Following the LIBOR scandal in 2012 , it is expected that the LIBOR will be abandoned by the end of 2021. Still, very few have entered into agreements based on other rates.

Last fall, Grieg Maritime Group agreed to be part of a pilot project with DNB. In our refinancing of Star Japan, concluded Medio November, we adopted SOFR as basis borrowing rate. We are thereby the first borrower to implement SOFR with DNB, and as far as we know, with any of the banks in Norway. We have so far not been able to establish if this is the world’s first in shipping.

“We are very happy that Grieg Maritime Group has chosen to spearhead this pilot together with us. This is a new and important financial territory, and we are very excited about launching this first SOFR-loan together with a long-term and trusted client like Grieg Maritime Group,” says Mr Anders Grevstad, Executive VP Product Sales & Category in Corporate Banking and Chairman of the Alternative Reference Rate steering committee at DNB.

With this being an unchartered territory, both DNB and Grieg Maritime Group wanted to ensure we had keen and able eyes looking over the agreement. The invaluable support by law firms Simonsen Vogt & Wiig and Wikborg Rein was key to taking this step towards a post-LIBOR financial world.

“We have a very good relationship with DNB. When they approached us with the SOFR idea, we were very interested in trying out what may be the next standard. I think DNB has appreciated our willingness to do so. To us, this further strengthens our relationship with DNB,” says Grieg Maritime Group CFO, Annicken Kildahl.

“The change from USD LIBOR to SOFR for dollar-denominated loans is a major transition and something we will be implemented on a case-by-case basis according to regulatory requirements. We will be following the development closely and with great interest going forward, and we will be offering this to more clients in due time,” says Mr Grevstad.