424B5 1 s001939x3_424b5.htm 424B5

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Filed Pursuant to Rule 424(b)(5)
Registration Number 333-219381

PROSPECTUS SUPPLEMENT
(To Prospectus dated July 20, 2017)

$50,000,000

8.30% Senior Notes due 2022


We are offering $50,000,000 aggregate principal amount of our 8.30% Senior Notes due 2022 (the “Notes”). The Notes will bear interest from November 9, 2017 at a rate of 8.30% per year. The Notes will mature on November 15, 2022. Interest on the Notes will be payable quarterly in arrears on the 15th day of February, May, August and November of each year, commencing on February 15, 2018. We may redeem the Notes at our option, in whole or in part, at any time on or after May 15, 2019 at a redemption price equal to 100% of the principal amount to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, as described in “Description of Notes—Optional Redemption.” Prior to May 15, 2019, we may redeem the Notes, in whole or in part, at a price equal to 100% of the principal amount plus a make-whole premium and accrued interest to the date of redemption. In addition, we may redeem the Notes in whole, but not in part, at any time at our option, at a redemption price equal to 100% of the principal amount to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, if certain events occur involving changes in taxation, as described in this prospectus under “Description of Notes—Optional Redemption for Changes in Withholding Taxes.”

The Notes will be our senior unsecured obligations and will rank equally with all of our existing and future senior unsecured and unsubordinated debt. The Notes will not be guaranteed by any of our subsidiaries. The Notes will be effectively subordinated to our existing and future secured debt, to the extent of the value of the assets securing such debt, and will be structurally subordinated to all existing and future debt and other liabilities of our subsidiaries. The Notes will be issued in minimum denominations of $25.00 and integral multiples of $25.00 in excess thereof.



An investment in the Notes involves risks. See the section titled “Risk Factors” of this prospectus to read about factors you should consider before buying the Notes. You should also consider the risk factors described in the documents incorporated by reference in this prospectus.



 
Per Note
Total
Public offering price(1)(2)
$
25.00
 
$
50,000,000.00
 
Underwriting discounts and commissions(2)
$
0.7875
 
$
1,575,000.00
 
Proceeds, before expenses, to us(3)
$
25.00
 
$
50,000,000.00
 

                     

(1) Plus accrued interest from November 9, 2017 if settlement occurs after such date.
(2) We have agreed to reimburse the underwriters for certain legal expenses incurred in connection with the offering. See “Underwriting.”
(3) We shall pay all underwriting discounts and commissions as well as any fees and expense related to this offering with cash on hand.

We will apply for the listing of the Notes on the Nasdaq Global Select Market (“NASDAQ”) under the symbol “SBLKM”. If approved for listing, trading on NASDAQ is expected to commence within 30 days after the Notes are first issued.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

We expect that delivery of the Notes will be made to investors on or about November 9, 2017, through the book-entry system of The Depository Trust Company for the accounts of its participants.



Morgan Stanley
Stifel

The date of this prospectus is November 2, 2017

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Prospectus Supplement

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Prospectus

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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ABOUT THIS PROSPECTUS SUPPLEMENT

This document is in two parts. The first part is this prospectus supplement, which contains specific information about the terms on which we are offering and selling the Notes. The second part is the accompanying prospectus dated July 20, 2017, which contains and incorporates by reference important business and financial information about us and other information about the offering. If the information set forth in this prospectus supplement differs in any way from the information set forth in the accompanying prospectus or the information contained in any document incorporated by reference herein or therein, the information contained in the most recently dated document shall control. All references in this prospectus supplement to this “prospectus” refer to this prospectus supplement together with the accompanying prospectus.

As permitted under the rules of the Securities and Exchange Commission, or the Commission, this prospectus incorporates important business information about us that is contained in documents that we have previously filed with the Commission but that are not included in or delivered with this prospectus. You may obtain copies of these documents, without charge, from the website maintained by the Commission at www.sec.gov, as well as other sources. You may also obtain copies of the incorporated documents, without charge, upon written or oral request to Star Bulk Carriers Corp., c/o Star Bulk Management Inc., 40 Agiou Konstantinou Str., Maroussi, 15124, Athens, Greece. See “Where You Can Find Additional Information.”

We do not authorize any person to provide information other than that provided in this prospectus and the documents incorporated by reference. We are not making an offer to sell the Notes in any state or other jurisdiction where the offer or sale is not permitted. You should assume that the information contained in this prospectus and the documents incorporated by reference is accurate only as of their respective dates, and you should not consider any information in this prospectus or in the documents incorporated by reference herein to be investment, legal or tax advice. We encourage you to consult your own counsel, accountant and other advisors for legal, tax, business, financial and related advice regarding an investment in our securities.

Unless otherwise indicated or unless the context requires otherwise, all references in this prospectus supplement to “Star Bulk,” the “Company,” “we,” “us,” “our,” or similar references, mean Star Bulk Carriers Corp. and, where applicable, its consolidated subsidiaries. In addition, we use the term deadweight, or dwt, in describing the size of vessels. Dwt expressed in metric tons, each of which is equivalent to 1,000 kilograms, refers to the maximum weight of cargo and supplies that a vessel can carry.

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INFORMATION INCORPORATED BY REFERENCE

The Commission allows us to “incorporate by reference” information that we file with it. This means that we can disclose important information to you by referring you to those filed documents. The information incorporated by reference is considered to be a part of this prospectus, and information that we file later with the Commission prior to the termination of this offering will also be considered to be part of this prospectus and will automatically update and supersede previously filed information, including information contained in this document.

We incorporate by reference the documents listed below and any future filings made with the Commission under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”):

Annual Report on Form 20-F (the “2016 20-F”) for the year ended December 31, 2016, filed with the Commission on March 22, 2017, containing our audited consolidated financial statements for the most recent fiscal year for which those statements have been filed; and
Report on Form 6-K (the “Q2 2017 6-K”), filed with the Commission on September 26, 2017, including the exhibits thereto, which contain our unaudited interim condensed consolidated financial statements as of and for the six months ended June 30, 2017 and 2016 and the associated Management’s Discussion and Analysis of Financial Condition and Results of Operations (Exhibit 99.1).

We are also incorporating by reference all subsequent Annual Reports on Form 20-F that we file with the Commission and certain reports on Form 6-K that we furnish to the Commission after the date of this prospectus that state that they are incorporated by reference into this prospectus until this offering is terminated. In all cases, you should rely on the later information over different information included in this prospectus.

You should rely only on the information contained or incorporated by reference in this prospectus. We have not, and the underwriters have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus as well as the information we previously filed with the Commission and incorporated by reference, is accurate as of the dates on the front cover of those documents only. Our business, financial condition and results of operations and prospects may have changed since those dates.

You may request a free copy of the above mentioned filings or any subsequent filing we incorporated by reference to this prospectus by writing or telephoning us at the following address:

Star Bulk Carriers Corp.
c/o Star Bulk Management Inc.
40 Agiou Konstantinou Str.
Maroussi 15124, Athens, Greece
011-30-210-617-8400 (telephone number)

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WHERE YOU CAN FIND ADDITIONAL INFORMATION

As required by the Securities Act, we filed a registration statement relating to the securities offered by this prospectus with the Commission. This prospectus supplement is a part of that registration statement, which includes additional information.

We file annual and special reports with the Commission. You may read and copy any document that we file and obtain copies at prescribed rates from the Commission’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling 1 (800) SEC-0330. The Commission maintains a website (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the Commission. Our filings are also available on our website at http://www.starbulk.com. The information on our website, however, is not, and should not be deemed to be, a part of this prospectus.

This prospectus supplement is part of the registration statement and does not contain all of the information in the registration statement. The full registration statement may be obtained from the Commission or us, as indicated below. Documents establishing the terms of the offered securities are filed as exhibits to the registration statement. Statements in this prospectus supplement about these documents are summaries and each statement is qualified in all respects by reference to the document to which it refers. You should refer to the actual documents for a more complete description of the relevant matters. You may inspect a copy of the registration statement at the Commission’s Public Reference Room in Washington, D.C., as well as through the Commission’s website.

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SUMMARY

This summary highlights information contained or incorporated by reference in this prospectus and is qualified in its entirety by the more detailed information and financial statements included or incorporated by reference elsewhere in this prospectus. This summary does not contain all of the information that may be important to you. Where we state that a measurement is “on an As Adjusted Basis” it means that measurement is computed after giving effect to all of the transactions set forth in the bullets in the first paragraph under the caption, “—Capitalization.” As an investor or prospective investor, you should carefully review this entire prospectus and the documents incorporated by reference herein, including the section of this prospectus supplement titled “Risk Factors,” the section of the accompanying prospectus titled “Risk Factors,” “Item 3. Key Information—D. Risk Factors” in our 2016 20-F and the more detailed information that appears later in this prospectus before making an investment in the Notes.

OUR BUSINESS

We are an international shipping company with extensive operational experience that owns and operates a fleet of dry bulk carrier vessels. On a fully delivered basis, we will have a fleet of 74 vessels consisting primarily of Newcastlemax, Capesize as well as Kamsarmax, Ultramax and Supramax vessels with a carrying capacity between 209,537 dwt and 52,055 dwt. Our vessels transport a broad range of major and minor bulk commodities, including ores, coal, grains and fertilizers, along worldwide shipping routes. Our highly experienced executive management team, with over 120 years of combined shipping industry experience, is led by Mr. Petros Pappas, who has more than 39 years of shipping industry experience and has managed approximately over 330 vessel acquisitions and dispositions.

As of September 15, 2017, our operating fleet consisted of 71 vessels with an aggregate carrying capacity of approximately 7.5 million dwt and an average age of 8.0 years. We also have three newbuilding vessels under construction at a shipyard in China, one of which will be delivered in November 2017 and the remaining two in January 2018. When our newbuilding program is completed, on a fully delivered basis we expect our 74-vessel fleet to have an average age of 7.9 years and an aggregate carrying capacity of 8.1 million dwt, consisting of Newcastlemax, Capesize, Post Panamax, Kamsarmax, Panamax, Ultramax and Supramax vessels with carrying capacities between 209,537 dwt and 52,055 dwt. On a fully delivered basis and based on publicly available information, we believe our fleet will make us one of the largest U.S. publicly traded dry bulk shipping companies by deadweight tonnage.

As of September 15, 2017, the total aggregate remaining payments related to the construction of our remaining three newbuilding vessels were expected to be $103.5 million, payable upon the delivery of each vessel. We expect HN 1342 (tbn Star Eleni) will be delivered to us in November 2017, and HN 1361 (tbn Star Magnanimus) and HN 1343 (tbn Star Leo) to follow in January 2018. As of September 15, 2017, on an As Adjusted Basis, we had $252.5 million of cash on hand and we had obtained commitments for up to approximately $40.0 million of secured financing for the HN 1361 (tbn Star Magnanimus). We are working on the final documentation of secured financing for up to approximately $60.0 million for the remaining two newbuilding vessels.

We are focused on taking advantage of economies of scale in commercial, technical and procurement management. Our fleet is diversified across the various dry bulk segments (from Newcastlemaxes of approximately 210,000 dwt to Supramaxes of approximately 52,000 dwt) allowing us to serve our customer needs in a variety of dry bulk cargoes over multiple routes across the globe on a continuous basis. For our operating fleet and our newbuildings, we have focused on vessels built at leading Japanese and Chinese shipyards, which, in our experience, are more reliable and less expensive to operate and are accordingly preferred by charterers. Currently, because of prevailing market conditions, we primarily employ our vessels in the spot market, under short term time charters or voyage charters. We deploy a variety of commercial tools in order to improve the commercial performance of our fleet, such as participation in specialized pools, voyage charters, as well as our recently established logistics subsidiary, Star Logistics Management S.A. (“Star Logistics”). We are one of the founding members of the CCL Pool, a commercial platform that specialize in chartering of Capesize vessels and operates approximately 60 Capesize vessels from five prominent dry bulk owners. In addition, we expect that the establishment of Star Logistics will further expand our commercial capability through additional commercial expertise and advanced tools on the Kamsarmax and geared bulk carriers. On a fully-delivered basis, we will have a large, modern, diverse and high-quality fleet, built at leading shipyards. As a result of customer preferences for our ships, nimble commercial management and economies of scale, we believe we will have an opportunity to capitalize on rising market demand during a period of reduced fleet growth.

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OUR FOUNDER AND HIS TRACK RECORD

Our founder and Chief Executive Officer, Mr. Pappas, has an established track record in the dry bulk industry, with more than 39 years of experience and involvement in approximately over 330 vessel acquisitions and dispositions. Entities under his management and control owned up to 30 vessels in 2001, most of which were acquired during the first quarter of 1997, the second quarter of 1998 and the second quarter of 2001, periods corresponding to low asset values and freight rates. Substantially all of these vessels were sold by the end of 2005, during a period of record high vessel values and levels of the Baltic Dry Index (“BDI”) (a daily average of charter rates for key dry bulk routes).

As further described in “-Our competitive strengths,” Mr. Pappas has extensive experience in operating and investing in shipping, including through his principal shipping operations and investment vehicle, Oceanbulk Maritime S.A. (“Oceanbulk Maritime”).

OUR FLEET

As of September 15, 2017, our operating fleet consisted of 71 vessels with an aggregate carrying capacity of approximately 7.5 million dwt and an average age of 8.0 years. We also have three newbuilding vessels under construction at a shipyard in China, all of which are expected to be delivered by the end of January 2018. When our newbuilding program is completed, on a fully delivered basis we expect our 74-vessel fleet to have an average age of 7.9 years and an aggregate carrying capacity of 8.1 million dwt.

Our fleet also included one chartered-in vessel, the Astakos (ex- Maiden Voyage), which we sold on September 15, 2015 to a third party and chartered in under a two-year time charter. The charter, which expired in August 2017, was accounted for as operating lease.

The following tables present summary information relating to our existing fleet and our newbuilding vessels as of September 15, 2017:

Existing On the Water Fleet

 
Vessel Name
Vessel Type
Capacity (dwt)
Year Built
Date Delivered to Star Bulk
 
1
 
Goliath
Newcastlemax
 
209,537
 
 
2015
 
July-15
 
2
 
Gargantua
Newcastlemax
 
209,529
 
 
2015
 
April-15
 
3
 
Star Poseidon
Newcastlemax
 
209,475
 
 
2016
 
February-16
 
4
 
Maharaj
Newcastlemax
 
209,472
 
 
2016
 
July-15
 
5
 
Star Ariadne(1)
Newcastlemax
 
207,812
 
 
2017
 
March-17
 
6
 
Star Virgo(1)
Newcastlemax
 
207,810
 
 
2017
 
March-17
 
7
 
Star Libra(1)
Newcastlemax
 
207,765
 
 
2016
 
June-16
 
8
 
Star Marisa(1)
Newcastlemax
 
207,709
 
 
2016
 
March-16
 
9
 
Leviathan
Capesize
 
182,511
 
 
2014
 
September-14
 
10
 
Peloreus
Capesize
 
182,496
 
 
2014
 
July-14
 
11
 
Star Martha
Capesize
 
180,274
 
 
2010
 
October-14
 
12
 
Star Pauline
Capesize
 
180,274
 
 
2008
 
December-14
 
13
 
Pantagruel
Capesize
 
180,181
 
 
2004
 
July-14
 
14
 
Star Borealis
Capesize
 
179,678
 
 
2011
 
September-11
 
15
 
Star Polaris
Capesize
 
179,600
 
 
2011
 
November-11
 
16
 
Star Angie
Capesize
 
177,931
 
 
2007
 
October-14
 
17
 
Big Fish
Capesize
 
177,662
 
 
2004
 
July-14
 
18
 
Kymopolia
Capesize
 
176,990
 
 
2006
 
July-14
 
19
 
Big Bang
Capesize
 
174,109
 
 
2007
 
July-14
 
20
 
Star Aurora
Capesize
 
171,199
 
 
2000
 
September-10
 
21
 
Amami
Post Panamax
 
98,681
 
 
2011
 
July-14
 
22
 
Madredeus
Post Panamax
 
98,681
 
 
2011
 
July-14
 
23
 
Star Sirius
Post Panamax
 
98,681
 
 
2011
 
March-14
 
24
 
Star Vega
Post Panamax
 
98,681
 
 
2011
 
February-14
 
25
 
Star Angelina
Kamsarmax
 
82,981
 
 
2006
 
December-14
 
26
 
Star Gwyneth
Kamsarmax
 
82,790
 
 
2006
 
December-14

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Vessel Name
Vessel Type
Capacity (dwt)
Year Built
Date Delivered to Star Bulk
 
