Stephenson Harwood (Singapore) Alliance has advised National Australia Bank Limited (NAB) on the structuring and documentation of a US$178 million limited recourse financing of nine aframax tankers to a Korean investment fund.

The deal involved advice regarding: the bankability of complex long-term charters, involving provisions allowing time charters to be converted into bareboat charters on the occurrence of certain trigger events; the negotiation of effective security interests and step-in rights / quiet enjoyment with an oil major; and, the negotiation of residual value guarantees and charter guarantees with an oil major.

NAB was joined by a syndicate of three other international banks as lenders, including long-standing Stephenson Harwood client, BNP Paribas.

“Stephenson Harwood was instrumental in steering the commercial and documentation negotiations in this highly structured transaction. Their pragmatic approach ensured a risk allocation that satisfied the needs of the lenders, the borrower and the oil major involved in this limited recourse financing,” said Quincy Chan, Director, National Australia Bank Limited.

This financing was successfully, on a per vessel basis, closed out over the course of 10 months throughout 2020, despite significant Covid-19 related restrictions.

The Stephenson Harwood team was led by Singapore-based partner Gregg Johnston and senior associate Jeffrey Tanner, who were assisted by senior associate Matthew Seah and associate Thomas Böhringer. Singapore law advice was provided by Virtus Law partner Jason Yang and associate Angeline Yap.