DryShips Back at the Money Trough (DRYS)

DryShips Inc. (NASDAQ: DRYS) is back at the trough for more capital.  The Greek shipping and marine transport company announced after the close that it has commenced a public offering of $150 million in convertible senior notes.  The company said that these notes are being offered as “additional notes under an indenture, as supplemented by a supplemental indenture, pursuant to which the Company issued $460,000,000 aggregate principal amount of convertible senior notes on November 25, 2009.”  The new notes currently offered and those notes previously issued will be treated as a single series of debt securities under the indenture.  This sounds like a sneaky way of getting around calling this a new offering.

DryShips plans to use the proceeds from the offering for vessel acquisitions, working capital and other general corporate purposes. Deutsche Bank Securities is the sole book-running manager for the offerings, and it has a $22.5 million overallotment option.

The marine transport and services company will enter into a share lending agreement with Deutsche Bank where it will loan to Deutsche Bank AG shares of its common stock having a market value of about $60 million. The Company also intends to enter into an equity underwriting agreement.  These are deemed the hedges by investors.   The Company will not receive any of the proceeds from this sale of common stock but will receive a nominal lending fee from Deutsche Bank AG under the share lending agreement.

Shares closed up 4.7% at $6.49 today, but the stock is now down 4.5% at $6.20 in the after-hours session on the news.  The 52-week range is $4.90 to $11.48, a mere fraction of its former highs.

JON OGG