27
 
Star Kamila
Kamsarmax
 
82,769
 
 
2005
 
September-14
 
28
 
Pendulum
Kamsarmax
 
82,619
 
 
2006
 
July-14
 
29
 
Star Maria
Kamsarmax
 
82,598
 
 
2007
 
November-14
 
30
 
Star Markella
Kamsarmax
 
82,594
 
 
2007
 
September-14
 
31
 
Star Danai
Kamsarmax
 
82,574
 
 
2006
 
October-14
 
32
 
Star Georgia
Kamsarmax
 
82,298
 
 
2006
 
October-14
 
33
 
Star Sophia
Kamsarmax
 
82,269
 
 
2007
 
October-14
 
34
 
Star Mariella
Kamsarmax
 
82,266
 
 
2006
 
September-14
 
35
 
Star Moira
Kamsarmax
 
82,257
 
 
2006
 
November-14
 
36
 
Star Nina
Kamsarmax
 
82,224
 
 
2006
 
January-15
 
37
 
Star Renee
Kamsarmax
 
82,221
 
 
2006
 
December-14
 
38
 
Star Nasia
Kamsarmax
 
82,220
 
 
2006
 
August-14
 
39
 
Star Laura
Kamsarmax
 
82,209
 
 
2006
 
December-14
 
40
 
Star Jennifer
Kamsarmax
 
82,209
 
 
2006
 
April-15
 
41
 
Star Helena
Kamsarmax
 
82,187
 
 
2006
 
December-14
 
42
 
Star Charis
Kamsarmax
 
81,711
 
 
2013
 
March-17
 
43
 
Star Suzanna
Kamsarmax
 
81,711
 
 
2013
 
May-17
 
44
 
Mercurial Virgo
Kamsarmax
 
81,545
 
 
2013
 
July-14
 
45
 
Star Iris
Panamax
 
76,466
 
 
2004
 
September-14
 
46
 
Star Emily
Panamax
 
76,417
 
 
2004
 
September-14
 
47
 
Star Vanessa(2)
Panamax
 
72,493
 
 
1999
 
November-14
 
48
 
Idee Fixe(1)
Ultramax
 
63,458
 
 
2015
 
March-15
 
49
 
Roberta(1)
Ultramax
 
63,426
 
 
2015
 
March-15
 
50
 
Laura(1)
Ultramax
 
63,399
 
 
2015
 
April-15
 
51
 
Kaley(1)
Ultramax
 
63,283
 
 
2015
 
June-15
 
52
 
Kennadi
Ultramax
 
63,262
 
 
2016
 
January-16
 
53
 
Mackenzie
Ultramax
 
63,226
 
 
2016
 
March-16
 
54
 
Star Challenger
Ultramax
 
61,462
 
 
2012
 
December-13
 
55
 
Star Fighter
Ultramax
 
61,455
 
 
2013
 
December-13
 
56
 
Star Lutas
Ultramax
 
61,347
 
 
2016
 
January-16
 
57
 
Honey Badger
Ultramax
 
61,320
 
 
2015
 
February-15
 
58
 
Wolverine
Ultramax
 
61,292
 
 
2015
 
February-15
 
59
 
Star Antares
Ultramax
 
61,258
 
 
2015
 
October-15
 
60
 
Star Acquarius
Ultramax
 
60,916
 
 
2015
 
July-15
 
61
 
Star Pisces
Ultramax
 
60,916
 
 
2015
 
August-15
 
62
 
Diva
Supramax
 
56,582
 
 
2011
 
July-17
 
63
 
Strange Attractor
Supramax
 
55,742
 
 
2006
 
July-14
 
64
 
Star Omicron
Supramax
 
53,489
 
 
2005
 
April-08
 
65
 
Star Gamma
Supramax
 
53,098
 
 
2002
 
January-08
 
66
 
Star Zeta
Supramax
 
52,994
 
 
2003
 
January-08
 
67
 
Star Delta
Supramax
 
52,434
 
 
2000
 
January-08
 
68
 
Star Theta
Supramax
 
52,425
 
 
2003
 
December-07
 
69
 
Star Epsilon
Supramax
 
52,402
 
 
2001
 
December-07
 
70
 
Star Cosmo
Supramax
 
52,247
 
 
2005
 
July-08
 
71
 
Star Kappa
Supramax
 
52,055
 
 
2001
 
December-07
 
 
 
 
Total dwt:
 
7,481,854
 
 
 
 
 
(1) Subject to a bareboat charter accounted for as a capital lease.
(2) We have agreed to sell this vessel and have delivered it to its new owner on November 1, 2017.

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Newbuilding Vessels

 
Vessel Name
Vessel Type
Capacity (dwt)
Shipyard
Expected Delivery Date
1
HN 1342 (tbn Star Eleni)
Newcastlemax
 
208,000
 
 
SWS, China
 
November-17
2
HN 1361 (tbn Star Magnanimus)(1)
Newcastlemax
 
208,000
 
 
SWS, China
 
January-18
3
HN 1343 (tbn Star Leo)
Newcastlemax
 
208,000
 
 
SWS, China
 
January-18
 
 
Total dwt:
 
624,000
 
 
 
 
 
(1) Subject to a bareboat charter that will be accounted for as a capital lease.

OUR COMPETITIVE STRENGTHS

We believe that we possess a number of competitive strengths in our industry, including:

Track record of fleet growth with an extensive pipeline of attractive newbuilding vessels

Our operating fleet of dry bulk carrier vessels was built at leading Japanese, Chinese and Korean shipyards between 1999 and 2017, all of which are serving existing customers. Our management team’s newbuilding philosophy has been to focus on building vessels exclusively at what we believe to be among the leading shipyards in Japan and China rather than simply purchasing available slots at any shipyard. Based on our experience, we believe that charterers will prefer newer, high-quality vessels and that such vessels will help to reduce operating and maintenance expenses and increase utilization rates. Since our creation, Mr. Pappas has leveraged his relationships with the shipyards to carefully plan our newbuilding program. Our newbuilding program was designed to take advantage of economies of scale as quickly as practicable, adding since 2014 a total capacity of approximately 2.8 million dwt over 22 vessels. We currently have agreements for three newbuilding vessels with a leading shipyard in China, one of which will be delivered to us in 2017 and the remaining two in 2018. As of September 15, 2017, the average age of our operating fleet was 8.0 years. When our newbuilding program is completed (which we expect in the first quarter of 2018), on a fully delivered basis, our fleet is expected to consist of 74 wholly owned vessels, with an average age of 7.9 years and an aggregate capacity of 8.1 million dwt. We believe that our operating fleet and our expected newbuilding vessels delivery schedule give us a competitive advantage.

Focus on fuel efficiency and improving vessel operations

All of our newbuilding vessels and 22 of our operating vessels are Eco-type vessels, which enable us to take advantage of available fuel cost savings and operational efficiencies and give us the opportunity to generate advantageous daily time charter equivalent (“TCE”) rates, particularly in an environment in which charterhire rates are relatively low. In addition, over 30% of our operating fleet has been equipped with a sophisticated vessel remote monitoring system that allows us to collect real-time information on the performance of critical on-board equipment, with a particular focus on fuel consumption and engine performance. Using this information, we are able to be proactive in identifying potential problems and evaluating optimum operating parameters during various sea passage conditions. We also are able to compare actual vessel performance to reported vessel performance and provide feedback to crews in real time, thereby reducing the likelihood of errors or omissions by our crews. The vessel remote monitoring system is designed to enhance our ability to manage the operations of our vessels, thereby increasing operational efficiency and reducing maintenance costs and off-hire time. In addition, because of the similarities between certain of our vessels, we can take advantage of efficiencies in crewing, training and spare parts inventory management and can apply technical and operational knowledge of one ship to its sisterships. In addition to our Eco-type vessels, 29 of our operating vessels are being equipped with sliding engine valves and alpha lubricators, making them semi-Eco vessels with increased fuel efficiency and decreased lubricant consumption.

Experienced management team with a strong track record in the shipping industry

Our company’s leadership has considerable shipping industry expertise. Our founder and Chief Executive Officer, Mr. Pappas, has an established track record in the dry bulk industry, with more than 39 years of experience and more than 330 vessel acquisitions and dispositions. Mr. Pappas has extensive experience in operating and investing in shipping, including through his principal shipping operations and investment vehicle, Oceanbulk Maritime. Mr. Pappas also has extensive relationships in the shipping industry, and he has leveraged his deep relationships with shipbuilders to formulate our newbuilding program.

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Mr. Hamish Norton, our President, is also the Head of Corporate Development and Chief Financial Officer of Oceanbulk Maritime with more than 24 years of experience in the shipping industry. Prior to joining Oceanbulk Maritime, from 2007 through 2012, Mr. Norton was a Managing Director and the Global Head of the Maritime Group at Jefferies LLC, and from 2003 to 2007, he was head of the shipping practice at Bear Stearns. Mr. Norton has advised in numerous capital markets and mergers and acquisitions transactions by shipping companies.

Mr. Christos Begleris, our Co-Chief Financial Officer, has served as Deputy Chief Financial Officer of Oceanbulk Maritime since 2013 and was the Chief Financial Officer of Oceanbulk from January 2014. He has been involved in the shipping industry since 2008 and has considerable banking and capital markets experience, having executed more than $9.0 billion of acquisitions and financings.

Mr. Simos Spyrou, our Co-Chief Financial Officer, has served as Chief Financial Officer of Star Bulk since September 2011. Mr. Spyrou has more than 14 years of experience in the Greek equity and derivative markets at the Hellenic Exchanges Group.

Mr. Nicos Rescos, our Chief Operating Officer, has served as the Chief Operating Officer of Oceanbulk Maritime since April 2010 and the Commercial Director of Goldenport Holdings Inc. since 2000. He has been involved in the shipping industry in key commercial positions since 1993 and has strong expertise in the dry bulk, container and product tanker markets, having been responsible for more than 150 vessel acquisitions and dispositions.

Extensive relationships with customers, lenders, shipyards and other shipping industry participants

Through Mr. Pappas and our senior management team, we have strong global relationships with shipping companies, charterers, shipyards, brokers and commercial shipping lenders. Our senior management team has a long track record in the voyage chartering of dry bulk ships, which we expect will be of great benefit to us in increasing the profitability of our fleet. The chartering team has long experience in the business of arranging voyage and short-term time charters and can leverage its extensive industry relationships to arrange for favorable and profitable charters. We believe that these relationships with these counterparties and our strong sale and purchase track record and reputation as a creditworthy counterparty should provide us with access to attractive asset acquisitions, chartering and ship financing opportunities. Mr. Pappas has also leveraged his deep relationships with various shipyards to enable us to implement our newbuilding program with vessels of high specification.

