Costamare Cut Its Dividend By 65% And Stock Fell 19% Tuesday

New Financing Arrangements

Costamare reported it had entered into three new financing arrangements with lenders.

First, in August, it entered into a loan agreement with a European financial institution for the financing of its third and fourth 11,000 TEU (20-foot equivalent unit) vessels on order. The facility is for an amount of up to $87 million and will be repayable over three years.

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Second, also in August, the company finalized the refinancing of two credit facilities that it secured with its Cosco Beijing, Sealand New York and Sealand Washington vessels. Under the new terms, balloon installments of $90 million, due in the second and third quarter of 2018, have now been extended to be amortized over three years.

Finally, in September, the company refinanced an existing $1 billion loan facility. As part of the new agreement, a balloon payment of $270 million, due in the second quarter of 2018, has also been extended to be amortized over three years.

Dividend Adjustment

In conjunction with the financing announcement, Costamare said a special meeting was held during which the company's board of directors approved management's recommendation to lower its cash dividend payment to $0.10 per share from a prior payment of $0.29 per share.

The $0.10 dividend will be payable on November 4 to shareholders of record as of October 21.

Gregory Zikos, chief financial officer of the company said, "Our goal is to strengthen the Company and enhance long term shareholder value. Managing our debt repayment schedule, minimizing our capital commitments and adjusting the dividend are necessary steps in today's market environment."

He added, "As long term committed shareholders, members of the founding family, currently controlling an interest of above 65 percent in the aggregate, have each decided for the second consecutive quarter to reinvest in full, the third quarter cash dividend under our dividend reinvestment plan available to all common stockholders."

At last check, Costamare was up 1.78 percent at $7.45, slightly rebounding from Tuesday's losses.

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