China Eximbank contributes to $82.6 million loan to Diana Shipping Inc. for acquisition of Los Angeles shipping vessel (Linked to Record ID#63220)

Project narrative

On October 2, 2010, the Export-Import Bank of China and DNB NOR BANK ASA signed an $82,600,000 loan agreement with Lae Shipping Company Inc. and Namu Shipping Company, two special purpose vehicles and wholly-owned subsidiaries of Diana Shipping Inc., a shipping company, that are incorporated under the laws of the Republic of the Marshall Islands. This loan was intended to finance part of the acquisition cost of two ships, one to be purchased by Lae (Hull No. 1234, to be named Los Angeles), and one to be purchased by Namu (Hull No. 1235, to be named Philadelphia). This loan was intended to finance part of the acquisition cost of two ships, one to be purchased by Lae (Hull No. 1234, to be named Los Angeles), and one to be purchased by Namu (Hull No. 1235, to be named Philadelphia). The loan was secured by a first preferred ship mortgage on the vessels, general assignments, charter assignments, operating account assignments, a corporate guarantee from Diana Shipping Inc., and manager's undertakings. The lender was also allowed to require additional security, if at any time the market value of the ships became less than the 125% of the aggregate of loan or the swap exposure. The borrowers were also are required to maintain minimum liquidity of $0.4 million at each operating account, and the guarantor was required to maintain net worth of not less than $150.0 million and at least 25% of the total assets and an average cash balance of $10.0 million. The loan is available in two advances for two ships separately: $41,300,000 for Lae's ship, and $41,300,000 for Namu's ship. This project records Lae's advance of $41,300,000. Each bank's commitment to the total price and to each of the two tranches is uncertain. On April 13, 2010, Lae Shipping Company Inc. and Namu Shipping Company Inc. signed the shipping contract of Los Angeles and Philadelphia with the builder, Shanghai Jiangnan-Changxing Shipbuilding Co., Ltd., and the seller, China Shipbuilding Trading Company. The contract related to the construction and sale of each ship at a contract price of $58,000,000 each. Diana Shipping Inc. took delivery of the Los Angeles in February 2012 and of the Philadelphia in May 2012. On February 15, and May 18, 2012, Lae and Namu drew down an aggregate of $72.1 million of the loan, which represents 70% of the vessels' market value on delivery. The loan bears interest at LIBOR rate (0.455% as the October 6-months LIBOR in 2010) plus a margin of 2.50% per annum and is calculated at 2.955%. An agency fee of $10,000 is also paid annually until its full repayment. The first repayment is due three months after the drawdown date and the maturity period of the loan is 10 years. The Lae advance for the Los Angeles is repayable in 40 quarterly installments of approximately $.6 million each and a balloon of $12.332 million payable together with the last installment on February 15, 2022. The agreement was amended on Feb 15, 2017 and on May 18, 2017. Pursuant to an amendment of the loan agreement dated May 18, 2017, each of the individual banks was allowed to demand repayment in full of such bank's contribution in any or all advances on August 16, 2019. On March 1, 2019, the banks waived their right to exercise such a prepayment option.