Banks Not Worried About COFR Deadline

Everyone is talking about the effects of OPA ’90 and the COFR deadline on shipowners. But what about the banks with outstanding shipping loans? What are the consequences for them? Will December 28 come and go with no real impact, or will installments be missed and loans be called in as a result of lost revenue?

Several tanker owners have declared they are taking a tough stand against the Coast Guard by no longer trading to the United States. Others would like to continue voyages to US ports but will be prevented from doing so because they are unable to obtain the necessary Certificates of Financial Responsibility. For a great many, the usually lucrative US commercial market may be out of reach due to a lack of adequate and affordable coverage. So, what will happen? Are there sufficient markets elsewhere to accommodate these “displaced” vessels? Perhaps there will be an oversupply of ships outside of the US market which will force the freight rates way down. If these ships cannot find employment, or if revenues are reduced, it is quite possible that mortgage payments will be late or missed.

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