DryShips Pricing of Convertible Senior Notes

Monday, November 23, 2009

DryShips Inc. (NASDAQ: DRYS) a global provider of marine transportation services for drybulk cargoes and off-shore contract drilling oil services, announced the pricing of its previously announced public offering of convertible senior notes. The offering size was increased from $300m to $400m. The sale of the convertible notes is expected to close on November 25, 2009, subject to customary closing conditions.

The convertible notes, which are being issued at a price equal to 100% of their face value, will have an interest rate of 5%. The convertible notes will be senior unsecured obligations of the company. The initial conversion price for the convertible notes will be $7.19 per share.

The underwriter for the offering will also have the option to purchase up to $60m principal amount of additional convertible notes solely to cover any over-allotments. The company estimates that the net proceeds from the offering will be approximately $387m after deducting underwriter discounts and commissions and estimated offering expenses payable by the company assuming the over-allotment option is not exercised. The company intends to use the proceeds from the offering for vessel acquisitions and other general corporate purposes.

Concurrently with the offering of the convertible notes, the company has entered into a share lending agreement with Deutsche Bank AG, London Branch (Deutsche Bank AG), under which it will loan to Deutsche Bank AG 26.1 million shares of its common stock. The company has also entered into an equity underwriting agreement with Deutsche Bank Securities Inc. pursuant to which Deutsche Bank AG or its affiliates intend to sell shares of the company's common stock that they will be entitled to borrow from the company under the share lending agreement.


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