PRGN takes flight

Shares of Paragon Shipping surged in midday trading Thursday after striking a series of debt deals with four of its lenders.

The New York-quoted bulker owner watched its stock soar 26.96% to $2.59 as trading volume spiked to more than ten times the typical daily average of approximately 25,000.

Equity analysts attribute the gain to a securities filing in which the Athens-based company outlined the details of amendments and waivers tied to loans with Unicredit, The Bank of Scotland, Bank of Ireland and HSBC Bank.

While chief executive Michael Bodouroglou said the agreements will improve Paragon’s overall stability during the market downturn it still needs to hammer out deals with the three other lenders that control a portion of the $203.9m worth of outstanding debt.

As we reported, the shipowner is attempting to resolve covenant breaches on borrowings with Commerzbank, HSH Nordbank and Nordea Bank Finland and will likely need to raise $10m in equity before the financial overhaul is finalised.

Some observers believe negotiations  will be easier now that more than half of its banks are on board but note it may be difficult for a dry-bulk issuer to tap the capital markets and point out that its German lenders are in the process of reduce their exposure to the maritime space.

Paragon oversees a fleet of 12 bulkers with a combined carrying capacity of roughly 779,270 in addition to a pair of handysize newbuildings that are due for delivery in 2013 and two 4,800-teu containerships that are scheduled to hit the water a year later.