Diana Shipping offering at least $40 million $25-par senior notes due 2020 at 8.5%-8.75% yield

By Stephanie N. Rotondo

Phoenix, May 20 – Diana Shipping Inc. plans to sell at least $40 million $25-par senior unsecured notes due May 2020, according to a prospectus filed with the Securities and Exchange Commission on Wednesday.

Price talk is 8.5% to 8.75%, a market source said.

Up to $12.75 million of the notes have been set aside for purchase by Simeon Palios, chief executive officer, or any of his affiliates, as well as other executive officers and directors of the company.

Stifel Nicolaus & Co. Inc., Deutsche Bank Securities Inc., Janney Montgomery Scott LLC, BB&T Capital Markets and Wunderlich Securities Inc. are the joint bookrunners.

Interest will be payable quarterly. The notes become redeemable in 2017 – or in whole at any time upon a taxation change – at par plus accrued interest. The company can also redeem the notes, in whole, prior to 2017 at par plus accrued interest and a make-whole premium.

The Athens, Greece-based shipping company has applied to list the notes on the New York Stock Exchange under the ticker symbol “DSXN.”

Proceeds will be used for general corporate purposes and working capital. That may include vessel acquisitions or new construction.

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