International Seaways was able to become the first New York-listed owner to secure a so-called “green financing” of $340m without suffering any adverse impact of its decision to fit exhaust-gas scrubbers on 10 of its VLCCs.

That was the word from chief financial officer Jeffrey Pribor on the sidelines of Noble Capital Markets’ annual investor conference Monday in Hollywood, Florida.

Pribor said the planned scrubber use by 40% of Seaways’ tanker fleet on a fuel-consumption basis was no impediment to receiving a positive sustainability rating by Sustainalytics, the Dutch firm whose endorsement was a key element in winning the bank package.

“I don’t think we were viewed more positively based on scrubbers, but at the same time I don’t think [Sustainalytics] viewed it as a negative,” Pribor said.

“I think it was seen as another part of being in compliance with [carbon emissions] regulations.”

Seaways on 28 January announced an overall $390m package of debt financing that served to refinance an existing $385m mix of higher-cost debt, saving about $15m a year in interest costs.

The biggest part of the debt is a $300m “core” secured loan that carries interest at the London interbank offered rate (Libor) plus 260 basis points.

While already an attractive margin, interest has the potential to reduce a bit further if the lenders determine Seaways has met certain benchmarks in reducing carbon dioxide emissions year-over-year in the spirit of the Poseidon Principles.

Open loop scrubbers have come under attack from some environmentalists for purportedly taking pollution from the air and depositing it in the sea through wash water.

However, defenders have said there is a lack of scientific evidence to support the claims. And other forms of fuel viewed as “compliant” after the 1 January IMO 2020 sulphur cap deadline – including very low sulphur fuel oil (VLSFO) and LNG — have recently been attacked by advocacy groups.

The Poseidon Principles for the first time link availability of bank mortgage debt to shipowners’ progress in reducing CO2 emissions. They have been signed by 17 of the world’s leading ship lenders.

Seaways’ lenders Nordea Bank, ABN AMRO, Credit Agricole, DNB Bank and SEB. Nordea acted as adminstrative agent while ABN AMRO was the “sustainabiity coordinator” – a relatively new term as ship lendings go.

Some terms of the lending need to remain confidential until Seaways reports its annual earnings, Pribor said. However, pressed on the potential sustainabiity savings, he placed the margin at below 10 basis points.

Seaways has another way to reduce the margin, however. But cutting its leverage below a particular benchmark, it can see the rate go to 240 bps.

The owner of crude and product tankers had anticipated that would happen as soon as the third quarter, Pribor said, but has put back the horizon a quarter or some becomes of the effect of China’s coronavirus on hire rates.

The initiative to work through a green financing was a collaborative decision between the company and its banks, Pribor said.

Seaways is about halfway through its scrubber programme, the finance officer said.

It voluntarily deferred some planned installations from the fourth quarter of 2019 into 2020 because of the strong tanker market during those months.

Prior to China’s virus outbreak, Seaways was about on target with the revised schedule, he said. Now it is experiencing delays – as have been widespread with other owners – as China’s shipyards remain sidelined by contagion concerns.