Diana Shipping has raised USD55 million through a bond offering, although industry bonds issuances remain sharply lower so far this year.
NYSE-listed Diana will pay an 8.5% annual interest rate on the senior unsecured notes, which will mature in 2020. Underwriters have the option to purchase an additional USD8.25 million in notes, which would bring total proceeds to USD63.25 million if fully exercised.
Diana founder Simeon Palios and other executives are purchasing USD12.75 million of the notes at the public offering price. The company may use proceeds for the acquisition of new or secondhand vessels.
The notes are so-called ‘baby bonds’, denominated in USD25 units that appeal to retail investors as opposed to the traditional USD1,000 notes that are purchased by institutional investors. The Diana Shipping baby bonds will be listed on the New York Stock Exchange.
According to data compiled IHS Maritime, US-listed shipping companies have now raised a total of USD377 million the bond market so far this year. That is down 80% from USD1.924 billion raised through bond sales by US-listed shipping companies in January-May 2014.
Including both equity and debt offerings, US-listed companies have raised USD2.096 billion in gross proceeds so far this year, according to IHS Maritime data. That represents only half the USD4.148 billion raised by the sector during the same period last year.