Eagle Bulk Shipping Inc. Completes $265 million Refinancing
December 11 2017 - 5:07PM
Eagle Bulk Shipping Inc. (NASDAQ:EGLE) (collectively with its
subsidiaries, the “Company” or “Eagle Bulk”) announced today that
the Company, through its wholly-owned subsidiaries, Eagle Bulk
Shipco LLC (“Eagle Shipco”) and Eagle Shipping LLC (“Eagle
Shipping”) has entered into a series of refinancing transactions,
including the repayment in full of Eagle Shipping’s outstanding
first and second lien credit facilities, each dated as of March 30,
2016 (the “Prior Credit Facilities”). As a result of these
transactions, the Company has extended the maturities of the
outstanding debt of its subsidiaries through 2022 and achieved
additional financial flexibility with respect to its free cash
flow.
Specific benefits associated with the refinancing transactions
include the following:
- Extension of tenor on all outstanding debt through 2022
- Payoff of the PIK note bearing a cost of approximately 15%
- Reduction of annual interest expense by approximately $2.6
million
- Elimination of exposure to rising interest rates on
approximately 60% of Company’s debt
- Facilitates the potential payment of dividends and alternate
uses of cash flow, including fleet expansion
Gary Vogel, Eagle Bulk's CEO, commented, "The successful
refinancing of our balance sheet on favorable terms is a strong
endorsement by our lenders and the capital markets of the Company’s
business model and validates the actions that we have taken over
the last two years to reposition Eagle Bulk as the leading active
owner-operator of Supramax/Ultramax vessels. Through this
process, we have also created the financial flexibility to pursue
accretive opportunities and explore other ways to return value to
our shareholders."
Frank De Costanzo, Eagle Bulk’s CFO, said, “These refinancing
transactions include immediate benefits, including a reduction in
our cost of capital, the removal of an expensive note bearing an
interest rate of approximately 15%, and the elimination of any
near-term refinancing risk while simultaneously reducing our
exposure to rising interest rates. We are pleased to have
completed this refinancing and are grateful to our lenders for
their ongoing support.”
Each of the financial transactions, which are described further
below, closed on December 8, 2017.
The net proceeds of $195 million from a previously announced
offering by Eagle Shipco of senior secured bonds with a coupon of
8.25% due November 28, 2022 (the “Bonds”) were distributed to the
Company upon the satisfaction of certain conditions precedent.
Eagle Shipping entered into a $65 million credit agreement (the
“Credit Agreement”) consisting of (i) a term loan facility in an
aggregate principal amount of up to $60 million and (ii) a
revolving credit facility in an aggregate principal amount of up to
$5 million. Outstanding borrowings under the Credit Agreement
bear an interest of LIBOR plus 3.50% per annum. The Credit
Agreement matures on the earlier of (i) five years from the initial
borrowing date under the Credit Agreement and (ii) December 8,
2022.
The net proceeds from the Bonds, the Credit Agreement (including
the drawdown by Eagle Shipping of the $5 million revolving credit
facility), and cash on hand were used to repay in full the amounts
outstanding (including accrued interest) under the Prior Credit
Facilities.
Eagle Shipco entered into a revolving credit facility in an
aggregate amount of up to $15 million (the “Super Senior
Facility”). The Super Senior Facility matures on the earlier
of (i) December 8, 2022 and (ii) three months prior to the final
maturity of the Bonds. Outstanding borrowings under the Super
Senior Facility will bear an interest of LIBOR plus 2.00% per
annum. The Super Senior Facility is currently undrawn.
Members of the Company’s senior management team will host a
teleconference and webcast at 9:00 a.m. ET on Tuesday, December 12,
to discuss the transactions described above.
To participate in the teleconference, investors and analysts are
invited to call +1 844-282-4411 in the U.S., or +1 512-900-2336
outside of the U.S., and reference participant code 4864719. A
simultaneous webcast of the call, including a slide presentation
for interested investors and others, may be accessed by visiting
http://www.eagleships.com.
A replay will be available following the call from 12:00 PM ET
on December 12, 2017 until 12:00 PM ET on December 21, 2017. To
access the replay, call +1 855-859-2056 in the U.S., or +1
404-537-3406 outside of the U.S., and reference passcode
4864719.
About Eagle Bulk ShippingEagle Bulk Shipping
Inc. is a Marshall Islands corporation headquartered in Stamford,
Connecticut. Eagle Bulk owns one of the largest fleets of
Supramax/Ultramax dry bulk vessels in the world. Supramax/Ultramax
vessels, which are constructed with on-board cranes, range in size
from approximately 50,000 to 65,000 dwt. The Company transports a
broad range of major and minor bulk cargoes, including but not
limited to coal, grain, ore, pet coke, cement and fertilizer, along
worldwide shipping routes.
Forward-Looking StatementsMatters discussed in
this release may constitute forward-looking statements.
Forward-looking statements reflect management's current
expectations and observations with respect to future events and
financial performance. Where the Company expresses an expectation
or belief as to future events or results, such expectation or
belief is expressed in good faith and believed to have a reasonable
basis. However, the Company's forward-looking statements are
subject to risks, uncertainties, and other factors, which could
cause actual results to differ materially from future results
expressed, projected, or implied by those forward-looking
statements. The Company's actual results may differ
materially from those anticipated in these forward-looking
statements as a result of certain factors, including changes in the
Company’s financial resources and operational capabilities and as a
result of certain other factors listed from time to time in the
Company's filings with the U.S. Securities and Exchange
Commission. The Company disclaims any intent or obligation to
update publicly any forward-looking statements, whether as a result
of new information, future events or otherwise, except as may be
required under applicable securities laws.
Company ContactFrank De CostanzoChief Financial
OfficerEagle Bulk Shipping Inc.Tel. +1 203-276-8100Email:
investor@eagleships.com
Media ContactJonathan Morgan or Alex
HinsonPerry Street
Communications212-741-0014eagle@perryst.com
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