That didn't take long.
Eagle Bulk Shipping has taken a predicted step into both a shareholder dividend policy and a stock buy-back programme on the strength of a $400m debt refinancing announced on Friday, saying the revamp will save about $8m per year in interest costs.
Some of that will go towards starting a dividend regime that will pay out as much as 30% of net income per quarter, but no less than $0.10 per share.
Eagle announced on Monday that it also will set aside $50m for a share repurchase programme, giving the owner of supramax and ultramax bulkers a double-barrelled approached to returning investor capital.
Eagle, which has faced questions about starting a dividend for months now, thus joins the ranks of peers such as Genco Shipping & Trading and Star Bulk Carriers that have either implemented or increased dividend payouts.
As TradeWinds reported on Friday, Eagle's bank refinancing allowed it to retire $176m in Norwegian bonds while also taking out existing credit facilities, at the same time removing covenants that restricted the amount of dividends.
Eagle disclosed the interest margins on the new financing in Monday's statement, saying the $300m term loan and $100m revolving credit facility will run between 210 and 280 basis points over Libor.
The rate depends on leverage and sustainability criteria, including aligning the fleet's carbon intensity with International Maritime Organization decarbonisation targets.
Five-year transformation
The finance deal is the first "green"-linked loan for the company, which owns a fleet of 53 supramax and ultramax bulkers.
"Today’s announcement is the culmination of a five-year transformation of Eagle that has resulted in a substantially larger and more efficient fleet, as well as a stronger balance sheet," chief executive Gary Vogel said.
"As we plan to take delivery of the 29th vessel acquired during this period, which was purchased in May, we are pleased to be in the position to start returning capital to shareholders.
"Based on our positive market outlook, which is supported by historically strong supply-side fundamentals, we believe the dividend policy authorised by Eagle's board of directors will enable the company to return significant cash to our shareholders, while providing the flexibility to continue to de-lever and pursue accretive growth opportunities."
Eagle also disclosed that the new financing is secured by 49 of its vessels, meaning four ships remain unencumbered by debt, with $50m still available under the revolver.
Also announced was the full banking roster, led by Credit Agricole, Danish Ship Finance, DNB Markets, Nordea, Filial I Norge and SEB as mandated lead arrangers and bookrunners.
Deutsche Bank and ING Bank joined the group, while Credit Agricole is acting as sustainability coordinator.
The first dividend, based on the owner's third-quarter results, will be paid in November.
Despite the announcement, Eagle shares dipped 3.3% to $50.33 in Monday morning trading on the Nasdaq, on a day when other dry bulk stocks were also selling off.
