Eagle Bulk Shipping
Inc. has signed contracts with IHI Marine United
Inc., one of Japan's shipyards, for the construction of two Future-56 class Supramax vessels
. These 56,000 deadweight ton vessels have a contract price of approximately $33.5 million each and are expected to be delivered in January and February of 2010, respectively. Upon delivery of these vessels, Eagle Bulk's fleet will include 18 vessels, 14 of which will be Supramax-class.
The company also announced that it has amended its existing revolving credit facility from its sole lender, Royal Bank of Scotland plc, to increase the borrowing capacity from $450 million to $500 million. The financing of the new vessels will not affect the Company's quarterly cash dividend payout.
The contract price for each vessel is 3.655 billion Japanese Yen or approximately $33.5 million after giving effect to currency hedges. The Company has placed deposits of 1.462 billion Japanese Yen or $12.4 million for each of the vessels which were funded through borrowings from its credit facility, and will pay an additional 10% of the contract price in November 2009, and the remainder upon delivery which is expected in January and February 2010, respectively. The Company has hedged its Japanese Yen exposures into U.S. Dollars in order to effectively eliminate currency risk.
The $500 million amended credit facility contains the same terms as the Company's previous facility with a maturity in 2016. The structure of our financing will enable us to capitalize pre-delivery payments under the shipbuilding contracts and costs associated with supervision and financing the new vessels. As a result, our earnings available for quarterly cash dividends
to our shareholders will not be impacted. Furthermore, the amended credit facility increases the Company's undrawn commitment to over $260 million, providing availability to fund future growth.