By Abigail W. Adams
Portland, Me., July 25 – Eagle Bulk Shipping Inc. priced $100 million of five-year convertible notes prior to the market open on Thursday at par with a coupon of 5% and an initial conversion premium of 25%, according to a company news release.
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%, according to a market source.
Jefferies & Co., Clarksons Platou Securities and Fearnley Securities AS were bookrunners for the Rule 144A and Regulation S offering, which carries a greenshoe of $15 million.
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 has agreed to acquire $45.5 million of the notes and Golden Tree Asset Management LP has agreed to acquire $23.6 million, according to a company news release.
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, according to the news release.
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 will be used to fund a portion of the purchase price of six new shipping vessels in addition to general corporate purposes and working capital.
Eagle Bulk Shipping is a Stamford, Conn.-based shipowner-operator providing global transportation services for commodities.
| Issuer: | Eagle Bulk Shipping Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $100 million
|
| Greenshoe: | $15 million
|
| Maturity: | 2024
|
| Bookrunners: | Jefferies & Co., Clarksons Platou Securities and Fearnley Securities AS
|
| Coupon: | 5%
|
| Price: | Par
|
| Yield: | 5%
|
| Conversion premium: | 25%
|
| Conversion price: | $5.61
|
| Conversion rate: | 178.1737
|
| Call options: | Redeemable at 101% between Oct. 27, 2019 and July 29, 2020 if conditions of the share loan replacement agreement are not met
|
| Put options: | None
|
| Pricing date: | July 25
|
| Settlement date: | July 29
|
| Distribution: | Rule 144A and Regulation S
|
| Talk: | Coupon of 4.25% to 4.75% and initial conversion premium of 25% to 30%
|
| Stock symbol: | Nasdaq: EGLE
|
| Stock price: | $4.49 at market close July 25
|
| Market capitalization: | $328.44 million
|
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