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18 Nov 2020

Stephenson Harwood advises major European bank on secured loan facility to Seastar

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Law firm Stephenson Harwood LLP has advised a major European bank in relation to a secured loan facility made available to the UK based drybulk owner Seastar.

The deal involved several vessels, which are registered in Gibraltar, Malta and Panama, and included discussions on what would replace USD LIBOR at the end of 2021.

"This deal was extremely topical, in that it had to address the question of the discontinuation of LIBOR, and at what stage this should be tackled," said Dora Mace-Kokota, partner, Stephenson Harwood. "Ultimately, the parties decided to take the opportunity of documenting a top-up to the facility to incorporate ‘hardwire language’, using and adapting the latest LMA rate switch agreement provisions. In addition to the LMA rate switch trigger events, the parties agreed to set a specific date next year from which the replacement rate will become effective. To our knowledge, this is the first ship finance English law set of facility documents, since LIBOR discontinuation was announced, which incorporates a rate switch mechanism referencing SOFR compounded in arrears."

The Stephenson Harwood team was led by ship finance partner Dora Mace-Kokota, who was assisted by consultant Danae Hosek-Ugolini.

The Stephenson Harwood ship finance team is internationally recognised for the strength and depth of its expertise. The award-winning team is known particularly for its commerciality and ability to solve even the most complex challenges with innovative financing structures. Clients include nearly all of the major international banks which are active in the shipping market, as well as those in the private equity space.

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