Eagle Bulk banks $200m from trip to Oslo bond market

8.25% notes take out pricey debt, extend maturities and set stage for refinancing of owner's main credit facility.

Eagle Bulk Shipping has closed the book on a $200m bond issue in Oslo.

Eagle Bulk looks to issue more debt

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The new five-year secured bond priced with an 8.25% coupon (8.5% yield at maturity) -- somewhat pricier than recent deals but well down from the stiff 11.25% interest accepted by Navios Holdings in a $325m issue this week.

The benefits for Eagle including pushing all maturities out to 2022, retiring a pricey $75m second-lien debt piece with payment-in-kind interest tolling at 15%, no covenant restrictions and a negligible amortisation profile.

The issuance, which is secured by 28 of Eagle's bulkers, also refinances part of Eagle's existing $125m first-lien credit facility, which -- while currently due in 2019 -- will now be restructured and come due in 2022.

The bonds also are non-recourse to the parent company, which means there are no restrictions on Eagle's further financing activities at that level.

"This provides the company with complete capital-markets flexibility while normalising the balance sheet, pushing out maturities and taking out an expensive piece of debt," said one source familiar with the effort.

Analysts at AXIA Capital Markets say shares in Eagle, which is listed in the US, are today expected to rise on the back of the new issue.

DNB Markets, Fearnley Securities and SEB handled the bond issue, which comes at a time of increased activity in the debt capital markets.

Shipping companies have raised around $5.7bn in the high yield bond market this year, Clarksons Platou Securities said in a report this week.