resources Tbk. - Indonesia
  • Oldendorff Carriers - Singapore
  • ACC Limited - India
  • The Treasury - Australian Government
  • UBS Singapore
  • The State Trading Corporation of India Ltd
  • Maruti Cements - India
  • Mitsui
  • Mechel - Russia
  • Thriveni
  • IBC Asia (S) Pte Ltd
  • World Bank
  • JPMorgan - India
  • Bank of America
  • Fearnleys - India
  • CNBM International Corporation - China
  • Berau Coal - Indonesia
  • Petron Corporation, Philippines
  • Indogreen Group - Indonesia
  • Maheswari Brothers Coal Limited - India
  • Global Green Power PLC Corporation, Philippines
  • CIMB Investment Bank - Malaysia
  • OCBC - Singapore
  • Gujarat Electricity Regulatory Commission - India
  • Kumho Petrochemical, South Korea
  • Tata Chemicals Ltd - India
  • Commonwealth Bank - Australia
  • Orica Australia Pty. Ltd.
  • Merrill Lynch Commodities Europe
  • Indian School of Mines
  • Platts
  • Madhucon Powers Ltd - India
  • Orica Mining Services - Indonesia
  • Panama Canal Authority
  • Bharathi Cement Corporation - India
  • GAC Shipping (India) Pvt Ltd
  • Manunggal Multi Energi - Indonesia
  • Siam City Cement - Thailand
  • Central Java Power - Indonesia
  • Price Waterhouse Coopers - Russia
  • Noble Europe Ltd - UK
  • Thomson Reuters GRC
  • BNP Paribas - Singapore
  • Savvy Resources Ltd - HongKong
  • Latin American Coal - Colombia
  • Freeport Indonesia
  • Dr Ramakrishna Prasad Power Pvt Ltd - India
  • RBS Sempra - UK
  • Renaissance Capital - South Africa
  • Indonesia Power. PT
  • Binh Thuan Hamico - Vietnam
  • Banpu Public Company Limited - Thailand