OUR BUSINESS STRATEGIES

Our primary objectives are to grow our business profitably and to continue to grow as a successful owner and operator of dry bulk vessels. The key elements of our strategy are:

Preserve liquidity during the current dry bulk market downturn through efficient operations

The BDI declined 35% during 2015 and reached its all-time low of 290 in February 2016. The dry bulk market has since rebounded from its all-time lows, reaching a new high of 1,588 in October 2017. In this environment, we have taken all necessary actions to preserve our liquidity through vessel sales during late 2015 and 2016, renegotiation of price and delivery dates with the shipyards for our newbuilding fleet, restructuring our indebtedness, as well as optimization of vessel operations to reduce voyage and operating costs. Our management is focused on making us a leading operator in terms of cost without sacrificing the quality of our operations. Reflecting the continued quality of our vessels, as of October 2017, we are considered as a top quality service provider and were assigned the third position among 70 shipowners by Rightship, a ratings agency that evaluates the condition of dry bulk vessels.

Capitalize on potential increases in charterhire rates for dry bulk shipping

The dry bulk shipping industry is cyclical in nature. The recent historically low dry bulk charterhire rates act as a catalyst for ship owners, who scrap a significant number of vessels, until equilibrium between demand and supply of vessels is achieved. Based on our analysis of industry dynamics, we believe that dry bulk charterhire rates will rise for the medium term due to drastic supply cuts that we expect will result from owners’ actions in the short term. The supply of dry bulk carriers is dependent on the delivery of new vessels and the removal of vessels from the global fleet, either through scrapping or loss. As of the beginning of October, 2017, the global dry bulk carrier order book amounted to approximately 7.9% of the existing fleet at that time. The level of scrapping activity is generally a function of scrapping prices in relation to current and prospective charter market conditions, as well as

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operating, repair and survey costs. Generally, dry bulk carriers at or over 25 years old are likely candidates to be scrapped; however due to the deteriorating freight environment prior to this year we have seen younger vessels sent to the scrapyards. During 2016, a total of 29.1 million dwt was scrapped, representing the third highest level in the history of the dry bulk industry. Up until the beginning of September 2017, we observed a slow-down in the demolition rate, with 12.1 million dwt being scrapped since the beginning of January 2017, as compared with the same period in the preceding year, in which 25.51 million dwt had been scrapped. Historically, from 2006 to 2016, vessel annual demolition rates ranged from 0.5 million dwt to 33.4 million dwt. We have also observed the conversion of a number of newbuilding dry bulk vessels to tanker and container vessels, which we consider has the positive consequence of reducing dry bulk vessel deliveries and hence supply. We expect that the relatively weak freight rate environment will continue to dissuade ship owners from ordering further dry bulk vessels. By reducing vessel supply, we believe that the above three factors will have a positive effect on freight rates in the future. While the charter market remains at current levels, we intend to operate our vessels in the spot market under short-term time charter market or voyage charters in order to benefit from any future increases in charter rates.

Charter our vessels in an active and sophisticated manner

Our business strategy is centered on arranging voyage and short-term time charters for our vessels given the current relatively low market levels. This approach is also tailored specifically to the fuel efficiency of our newbuilding and newly delivered vessels. While this process is more difficult and labor intensive than placing our vessels on longer-term time charters, it can lead to greater profitability, particularly for vessels that have lower fuel consumption than typical vessels. When operating a vessel on a voyage charter, we (as owner of the vessel) will incur fuel costs, and therefore, we are in a position to benefit from fuel savings (particularly for our Eco-type vessels). If charter market levels rise, we may employ part of our fleet in the long-term time charter market, while we may be able to more advantageously employ our newbuilding and newly delivered vessels in the voyage charter market in order to capture the benefit of available fuel cost savings. Our large, diverse and high quality fleet provides scale to major charterers, such as iron ore miners, utility companies and commodity trading houses. On December 17, 2014, we announced the formation of a long-term strategic partnership with a significant iron ore mining company for the chartering of three Newcastlemax vessels, under an index-linked voyage charter for a five-year period. This arrangement will allow us to take the full benefit of the vessels’ increased cargo carrying capacity as well as potential savings arising from their fuel efficiency, as we will be compensated on a $/ton basis, while being responsible for the voyage expenses of the vessels. We seek similar arrangements with other charterers, providing the scale required for the transportation of large commodity volumes over a multitude of trading routes around the world.

On January 25, 2016, we entered into a Capesize vessel pooling agreement (“CCL”) with BOCIMAR INTERNATIONAL NV, GOLDEN OCEAN GROUP LIMITED and C TRANSPORT HOLDING LTD. During 2017, we operated up to seven of our Capesize dry bulk vessels, which had previously been operating in the spot market, as part of one combined CCL fleet. Together with our vessels, the CCL fleet consists of approximately 60 modern Capesize vessels and is managed out of Singapore and Antwerp. Each vessel owner continues to be responsible for the operating, accounting and technical management of its respective vessels. We expect to achieve improved scheduling ability through the joint marketing opportunity that CCL represents for our Capesize vessels, with the overall aim of enhancing economic efficiencies.

On October 30, 2017 we announced the formation of Star Logistics, which will focus on servicing the end user by connecting origination and destination of dry bulk commodities. The move is expected to further expand our commercial capability through additional commercial expertise and advanced tools on the Kamsarmax and geared bulk carriers (Ultramax and Supramax). Moreover, it will provide us with access to considerable cargo flow and market information as it is staffed by an experienced team of shipping logistics professionals and will be based in Geneva, Switzerland, offering us a significant presence in a main center of the dry bulk commodities arena.

Expand and renew our fleet through opportunistic acquisitions of high-quality vessels at attractive prices

As of September 15, 2017, we had contracts for three additional newbuilding vessels with an aggregate capacity of approximately 0.6 million dwt. If market conditions improve, we may opportunistically acquire high-quality vessels at attractive prices that are accretive to our cash flow. We also look to opportunistically renew our fleet by replacing older vessels that have high maintenance and survey costs with newer vessels that have lower operating costs, fewer maintenance and survey requirements, lower fuel consumption and overall enhanced commercial attractiveness to our charterers. When evaluating acquisitions, we will consider and analyze, among other things, our expectations of fundamental developments in the dry bulk shipping industry sector, the level of liquidity in the resale

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and charter market, the cash flow earned by the vessel in relation to its value, its condition and technical specifications with particular regard to fuel consumption, expected remaining useful life, the credit quality of the charterer and duration and terms of charter contracts for vessels acquired with charters attached, as well as the overall diversification of our fleet and customers. We believe that these circumstances combined with our management’s knowledge of the shipping industry may present an opportunity for us to grow our fleet at favorable prices.

Maintain a strong balance sheet through moderate use of leverage

We plan to finance our fleet, including future vessel acquisitions, with a mix of debt (subject to certain restrictions in our debt agreements) and equity, and we intend to maintain moderate levels of leverage over time, even though we may have the capacity to obtain additional financing. As of June 30, 2017, our debt to total capitalization ratio was approximately 50%. Charterers have increasingly favored financially solid vessel owners, and we believe that our balance sheet strength will enable us to access more favorable chartering opportunities, as well as give us a competitive advantage in pursuing vessel acquisitions from commercial banks and shipyards, which in our experience have recently displayed a preference for contracting with well-capitalized counterparties.

OAKTREE

Oaktree is our largest shareholder. Oaktree Capital Management, L.P., together with its affiliates, is a leader among global investment managers specializing in alternative investments, with $100 billion in assets under management as of September 30, 2017. The firm emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in distressed debt, corporate debt (including high yield debt and senior loans), control investing, convertible securities, real estate and listed equities. Headquartered in Los Angeles, the firm has over 900 employees and offices in 18 cities worldwide.

CORPORATE AND OTHER INFORMATION

We are a Marshall Islands corporation with principal executive offices at 40 Agiou Konstantinou Street, 15124, Athens Greece. Our telephone number at that address is 011-30-210-617-8400. We maintain a website on the Internet at http://www.starbulk.com. The information on our website is not incorporated by reference into this prospectus and does not constitute a part of this prospectus. We were incorporated in the Marshall Islands on December 13, 2006, as a wholly-owned subsidiary of Star Maritime Acquisition Corp., or Star Maritime, which was a special purpose acquisition corporation. We merged with Star Maritime on November 30, 2007 and commenced operations on December 3, 2007, which was the date we took delivery of our first vessel.

RECENT DEVELOPMENTS

On October 30, 2017, we announced the formation of Star Logistics. As described above, Star Logistics will focus on servicing the end user by connecting origination and destination of dry bulk commodities. The move is expected to further expand our commercial capability through additional commercial expertise and advanced tools on the Kamsarmax and geared bulk carriers (Ultramax and Supramax). Moreover, it will provide us with access to considerable cargo flow and market information.

