Paragon’s Banks Give It Some Wiggle Room

Paragon Shipping reported its 4th quarter and year-end 2008 results last week and the results were relatively strong given the overriding weak economy and depressed shipping markets. Looking forward the company has strong earnings visibility, with 98% of the fleet fixed through 2009, and cash well in excess of its current portion of long-term debt. Nevertheless the company was not immune to the travails suffered by the rest of its peers.

The company announced that it had to amend its six credit facilities for covenant breaches. The facilities are detailed in figure 1.

In its presentation, the company also disclosed the current status of the loan covenants as portrayed in figure 2.

Of the seven covenants, four were waived or amended, through 2009 with the balance maintained

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