This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Eagle Bulk Gets Upgrade After Korea Scare

NEW YORK ( TheStreet) -- Shares of Eagle Bulk Shipping (EGLE - Get Report), which lost more than 11% of its value during the previous session after one of its biggest charterers declared bankruptcy, received a timely upgrade on Wednesday.

FBR Capital Markets moved the stock to outperform from market perform, saying the selloff in Eagle Bulk shares triggered by the receivership of Korea Lines Corp., which came to light Tuesday morning, were "overdone."

>>Amid Glut, Where Will Dry Bulk Rates Go?

Eagle Bulk had hired out about a dozen of its ships under long-term charter contracts to the troubled KLC. Eagle has a fleet of 48 vessels.

In a note to clients Wednesday morning, the firm said it conducted channel checks on Eagle's charters with KLC. Those checks showed that Eagle chartered its ships to KLC at rates below $20,000 a day, according to FBR. "Thus we do not expect Eagle to experience a material negative impact," the research note read.

But according to the calculations of one hedge-fund trader who focuses on shipping stocks, Eagle Bulk has about $700 million in exposure to KLC. Investors also worried that KLC's receivership could put Eagle's loan covenants in jeopardy.

The company hasn't put a dollar figure on its counterparty risk with KLC, but said in a press statement Tuesday that its exposure was "modest."

In its note, FBR also said Eagle stands to benefit because its fleet is composed mainly of smaller dry-cargo vessels, rates for which will outperform the larger capesize ships this year, in FBR's view.

Dry-bulk shares were up modestly Wednesday after a vicious, broad-based selloff a day earlier, as the KLC news coupled with a downgrade by Deutsche Bank served to deflate investor interest in a sector already beset by collapsing rates for its dry-cargo freight services.

Midday Wednesday, Eagle shares were rising 1.5% to $4.07.

Among other big losers from the previous session, Genco Shipping & Trading (GNK - Get Report) was up 1.2%, Navios Maritime Holdings (NM) was gaining 1.3%, Excel Maritime (EXM) was rising 3%, and DryShips (DRYS - Get Report) was higher by 0.8%.

-- Written by Scott Eden in New York

>To contact the writer of this article, click here: Scott Eden.

>To follow the writer on Twitter, go to

>To submit a news tip, send an email to:
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
EXM $0.00 0.00%
EGLE $0.66 0.00%
DRYS $0.12 0.00%
GNK $0.85 0.00%
AAPL $94.02 0.00%


Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs