01-10-2021 Eagle Bulk reveals $400m deal to refinance loans and $176m bond maturity, By Gary Dixon, TradeWinds
US-listed shipowner Eagle Bulk Shipping has clinched $400m of new financing to tackle its Norwegian bond debt. Its ship owning bond silo subsidiary Eagle Bulk Shipco told the Oslo Stock Exchange on Friday that the parent company has sealed a five-year debt package comprised of a $300m term loan and a $100m revolving credit facility. Proceeds will repay Shipco’s 8.25% Oslo-listed bonds due in November, as well as an Eagle Bulk Holdco revolver due this year and an Eagle Bulk Ultraco credit facility due in 2024. Lenders involved in the refinancing are Credit Agricole, Danish Ship Finance, DNB Markets, Nordea, Filial I Norge and SEB.
Fearnley Securities said in September that the bond had $176m outstanding. The Norwegian investment bank also believes the bond silo is looking “stronger than ever.” Shipco owns 20 vessels in the Eagle Bulk fleet as collateral. The bond subsidiary reported stronger second quarter profit in September, largely reflecting the strength of its parent’s performance in healthy bulker markets. Revenue came in at $45m, up more than 30% quarter-on-quarter, while Ebitda surged 69% to $22m, against $13m in the first quarter. Cash on hand was $25m, implying net interest-bearing debt of $151m.
“We estimate combined value of $352m for the 20 vessels in the collateral package,” Fearnleys added. This leaves Shipco with a healthy net loan to value of 43%, which is expected to improve further as the dry bulk market is seeing the strongest rates in a decade, the investment bank added. “Although asset values are not seeing weekly leaps as in early 2021 (assets are still trading at discounts to charter market), there is some serious cash generation taking place which could leave Shipco net-debt free in less than 12 months,” analysts Peder Nicolai Jarlsby, Erik Gabriel Hovi and Ulrik Mannhart added.
Eagle Bulk itself achieved its best result in the second quarter. The Gary Vogel-led outfit became the latest dry bulk owner to report eye-popping results, with adjusted net income of $40.3m or $3.31 per share, reflecting the biggest Ebitda in the company’s history.