Eid Mubarak
  • MAY 2021 INDONESIAN COAL PRICE REFERENCE FOR EXPORTS FIXED AT US$ 89.74 A TON

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
LIBOR REPLACEMENT AND SHIP FINANCE - WHERE IS IT HEADING? - WFW
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.
 
Conclusion
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

Wednesday, 14 April 21
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 1.10 PCT - XINHUA
China Taiyuan coal transaction price index stood at 138.05 points Monday, down 1.10 percent week on week.   The index, released by Chi ...


Wednesday, 14 April 21
MARKET INSIGHT - INTERMODAL
After a series of months where the dry bulk sector was attracting most of the buying interest, tankers SnP activity spiked in the previous weeks. O ...


Tuesday, 13 April 21
INDONESIAN COAL PRICE REFERENCE IN APRIL UP AGAIN ON FIRM DEMAND
COALspot.com: The Indonesia coal price reference for April 2021 settles at US$ 86.68 per ton FOB vessel.    The Indonesia coal pr ...


Monday, 12 April 21
CHINA'S ECONOMIC RECOVERY PUSHES COAL MINES TO INCREASE YIELD - GLOBAL TIMES
China’s fast economic rebound from coronavirus has driven up electricity demand, leading to higher consumption of coal which is seeing rising ...


Monday, 12 April 21
GLOBAL COAL PRODUCTION EXPECTED TO RISE BY 3.5% IN 2021, SAYS GLOBALDATA
Global coal output is estimated to have declined by 2% in 2020 due to COVID-19-related lockdowns and restrictions, with significant reductions obse ...


   3 4 5 6 7   
Showing 21 to 25 news of total 6289
News by Category
Popular News
 
Total Members : 27,417
Member
Panelist
User ID
Password
Remember Me
By logging on you accept our TERMS OF USE.
Free
Register
Forgot Password
 
Our Members Are From ...

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