I emailed GrafTech to see if they could help clarify what they meant in regards to the LTAs I got fairly boilerplate answers but perhaps you'll find them useful.
Q: Does GrafTech require a small, medium or large percentage of their customers with LTAs to have parent guarantees or collateral arrangements?
A: The majority of the customers have strong balance sheets with a weighted average cost of debt of ~4.2% as of our IPO.
Q: Does GrafTech track the counter-party risk of its customers after they have signed the LTA?
A: yes
Q: What can GrafTech do to mitigate that risk if a customer is becoming insolvent and their LTA does not include a parent guarantee or collateral arrangement?
A: This is relatively rare – i.e. most customers who are financially weak have credit protections and vice versa.
Q: It was stated in yesterday’s call that these contracts are flexible as long as the overall value is maintained for shareholders, as a shareholder I’m curious what that means as it is kind of ambiguous.
A: We are willing to work with customers if possible, but the contracts are fair, well-worded, enforceable contracts. We would need to be made whole for any changes we agreed to.
Q: If a contract is cancelled due to a bankruptcy can that contract be replaced to another customer quickly (matter of months) to keep visibility or does it take a while (matter of years) to repurpose that capacity which was lost in a new LTA?
A: A contract in bankruptcy is not cancelled. It falls below the threshold for collectability and therefore is excluded from our accounting and IR disclosures; however, we could and would continue to pursue collection. It could be some time for that to resolve. In the meantime, we could sell the electrodes elsewhere.