In June 2017, we entered into a definitive agreement with ABN AMRO N.V., for a financing of an aggregate amount of $30.8 million. The facility consists of two tranches. The first tranche of $16.0 million was used to partially finance the acquisition cost of the new Kamsarmax vessels, Star Charis and Star Suzanna. The second tranche of $14.8 million was used to prepay in full all outstanding amounts under the Heron Vessels Facility (as defined in the 2016 20-F), which was terminated. The second tranche is secured by the vessels Star Angelina and Star Gwyneth, which secured the Heron Vessels Facility.

In July 2017, following the refinancing of the Heron Vessels Facility and the execution of Supplemental Agreements with all Lenders under our other Senior Secured Credit Facilities, we completed the Restructuring Transactions in their entirety (all capitalized terms referred to in this paragraph are defined in the 2016 20-F).

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THE OFFERING

The summary below describes the principal terms of the Notes, and is qualified in its entirety by the terms of the indenture governing the Notes. Certain of the terms and conditions described below are subject to important limitations and exceptions. See “Description of Notes” for a more detailed description of the terms and conditions of the Notes.

Issuer
Star Bulk Carriers Corp.
Securities Offered
$50,000,000 aggregate principal amount of our 8.30% Senior Notes due 2022 issued in minimum denominations of $25.00 and integral multiples of $25.00 in excess thereof.
Issue Date
November 9, 2017.
Maturity Date
The Notes will mature on November 15, 2022.
Interest
The Notes will bear interest from the date of original issue until maturity at a rate of 8.30% per year, payable quarterly in arrears on February 15, May 15, August 15 and November 15 commencing on February 15, 2018.
Use of proceeds
We intend to use the proceeds from our sale of Notes in this offering to redeem in full our 8.00% Senior Notes due 2019, which mature in November 2019. We expect to use cash on hand to pay any related fees and expenses. See “Use of Proceeds.”
Ranking
The Notes will be our senior unsecured obligations and will rank equally in right of payment with all of our existing and future senior unsecured and unsubordinated debt. The Notes will not be guaranteed by any of our subsidiaries. The Notes will be effectively subordinated to our existing and future secured debt, to the extent of the value of the assets securing such debt, and will be structurally subordinated to all existing and future debt and other liabilities of our subsidiaries.
Optional Redemption
We may redeem the notes in whole or in part on and after May 15, 2019, at a redemption price equal to 100% of the principal amount to be redeemed, plus accrued and unpaid interest to, but excluding, the date fixed for redemption.

Prior to May 15, 2019 we may redeem the notes, in whole or in part, at a redemption price equal to 100% of the principal amount plus a make-whole premium and accrued and unpaid interest to the date of redemption.

See “Description of Notes—Optional Redemption” and “Description of Notes–Notice of Redemption.”

No Security or Guarantees
None of our obligations under the Notes will be secured by collateral or guaranteed by any of our subsidiaries, affiliates or any other persons.
Change of Control
Upon the occurrence of certain change of control events (as defined in the indenture governing the Notes), you will have the right, as a holder of the Notes, to require us to repurchase some or all of the Notes at 101% of the principal amount, plus accrued and unpaid interest to, but

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excluding, the repurchase date. For additional information, please read “Description of Notes—Change of Control Permits Holders to Require us to Purchase Notes.”

Covenants
The indenture governing the Notes contains certain restrictive covenants, including covenants that require us to limit the amount of debt we incur, maintain a certain minimum net worth, and provide certain reports. These covenants are subject to important exceptions and qualifications. For additional information, please read “Description of Notes.”
Additional Notes
We may “reopen” the Notes at any time without the consent of the holders of the Notes and issue additional notes with the same terms as the Notes (except the issue price, issue date and initial interest payment date), which will thereafter constitute a single fungible series with the Notes, provided that if the additional notes are not fungible with the Notes for U.S. federal income tax purposes, such additional notes will have a separate CUSIP number.
Listing
We will apply for the listing of the Notes on the NASDAQ under the symbol “SBLKM”. If approved for listing, trading on NASDAQ is expected to commence within 30 days after the Notes are first issued.
Form
The Notes will be represented by one or more permanent global notes, which will be deposited with the trustee as custodian for The Depository Trust Company, or DTC, and registered in the name of a nominee designated by DTC. Holders of Notes may elect to hold interests in a global Note only in the manner described in this prospectus. Any such interest may not be exchanged for certificated securities except in limited circumstances described in this prospectus. For additional information, please read “Book-Entry System” in this prospectus.
Additional Amounts; Tax Redemption
Any payments made by us with respect to the Notes will be made without withholding or deduction for or on account of taxes unless required by law. If we are required by law to withhold or deduct amounts for or on account of tax imposed by a Specified Tax Jurisdiction (as defined in this prospectus), we will, subject to certain exceptions, pay the additional amounts necessary so that the net amount received by the holders of the Notes after the withholding or deduction is not less than the amount that they would have received in the absence of the withholding or deduction. See “Description of Notes—Additional Amounts.”

We may also, at our option, redeem the Notes, in whole but not in part, at any time at 100% of the principal amount of the Notes plus accrued and unpaid interest and Additional Amounts (as defined in this prospectus), if any, to the date of redemption in the event of certain changes in the law of any Specified Tax Jurisdiction (as

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defined in this prospectus) that would require us to pay Additional Amounts to holders of the Notes, and which obligation cannot be avoided by taking reasonable measures available to us. See “Description of Notes—Optional Redemption for Changes in Withholding Taxes” and “—Additional Amounts.”

Settlement
We expect to deliver the Notes against payment therefor on or about the date specified on the cover page of this prospectus, which will be the fifth business day following the date of the pricing of the Notes. Under Rule 15c6-1 under the Exchange Act, trades in the secondary market generally are required to settle within two business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade Notes prior to the second day before settlement will be required, by virtue of the fact that the Notes initially will settle T+5, to specify an alternative settlement arrangement to prevent a failed settlement. Purchasers of Notes who wish to trade Notes prior to the second day before settlement are urged to consult their own advisor.
Risk Factors
An investment in the Notes involves risks. See the section titled “Risk Factors” of this prospectus to read about factors you should consider before buying the Notes. You should also consider the risk factors described in the documents incorporated by reference in this prospectus.

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Summary Historical Financial and Operating Information

Set forth below are the summary historical consolidated financial and other data of Star Bulk and its consolidated subsidiaries for the periods and as of the dates indicated.

The summary historical consolidated financial data as of and for the years ended December 31, 2014, 2015 and 2016 have been derived from our consolidated financial statements as of such dates and for such years, which have been audited by Ernst & Young (Hellas) Certified Auditors Accountants S.A., as indicated in the 2016 20-F.

The summary historical consolidated financial data as of and for the six months ended June 30, 2017 and 2016 have been derived from our consolidated financial statements as of such dates and for such periods included in our unaudited interim condensed consolidated financial statements for the six months ended June 30, 2017 (contained in Exhibit 99.1 to the Q2 2017 6-K), which are unaudited but which have been prepared on the same basis as our audited consolidated financial statements and, in the opinion of our management, reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the information set forth therein.

The summary historical consolidated financial data below should be read in conjunction with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our consolidated financial statements and related notes included in the 2016 20-F, as well as the “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our consolidated financial statements and related notes included in Exhibit 99.1 to the Q2 2017 6-K.

 
Year ended December 31,
Six months ended
 
2014(1)
2015
2016
June 30,
2016
June 30,
2017
Income Statement Data (In thousands of U.S. Dollars, except per share and share data):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Voyage revenues
$
145,041
 
$
234,035
 
$
221,987
 
$
98,862
 
$
143,471
 
Management fee income
 
2,346
 
 
251
 
 
119
 
 
91
 
 
 
 
 
147,387
 
 
234,286
 
 
222,106
 
 
98,953
 
 
143,471
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Voyage expenses
 
42,341
 
 
72,877
 
 
65,821
 
 
37,284
 
 
31,649
 
Charter-in hire expenses
 
 
 
1,025
 
 
3,550
 
 
1,918
 
 
1,736
 
Vessel operating expenses
 
53,096
 
 
112,796
 
 
98,830
 
 
49,364
 
 
49,560
 
Dry docking expenses
 
5,363
 
 
14,950
 
 
6,023
 
 
1,583
 
 
3,248
 
Depreciation
 
37,150
 
 
82,070
 
 
81,935
 
 
40,847
 
 
40,387
 
Management fees
 
158
 
 
8,436
 
 
7,604
 
 
3,911
 
 
3,689
 
General and administrative expenses
 
32,723
 
 
23,621
 
 
24,602
 
 
13,298
 
 
17,316
 
Bad debt expense
 
215
 
 
 
 
 
 
 
 
 
(Gain)/loss on forward freight agreements
 
 
 
 
 
(411
)
 
(283
)
 
541
 
Impairment loss
 
 
 
321,978
 
 
29,221
 
 
6,694
 
 
 
Loss on time charter agreement termination
 
 
 
2,114
 
 
 
 
 
 
 
Other operational loss
 
94
 
 
 
 
503
 
 
109
 
 
751
 
Other operational gain
 
(10,003
)
 
(592
)
 
(1,565
)
 
(50
)
 
(2,461
)
Loss on sale of vessels
 
 
 
20,585
 
 
15,248
 
 
21
 
 
370
 
Gain from bargain purchase
 
(12,318
)
 
 
 
 
 
 
 
 
 
 
148,819
 
 
659,860
 
 
331,361
 
 
154,696
 
 
146,786
 
Operating income/(loss)
 
(1,432
)
 
(425,574
)
 
(109,255
)
 
(55,743
)
 
(3,315
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and finance costs
 
(9,575
)
 
(29,661
)
 
(41,217
)
 
(19,694
)
 
(23,766
)
Interest and other income
 
629
 
 
1,090
 
 
876
 
 
154
 
 
1,223
 
Gain/(Loss) on derivative financial instruments, net
 
(799
)
 
(3,268
)
 
(2,116
)
 
(4,681
)
 
100
 
Loss on debt extinguishment
 
(652
)
 
(974
)
 
(2,375
)
 
(1,801
)
 
(358
)
Total other expenses, net
 
(10,397
)
 
(32,813
)
 
(44,832
)
 
(26,022
)
 
(22,801
)
Income/(loss) before equity in income of investee
 
(11,829
)
 
(458,387
)
 
(154,087
)
 
(81,765
)
 
(26,116
)

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Year ended December 31,
Six months ended
 
2014(1)
2015
2016
June 30,
2016
June 30,
2017
Equity in income of investee
 
106
 
 
210
 
 
126
 
 
69
 
 
4
 
Income/(loss) before taxes
 
(11,723
)
 
(458,177
)
 
(153,961
)
 
(81,696
)
 
(26,112
)
US source income taxes
 
 
 
 
 
(267
)
 
 
 
(117
)
Net income/(loss)
$
(11,723
)
$
(458,177
)
$
(154,228
)
$
(81,696
)
$
(26,229
)
Earnings/(loss) per share, basic
$
(1.00
)
$
(11.71
)
$
(3.24
)
$
(1.86
)
$
(0.42
)
Earnings/(loss) per share, diluted
$
(1.00
)
$
(11.71
)
$
(3.24
)
$
(1.86
)
$
(0.42
)
Weighted average number of shares outstanding, basic
 
11,688,239
 
 
39,124,673
 
 
47,574,454
 
 
43,880,713
 
 
62,188,645
 
Weighted average number of shares outstanding, diluted
 
11,688,239
 
 
39,124,673
 
 
47,574,454
 
 
43,880,713
 
 
62,188,645
 
Other Financial Data (In thousands of U.S. Dollars):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities
$
12,819
 
$
(14,578
)
$
(33,448
)
$
(35,972
)
$
20,336
 
Net cash provided by/(used in) investing activities
$
(437,075
)
$
(397,533
)
$
(13,216
)
$
(24,568
)
$
(115,775
)
Net cash provided by/(used in) financing activities
$
456,708
 
$
534,167
 
$
20,366
 
$
(6,961
)
$
140,563
 
Fleet Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average number of vessels(2)
 
28.88
 
 
69.06
 
 
69.77
 
 
70.90
 
 
68.40
 
Total ownership days for fleet(3)
 
10,541
 
 
25,206
 
 
25,534
 
 
12,896
 
 
12,384
 
Total available days for fleet(4)
 
10,413
 
 
24,204
 
 
24,989
 
 
12,438
 
 
12,456
 
Fleet Utilization(5)
 
99
%
 
96
%
 
97
%
 
95
%
 
99
%
Average daily results (In U.S. Dollars):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Time charter equivalent(6)
 
10,450
 
 
7,052
 
 
6,260
 
 
4,971
 
 
8,977
 
Vessel operating expenses(7)
 
5,037
 
 
4,475
 
 
3,871
 
 
3,828
 
 
4,002
 
Balance Sheet Data at period end (In thousands of U.S. Dollars):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
86,000
 
$
208,056
 
$
181,758
 
$
140,555
 
$
226,882
 
Advances for vessels under construction and vessel acquisition
 
454,612
 
 
127,910
 
 
64,570
 
 
55,892
 
 
46,472
 
Vessels and other fixed assets, net
 
1,441,851
 
 
1,757,552
 
 
1,707,209
 
 
1,802,507
 
 
1,796,943
 
Total assets
 
2,054,055
 
 
2,148,846
 
 
2,011,702
 
 
2,063,240
 
 
2,136,491
 
Current portion of long-term debt and short-term lease commitments
 
140,198
 
 
131,631
 
 
6,235
 
 
9,137
 
 
16,652
 
Total long-term debt, including long term lease commitments, excluding current portion, net of deferred finance fees
 
709,389
 
 
795,267
 
 
896,332
 
 
915,193
 
 
977,614
 
8.00% Senior Notes due 2019, net of unamortized deferred finance fees
 
47,890
 
 
48,323
 
 
48,757
 
 
48,539
 
 
48,972
 
Common Stock
 
218
 
 
438
 
 
566
 
 
440
 
 
634
 
Total Stockholders’ equity
 
1,154,302
 
 
1,135,358
 
 
1,037,230
 
 
1,055,684
 
 
1,068,350
 
Total liabilities and stockholders’ equity
$
2,054,055
 
$
2,148,846
 
$
2,011,702
 
$
2,063,240
 
$
2,136,491
 
(1) On July 11, 2014, pursuant to an Agreement and Plan of Merger (as amended from time to time, the “Merger Agreement”), dated as of June 16, 2014, we acquired Oceanbulk Shipping LLC and Oceanbulk Carriers LLC (together, “Oceanbulk”) from affiliates of Oaktree and the family members of Mr. Pappas (the “Sellers”). Oceanbulk owned and operated a fleet of 12 dry bulk carrier vessels and owned contracts for the construction of 25 newbuilding dry bulk fuel-efficient Eco-type vessels at shipyards in Japan and China. The consideration paid by us in the Merger to the Sellers was 9,679,153 common shares, adjusted for the June 2016 Reverse Stock Split. The Merger Agreement also provided for the acquisition (the “Heron Transaction”) by us of two Kamsarmax vessels (the “Heron Vessels”), from Heron Ventures Ltd. (“Heron”). We issued 423,141 common shares, adjusted for the June 2016 Reverse Stock Split, as consideration for the Heron Vessels. Concurrently with the transactions under the Merger Agreement, we completed a transaction (the “Pappas Transaction”), in which we acquired entities owned and controlled by affiliates of the family of Mr. Pappas that owned and operated a

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dry bulk carrier vessel and had a contract for the construction of a newbuilding dry bulk carrier vessel, which was delivered to us in January 2015. The consideration paid by us in the Pappas Transaction was 718,546 common shares, adjusted for the June 2016 Reverse Stock Split. We refer to the foregoing transactions as the “July 2014 Transactions”.

(2) Average number of vessels is the number of vessels that constituted our operating fleet for the relevant period, as measured by the sum of the number of days each operating vessel was a part of our operating fleet during the period divided by the number of calendar days in that period.
(3) Ownership days are the total number of calendar days each vessel in the fleet was owned by us for the relevant period.
(4) Available days for the fleet are the ownership and charter-in days (which were nil for 2014, 107 days in 2015, 366 days in 2016, 182 days and 181 days in the six-month periods ended June 30, 2016 and 2017, respectively) after subtracting off-hire days for major repairs, dry docking or special or intermediate surveys and lay-up days, if any.
(5) Fleet utilization is calculated by dividing available days by ownership days plus charter-in days for the relevant period, (which were nil for 2014, 107 days in 2015, 366 days in 2016 182 days and 181 days in the six-month periods ended June 30, 2016 and 2017, respectively). Please see below in footnote 6 regarding the revised method of our calculation of fleet utilization and its application retrospectively for all periods presented herein.
(6) Time charter equivalent rate (the “TCE rate”) represents the weighted average daily TCE rates of our entire fleet. TCE rate is a measure of the average daily revenue performance of a vessel on a per voyage basis. Starting with the fourth quarter of 2016, we now calculate the TCE rate by dividing voyage revenues (net of voyage expenses and amortization of fair value of above/below market acquired time charter agreements) by available days. We believe the revised method will better reflect the chartering mix of our larger fleet and is more comparable to the method used by our peers. A corresponding change was also applied in the calculation of fleet utilization discussed above. Both changes have been applied retrospectively for all periods presented herein. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by the charterer under a time charter contract, as well as commissions. TCE rate is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company’s performance despite changes in the mix of charter types (i.e., voyage charters, time charters and bareboat charters) under which its vessels may be employed between the periods. We included TCE revenues, a non-GAAP measure, as it provides additional meaningful information in conjunction with voyage revenues, the most directly comparable GAAP measure, and it assists our management in making decisions regarding the deployment and use of our operating vessels and in evaluating our financial performance. Our calculation of TCE rate may not be comparable to that reported by other companies. For further information concerning our calculation of TCE rate and of reconciliation of TCE rate to voyage revenue, please see “Item 5. Operating and Financial Review and Prospects - A. Operating Results” in our 2016 20-F. The following table reflects the calculation of our TCE rates and the reconciliation of the TCE revenue to voyage revenue as reflected in the consolidated statement of operations:
 
Year ended
Six-months ended
(In thousands of U.S. Dollars, except as otherwise stated)
December 31,
2014
December 31,
2015
December 31,
2016
June 30,
2016
June 30,
2017
Voyage revenues
$
145,041
 
$
234,035
 
 
221,987
 
$
98,862
 
$
143,471
 
Less:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Voyage expenses
 
(42,341
)
 
(72,877
)
 
(65,821
)
 
(37,284
)
 
(31,649
)
Plus:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of fair value of below/above market acquired time charter agreements
 
6,113
 
 
9,540
 
 
254
 
 
254
 
 
 
Time charter equivalent revenues
$
108,813
 
$
170,698
 
$
156,420
 
$
61,832
 
$
111,822
 
Fleet available days
 
10,413
 
 
24,204
 
 
24,989
 
 
12,438
 
 
12,456
 
Daily time charter equivalent (TCE) rate (in U.S. Dollars)
$
10,450
 
$
7,052
 
$
6,260
 
$
4,971
 
$
8,977
 
(7) Average daily operating expenses per vessel are calculated by dividing vessel operating expenses by ownership days.

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RISK FACTORS

An investment in the Notes involves risks. Before deciding whether to purchase the Notes, you should consider the risks discussed in the accompanying prospectus, including the sections of the accompanying prospectus titled “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors,” and those set forth under the heading “Item 3. Key Information—D. Risk Factors” in the 2016 20-F, that we have incorporated by reference into this prospectus. While we believe that these risks are the most important for you to consider, you should read this section in conjunction with our financial statements, the notes to those financial statements and our management’s discussion and analysis of financial condition and results of operations included in our periodic reports and incorporated into this prospectus by reference.

Risks of Investing in the Notes and Risks Related to our Other Indebtedness

Your investment in the Notes is subject to our credit risk.

The Notes are unsubordinated unsecured general obligations of ours and are not, either directly or indirectly, an obligation of any third party. The Notes will rank equally with all of our other unsecured and unsubordinated debt obligations, except as such obligations may be preferred by operation of law. Any payment to be made on the Notes, including the return of the principal amount at maturity or any redemption date, as applicable, depends on our ability to satisfy our obligations as they come due. As a result, our actual and perceived creditworthiness may affect the market value of the Notes and, in the event we were to default on our obligations, you may not receive the amounts owed to you under the terms of the Notes.

Our significant indebtedness could significantly limit our ability to execute our business strategy and has increased the risk of default under our debt obligations.

As of September 15, 2017, we had $1,037.7 million of outstanding indebtedness (including capital lease commitments on an As Adjusted Basis).

Our outstanding debt agreements impose operating and financial restrictions on us. These restrictions limit our ability, or the ability of our subsidiaries party thereto, to:

pay dividends if there is an event of default under our credit facilities or if the amounts we have deferred in our recent debt restructuring transactions have not been repaid in full;
incur additional indebtedness, including the issuance of guarantees, or refinance or prepay any indebtedness, unless certain conditions exist;
create liens on our assets, unless otherwise permitted under our credit facilities;
change the flag, class or management of our vessels or terminate or materially amend the management agreement relating to each vessel;
acquire new or sell vessels, unless certain conditions exist;
merge or consolidate with, or transfer all or substantially all our assets to, another person; or
enter into a new line of business.

In addition, our credit facilities and other financing arrangements require us or our subsidiaries to maintain various financial ratios, including:

a minimum percentage of aggregate vessel value to secured loans (security cover ratio or “SCR”);
a maximum ratio of total liabilities to market value adjusted total assets;
a minimum EBITDA to interest coverage ratio;
a minimum liquidity; and
a minimum market value adjusted net worth.

Although compliance with our covenants temporarily has been substantially relaxed or waived pursuant to a global restructuring plan between us and our lenders, because some of these ratios are dependent on the market value of our vessels, should our charter rates or vessel values materially decline in the future, we may be required to take

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action to reduce our debt or to act in a manner contrary to our business objectives to meet any such financial ratios and satisfy any such financial covenants. Events beyond our control, including changes in the economic and business conditions in the shipping markets in which we operate, may affect our ability to comply with these covenants. We cannot assure you that we will meet these ratios or satisfy our financial or other covenants, or that our lenders will waive any failure to do so.

These covenants and restrictions may adversely affect our ability to finance future operations or limit our ability to pursue certain business opportunities or take certain corporate actions. The covenants may also restrict our flexibility in planning for changes in our business and the industry and make us more vulnerable to economic downturns and adverse developments. A breach of any of the covenants in, or our inability to maintain the required financial ratios under, our debt agreements could result in a default under our debt agreements. If a default occurs under our credit facilities, the lenders could elect to declare the outstanding debt, together with accrued interest and other fees, to be immediately due and payable and foreclose on the collateral securing that debt, which could constitute all or substantially all of our assets.

Our ability to meet our cash requirements, including our debt service obligations, is dependent upon our operating performance, which is subject to general economic and competitive conditions and to financial, business and other factors affecting our operations, many of which are or may be beyond our control. We cannot provide assurance that our business operations will generate sufficient cash flows from operations to fund these cash requirements and debt service obligations. If our operating results, cash flow or capital resources prove inadequate, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt and other obligations. If we are unable to service our debt, we could be forced to reduce or delay planned expansions and capital expenditures, sell assets, further restructure or refinance our debt or seek additional equity capital, and we may be unable to take any of these actions on satisfactory terms or in a timely manner. Further, any of these actions may not be sufficient to allow us to service our debt obligations or may have an adverse impact on our business. Our debt agreements may limit our ability to take certain of these actions. Our failure to generate sufficient operating cash flow to pay our debts or to successfully undertake any of these actions could have a material adverse effect on us.

Our substantial indebtedness and the restrictions included in our debt agreements could materially and adversely affect our ability to obtain additional financing for working capital, capital expenditures, acquisitions, debt service requirements or other purposes, could make us more vulnerable to general adverse economic, regulatory and industry conditions, and could limit our flexibility in planning for, or reacting to, changes and opportunities in the markets in which we compete.

Servicing our current or future indebtedness and other financing arrangements limits funds available for other purposes and if we cannot service our debt, we may lose our vessels.

Our existing and future indebtedness and other financing arrangements require us to dedicate a part of our cash flow from operations to paying interest on our indebtedness under such facilities. These payments limit funds available for working capital, capital expenditures and other purposes, including further equity or debt financing in the future. Amounts borrowed under our credit facilities and other financing arrangements bear interest at variable rates. Increases in prevailing rates could increase the amounts that we would have to pay to our lenders, even though the outstanding principal amount remains the same, and our net income and cash flows would decrease. We expect our earnings and cash flow to vary from year to year due to the cyclical nature of the dry bulk industry. If we do not generate or reserve enough cash flow from operations to satisfy our debt obligations, we may have to undertake alternative financing plans to the extent permitted by our credit agreements, such as:

seeking to raise additional capital;
refinancing or restructuring our debt;
selling vessels; or
reducing or delaying capital investments.

However, these alternative financing plans, if necessary, may not be sufficient to allow us to meet our debt obligations. If we are unable to meet our debt obligations or if some other default occurs under our credit facilities or other financing arrangements, our lenders could elect to declare that debt, together with accrued interest and fees, to be immediately due and payable and proceed against the collateral vessels securing that debt.

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We may not be able to refinance indebtedness incurred under our loan and credit facilities if we are not able to meet our debt service requirements relating to such indebtedness, or we may be unable to borrow under our existing or future debt agreements, which may adversely affect our business, financial condition, results of operations and cash flows.

As discussed above, we have currently and expect to have in the future, a substantial amount of outstanding indebtedness. We may not be able to refinance our indebtedness on terms that are acceptable to us or at all. For so long as we have outstanding indebtedness under our credit facilities and debt securities, we will have to dedicate a portion of our cash flow from operations to pay the principal and interest of this indebtedness. We may not be able to generate cash flow in amounts that are sufficient for these purposes. If we are not able to satisfy these obligations, we may have to undertake alternative financing plans or sell our assets. The actual or perceived credit quality of our charterers, any defaults by them, and the market value of our fleet, among other things, may materially affect our ability to obtain alternative financing. In addition, debt service payments under our loan and credit facilities or alternative financing may limit funds otherwise available for working capital, capital expenditures and other purposes. If we are unable to meet our debt obligations, our lenders could declare the debt, together with accrued interest and fees, to be immediately due and payable and foreclose on our fleet, which could result in the acceleration of other indebtedness that we may have at such time and the commencement of similar foreclosure proceedings by other lenders. In addition, if the recent financial difficulties experienced by financial institutions worldwide lead to such institutions being unable to meet their lending commitments, that inability could have a material adverse effect on our ability to meet our obligations and grow our fleet. If we are not able to borrow under our existing or future debt agreements and are unable to find alternative sources of financing on terms that are acceptable to us or at all, our business, financial condition, results of operations and cash flows may be materially adversely affected.

