Simeon Palios-led Diana Shipping is tapping the Norwegian capital markets system for the first time with a bond issue aimed at refinancing existing debt.
Diana is looking to close a $100m bond with an additional $25m available in the future.
It will use proceeds from the offering to redeem a baby bond, which was issued in the US in 2015 and will mature in 2020.
Diana, which was first reported to be eyeing the Norwegian bond market by TradeWinds in March this year, has joined a group of shipowners using a post summer window in the market to issue fresh debt to meet refinancing needs.
Fearnley Securities and Nordea acted as join bookrunners for the Diana Shipping issue, which will carry a coupon of 9.50%.
Amit Mehrotra of Deutsche Bank said: "Activity in the unsecured bond market has been very limited across the dry bulk industry and thus this issuance could be an important data point for peers looking to tap the public bond markets.
"While dry bulk fundamentals are improving and Diana Shipping utilizes a conservative time charter approach, the company’s fleet is a bit on the older side with an average age of 10 years which likely drove the rate higher."
Diana will list the bonds, which will mature in September 2023, on the Oslo Stock Exchange.
Ofjell, Wallenius Wilhelmsen Logistics, Teekay LNG Partners and John Fredriksen’s Ship Finance International have all tapped the Norwegian bond market since the summer.
Haseeb Syed of Danske Bank told TradeWinds in early September the market was off to a good start after the summer break with more debt deals in the pipeline.
“You have had capital coming into the Norwegian high-yield funds. Investors have money and they are just waiting for new deals to come out.”
