Eagle Bulk raises $148 million of debt, including convertibles, loan

By Devika Patel

Knoxville, Tenn., Nov. 7 – Eagle Bulk Shipping Inc. raised $148 million through debt since the beginning of the last quarter.

“Since the beginning of the third quarter, we raised $148 million in debt, which was comprised of a $114 million convertible bond and $34 million upsize to our term loan facility,” chief executive officer Gary Vogel said on the company’s third quarter ended Sept. 30 earnings conference call on Thursday.

Adjusted EBITDA was $13.2 million for the quarter.

As of Sept. 30, 2019, cash and cash equivalents, including restricted cash, were $101.1 million, compared to $78.2 million as of Dec. 31, 2018.

Total liquidity, as of Sept. 30, was $171.1 million, comprised of the $101.1 million of cash and $70 million availability under revolving credit facility.

As of Sept. 30, the company had $449.5 million of total debt.

On Aug. 2, underwriters for the company’s 5% five-year convertible notes exercised a $14.12 million portion of their $15 million greenshoe, bringing the total deal size to $114.12 million.

The company priced $100 million of the convertibles prior to the market open on July 15 at par with an initial conversion premium of 25%.

Pricing came wider than initial price talk for a coupon of 4.25% to 4.75% and at the cheap end of talk for an initial conversion premium of 25% to 30%.

Jefferies & Co., Clarksons Platou Securities and Fearnley Securities AS were bookrunners for the Rule 144A and Regulation S offering.

The notes are non-callable. There is standard takeover and dividend protection.

The notes will be settled in cash, shares or a combination of both at the company’s option.

Primary shareholders Oaktree Capital Management LP and Golden Tree Asset Management LP have agreed to acquire $45.5 million and $23.6 million of the notes respectively.

Concurrently with the convertible notes offering, up to 3,582,880 shares of the company’s common stock will be offered by selling shareholders through a lending arrangement with one of the initial purchasers of the notes.

If the company is unable to register replacement shares or fulfill conditions connected to the share loan replacement, it may be obligated to pay special interest on the notes.

If the company is obligated to pay special interest, it may redeem the notes at 101% of the principal amount between Oct. 27, 2019 and July 29, 2020.

Proceeds were earmarked to fund a portion of the purchase price of six new shipping vessels in addition to general corporate purposes and working capital.

On Oct. 7, Eagle Bulk reported that Eagle Bulk Ultraco LLC, a wholly owned subsidiary, closed on a $34 million incremental term loan.

The incremental term loan is under the borrower’s existing five-year senior secured facility and carries the same terms.

The facility bears interest at Libor plus 250 basis points.

Net loan proceeds were earmarked for general corporate purposes, including capital expenditures relating to the installation of exhaust gas cleaning systems.

The original facility includes an about $153 million term loan and a $55 million revolver.

The incremental loan was provided by existing lenders ABN Amro, Credit Agricole CIB, Skandinaviska Enskilda Banken AB, DNB Bank ASA, Danish Ship Finance and Nordea.

Based in New York, Eagle Bulk owns dry bulk vessels and transports bulk cargoes.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.