Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. Eagle Bulk Shipping Inc. (1322439) 10-Q published on Aug 06, 2019 at 5:08 pm
Reporting Period: Jun 29, 2019
On July 29, 2019, the Company issued $114.1 million in aggregate principal amount of 5.00% Convertible Senior Notes due 2024 (the “Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in offshore transactions outside of the United States in reliance on Regulation S under the Securities Act (the “Notes Offering”). The Company received net proceeds of approximately $112.0 million from the sale of the Notes, after deducting fees and expenses. Investment funds managed by Oaktree Capital Management L.P. (“Oaktree”) and GoldenTree Asset Management LP, the Company’s two largest shareholders, or their affiliates, acquired approximately $45.5 million and $23.6 million aggregate principal amount of the Notes, respectively.
The Notes were issued under an indenture (the “Indenture”), dated as of July 29, 2019, between the Company and Deutsche Bank Trust Company Americas, as trustee (the “Trustee”). The Notes bear interest at a rate of 5.00% per annum on the outstanding principal amount thereof, payable semi-annually in arrears on February 1 and August 1 of each year, commencing on February 1, 2020. The Notes will mature on August 1, 2024. Each holder has the right to convert any portion of the Notes at any time prior to the Maturity Date. The initial conversion rate of the Notes is 178.1737 shares of the Common Stock per $1,000 principal amount of Notes (which is equivalent to an initial conversion price of approximately $5.61 per share of Common Stock), which the Company will pay or deliver, as the case may be, either cash, shares of Common Stock or a combination of cash and shares of Common Stock, at the Company’s election.
The Notes are the general, unsecured senior obligations of the Company. They will rank: (i) senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the Notes; (ii) equal in right of payment to any of the Company’s unsecured indebtedness that is not so subordinated; (iii) effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and (iv) structurally junior to all indebtedness and other liabilities of current or future subsidiaries of the Company.
In connection with the Notes Offering, the Company agreed with Jefferies Capital Services, LLC ("JCS"), an affiliate of Jefferies LLC ("Jefferies"), an initial purchaser in the Notes Offering, to lend JCS up to 3,582,880 (of the 8,000,000 originally authorized by the Board) newly issued shares of Common Stock (the “Replacement Borrowed Shares”) pursuant to a share lending agreement, dated July 29, 2019. JCS will, in turn, lend the Replacement Borrowed Shares to Jeffries, which will lend the Replacement Borrowed Shares to certain investors in our Notes to facilitate hedging transactions with respect to the Notes they own. These investors may offer the Replacement Borrowed Shares by means of a prospectus supplement and accompany prospectus contained in a registration statement that the Company has agreed to file pursuant to the share lending agreement.
On July 29, 2019, the Company issued $114.1 million in aggregate principal amount of 5.00% Convertible Senior Notes due 2024 (the “Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in offshore transactions outside of the United States in reliance on Regulation S under the Securities Act (the “Notes Offering”), pursuant to an Indenture, dated as of July 29, 2019, between the Company and Deutsche Bank Trust Company Americas, as trustee. The Company received net proceeds of approximately $112.0 million from the sale of the Notes, after deducting fees and expenses. These net proceeds will be used to fund a portion of the aggregate purchase price for six high-specification Ultramax bulk carriers the Company agreed to purchase on July 10, 2019 and July 15, 2019 and for general corporate purposes. Please refer to Note 10. Subsequent Events to the condensed consolidated financial statements for more information.