Terms

Series

8.875% Series B Cumulative Redeemable Perpetual Preferred Shares

Liquidation Preference

$25.00

Coupon Rate

8.875%

Rate Type

Fixed

Annual Dividend

$2.22

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

February 14, 2019

First Call Price

$25.00

Redemption Notice Period

30 days

Capital Stack Ranking

Junior To: Senior Stock, All Indebtedness And Other Liabilities Including Trade Payables; Pari Passu With: Parity Stock; Senior To: Common Shares, Series A Participating Preferred Stock, Junior Stock

Regulatory (Basel III) Call

No

Tax Classification

Other

Qualifies for QDI

Yes

Qualifies for DRD

No

Shares Offered

2,400,000

Prospectus Summary

Diana Shipping Inc., a Marshall Islands-incorporated global dry bulk shipping company, is offering 2,400,000 shares of its 8.875% Series B Cumulative Redeemable Perpetual Preferred Shares at a liquidation preference of $25.00 per share, generating gross proceeds of $60 million. The fixed dividend of $2.21875 per share annually ($0.5546875 quarterly) is payable on January 15, April 15, July 15, and October 15 each year. These shares are cumulative, meaning that any missed dividends accumulate and must be paid in full before any distributions can be made to common or junior stockholders. The shares are perpetual with no mandatory redemption date, and Diana may optionally redeem them at $25.00 per share on or after February 14, 2019. The Series B Preferred Shares rank senior to Diana Shipping's common stock and Series A Participating Preferred Stock, and pari passu with any future parity preferred stock. However, they rank junior to all of the company's indebtedness and other liabilities, including trade payables — Diana had approximately $452 million in secured debt outstanding as of September 30, 2013. As a holding company that depends entirely on cash flows from its wholly-owned vessel-owning subsidiaries, there is structural subordination risk: the company's ability to service the preferred dividends depends on upstream distributions from subsidiaries that are themselves subject to loan covenants and Marshall Islands legal restrictions. There is no regulatory capital call provision, as Diana Shipping is a non-bank shipping company. At the $25.00 offering price, the shares yield 8.875% annually. Dividends may qualify as 'qualified dividend income' taxable at preferential 15%/20% rates for non-corporate U.S. holders, subject to the company's PFIC status risk — if Diana is classified as a PFIC, dividends would instead be taxed at ordinary income rates. Record dates fall between 5 and 60 days before each quarterly payment date. The dividend stopper prevents Diana from paying dividends on or repurchasing common stock or any junior securities unless all accumulated preferred dividends are current; however, because dividends require board declaration and are payable only from legally available funds, payment is not guaranteed even with the cumulative feature.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If full cumulative dividends on the Series B Preferred Shares have not been paid, the company may not declare or pay dividends on common stock or any other junior stock, nor may it redeem or repurchase junior stock.

Other Preferreds from Diana Shipping Inc.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 51 (Average)