Star Bulk Carriers gets loan waivers, increases pricing

By Sara Rosenberg

New York, Feb. 12 - Star Bulk Carriers Corp. obtained waivers under its credit facilities of certain covenants and increased pricing on the loans to a spread of 200 basis points during the waiver period, according to an 8-K filed with the Securities and Exchange Commission on Thursday.

Under the company's $120 million facility, the loan-to-value ratio covenant is being waived through Jan. 31, 2010. Lenders will get a first preferred mortgage on the currently debt-free vessel Star Alpha and a pledge on an account containing $6 million as further security for this facility.

The company's $150 million facility is seeing the security cover requirement waived through Feb. 28, 2010, and the minimum asset coverage ratio for the year 2010 will be reduced to 110% from 125%. Lenders will get first preferred mortgages on the currently debt-free vessels Star Kappa and Star Ypsilon and a pledge on an account containing $9 million as further security for this facility.

Lastly, under the company's $35 million facility, the security cover requirement is being waived through Feb. 28, 2010, and the minimum asset coverage ratio for the year 2010 will be reduced to 110% from 125%. Lenders will get a pledge on an account containing $5 million as further security for this facility.

The waiver agreements require final approval by the lenders' credit committees.

As part of the waivers, the company has agreed to suspend cash dividends and share repurchases.

Star Bulk is an Athens, Greece-based shipping company.

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