Eagle Bulk unit’s amended agreement ups loan total to $485.3 million

By Mary-Katherine Stinson

Lexington, Ky., May 17 – Eagle Bulk Shipping Inc.’s wholly-owned subsidiary Eagle Bulk Ultraco LLC amended and restated its credit agreement on May 11, according to an 8-K filing with the Securities and Exchange Commission.

The amended agreement provides for additional loans of up to $175 million, comprised of an additional term loan of up to $75 million, available to be drawn for 60 business days after closing, and an additional $100 million revolving credit facility. These additional loans lift the totals of the company’s term facility to $300.3 million and its revolving facility to $185 million.

The company paid fees of approximately $3.3 million to the lenders in connection with the transaction.

The facilities mature Sept. 28, 2028.

Loans under the amended agreement bear interest at SOFR plus an applicable margin, which ranges between 205 basis points and 275 bps, based on the company’s and its consolidated subsidiaries’ consolidated net leverage ratio and certain sustainability-linked criteria.

The term facility will be repaid in quarterly installments equal to $12.45 million, beginning on June 15, 2023, with a final balloon payment due at maturity. The revolving facility will be repaid beginning on the second repayment date following closing, which is Sept. 15, 2023, and every three months following with consecutive payments of $5,445,000.

Eagle Ultraco’s obligations are secured by a first priority mortgage on 50 vessels owned by the guarantors and two vessels which are to be delivered to the company by June 15. Other vessels may be included with the lenders’ approval.

The amended agreement contains financial covenants requiring the company to maintain on a consolidated basis cash and cash equivalents or undrawn revolving commitments up to seven months prior to maturity of not less than the greater of $600,000 per vessel or 7.5% of consolidated total debt plus a debt to capitalization ratio of not greater than 0.6x and positive working capital. Additionally, the company must ensure that the total fair market value of the Eagle vessels is not less than 140% of the total outstanding principal amounts of the amended agreement.

As of May 17, the availability under the revolving facility is $185 million and the availability under the term facility is $75 million.

Credit Agricole is acting as structurer, facility agent, sustainability coordinator and security trustee.

Proceeds from the amended agreement are to be used for general corporate and working capital purposes, including vessel purchases, capital improvements, stock buybacks or equity repurchases, retirement of debt and other strategic initiatives.

The dry bulk carrier is a Marshall Islands corporation based in Stamford, Conn.

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