Our subsidiaries conduct the substantial majority of our operations and own our operating assets, and your right to receive payments on the Notes is structurally subordinated to the debt obligations of our subsidiaries.

Our subsidiaries conduct the substantial majority of our operations and own our operating assets. As a result, our ability to make required payments on the Notes depends in part on the operations of our subsidiaries and our subsidiaries’ ability to distribute funds to us. To the extent our subsidiaries are unable to distribute, or are restricted from distributing, funds to us, we may be unable to fulfill our obligations under the Notes. Our subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay amounts due on the Notes or to make funds available for that purpose. The Notes will not be guaranteed by any of our subsidiaries or any other person. The rights of holders of the Notes will be structurally subordinated to the rights of holders of our subsidiaries’ liabilities and preferred equity. A default by a subsidiary under its liabilities or preferred equity could result in a block on distributions from the affected subsidiary to us. The Notes will be structurally subordinated to all existing and future liabilities and preferred equity of our subsidiaries. In the event of a bankruptcy, liquidation or reorganization of any of our subsidiaries, holders of liabilities and preferred equity of our subsidiaries will generally be entitled to payment of their claims from the assets of those subsidiaries before any assets are made available for distribution to us. As of September 15, 2017, on an As Adjusted Basis, we had a total of $1,037.7 million of outstanding indebtedness (all of which was secured by the assets of our subsidiaries). Our $40.0 million of committed indebtedness will be secured and will be incurred or guaranteed by our subsidiaries, as will the up to $60.0 million of debt financing we expect to incur to complete our newbuilding program. In addition, the indenture under which the Notes will be issued will permit our subsidiaries to incur additional debt in certain circumstances.

The Notes will be unsecured obligations and will be effectively subordinated to our secured debt.

The Notes are unsecured and therefore will be effectively subordinated to any secured debt we maintain or may incur to the extent of the value of the assets securing the debt. In the event of a bankruptcy or similar proceeding involving us, the assets that serve as collateral will be available to satisfy the obligations under any secured debt before any payments are made on the Notes. As of September 15, 2017, on an As Adjusted Basis, we had $1,037.7 million of total outstanding indebtedness all of which was secured debt. Our $40.0 million of committed indebtedness will be secured, as will the up to $60.0 million of debt financing we expect to incur to complete our newbuilding program. We will continue to have the ability to incur additional secured debt, subject to limitations in our credit facilities and the indenture relating to the Notes.

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The occurrence of a default under the financial covenants contained in the indenture governing the notes offered hereby depends of the occurrence of a default under the Subject Vessel Financing Facilities (as defined herein).

The indenture governing the notes offered hereby will provide that for so long as any Subject Vessel Financing Facility remains outstanding, the financial covenants in the indenture governing the notes offered hereby shall be deemed not to have been breached unless at least one financial covenant in all of the then-outstanding Subject Vessel Financing Facilities has also been breached at such time, without giving effect to any amendments or waivers to such Subject Vessel Financing Facilities after the issue date of the notes offered hereby. Accordingly, for so long as the Subject Vessel Financing Facilities remain in place, a breach of a financial covenant contained in the indenture governing the notes offered hereby will only occur upon on the occurrence of a breach of a financial covenant in all of the Subject Vessel Financing Facilities then-outstanding. You should review the descriptions of the Subject Vessel Financing Agreements included and incorporated by reference in this prospectus supplement before making a decision to invest in the notes. See “Item 5. Operating and Financial Review and Prospects—Senior Secured Credit Facilities” in our Form 20-F incorporated by reference herein and “Description of Notes—Certain Covenants” for a description of the Subject Vessel Financing Agreements and the covenants contained in the indenture governing the notes offered hereby.

As discussed in “Item 5. Operating and Financial Review and Prospects—Senior Secured Credit Facilities” in the 2016 20-F, the Subject Vessel Financing Facilities contain financial covenants, which require the Company to maintain:

A maximum ratio of total liabilities to market value adjusted total assets, which represents total assets as adjusted to reflect market value of our vessels, of 95% until June 30, 2018, 85% from July 1, 2018 until December 31, 2018, 80% from January 1, 2019 to December 31, 2019 and 70% from and after January 1, 2020. This ratio must be maintained at all times and/or is tested quarterly;
A minimum trailing twelve months EBITDA to net interest expense coverage ratio of a range of no restriction to 1.50:1.00 from July 1, 2018 to December 31, 2018, a range of 1:50:1:00 to 2.00:1.00 from January 1, 2019 to January 1, 2020.This ratio must be maintained at all times and/or is tested quarterly;
A minimum liquidity, at all times and/or tested quarterly, of the greater of (a) $35,000,000 and (b) (x) prior to the repayment of the amounts the Company deferred in its debt restructuring, 5.0% of the Company’s financial obligations and (y) thereafter, $500,000 per fleet vessel; and
A minimum market value adjusted net worth, which represents the excess of market value adjusted total assets over total liabilities, of a range of no restriction to $150,000,000 from July 1, 2018 to December 31, 2018, $150,000,000 from January 1, 2019 to December 31, 2019, and a range of $150,000,000 to $300,000,000 from and after January 1, 2020. This ratio must be maintained at all times and/or is tested quarterly.

Because the interest coverage ratio and the adjusted net worth covenants in certain of our Subject Vessel Financing Facilities are not tested until December 31, 2018, a breach with respect to those covenants cannot occur in all of our Subject Vessel Financing Facilities until that time.

Several Subject Vessel Financing Facilities provide that if the Company grants more favorable rights or covenants in favor of another lender, such more favorable rights or covenants shall be provided to the lenders under such Subject Vessel Financing Facility.

As described above, a number of the financial covenants in the Subject Vessel Financing Facility are calculated on the basis of market value of our vessels, as opposed to the book value of our assets that is reflected in the Company’s financial statements. Market values are typically based on third party valuations provided as of the applicable testing date.

We may not have the ability to raise the funds necessary to purchase the Notes as required upon a change of control, and our existing and future debt may contain limitations on our ability to purchase the Notes.

Following a change of control as described under “Description of Notes—Change of Control Permits Holders to Require us to Purchase Notes,” holders of Notes will have the right to require us to purchase their Notes for cash. A change of control may also constitute an event of default or prepayment under, and result in the acceleration of the maturity of, our then existing indebtedness. We may not have sufficient financial resources, and may not be able

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to arrange financing, to pay the change of control purchase price in cash with respect to any Notes surrendered by holders for purchase upon a change of control. In addition, restrictions in our then existing credit facilities or other indebtedness, if any, may not allow us to purchase the Notes upon a change of control. Our failure to purchase the Notes upon a change of control when required would result in an event of default with respect to the Notes which could, in turn, constitute a default under the terms of our other indebtedness, if any. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and purchase the Notes.

In addition, one circumstance in which a change of control may occur is upon the sale of “all or substantially all” of our consolidated assets. There is no precise, established definition of the phrase “substantially all” under applicable law. Accordingly, the ability of a holder of the Notes to require us to purchase its Notes as a result of the conveyance, transfer, sale, lease or other disposition of less than all of our assets may be uncertain.

Some significant restructuring transactions may not constitute a change of control under the Notes indenture, in which case we would not be obligated to offer to purchase the Notes.

Upon the occurrence of a change of control, you have the right to require us to purchase the Notes. However, the change of control provisions will not afford protection to holders of Notes in the event of certain transactions that could adversely affect the Notes. For example, transactions such as leveraged recapitalizations, refinancings or certain restructurings would not constitute a change of control requiring us to repurchase the Notes. In addition, the acquisition of beneficial ownership of a majority of our common shares by certain of our existing significant shareholders and their affiliates will not be a change of control under the Notes indenture. Also, if we are acquired by a public company that is not majority owned by any person, such transaction will not be a change of control under the Notes indenture. In the event of any such transaction, holders of the Notes would not have the right to require us to purchase their Notes, even though each of these transactions could increase the amount of our indebtedness, or otherwise adversely affect our capital structure or any credit ratings, thereby adversely affecting holders of the Notes.

The Notes do not have an established trading market, which may negatively affect their market value and your ability to transfer or sell the Notes.

The Notes are a new issuance of securities with no established trading market. We will apply to list the Notes on the NASDAQ under the symbol “SBLKM,” but NASDAQ may not accept the Notes for listing. Even if the Notes are approved for listing by the NASDAQ, an active trading market on the NASDAQ for the Notes may not develop or, even if it develops, may not last, in which case the trading price of the Notes could be adversely affected and your ability to transfer the Notes will be limited. If an active trading market does develop on the NASDAQ, the Notes may trade at prices lower than the offering price. The trading price of the Notes will depend on many factors, including:

prevailing interest rates;
the market for similar securities;
general economic and financial market conditions;
our issuance of debt or preferred equity securities; and
our financial condition, results of operations and prospects.

We have been advised by the underwriters that they intend to make a market in the Notes pending any listing of the Notes on the NASDAQ, but they are not obligated to do so and may discontinue market-making at any time without notice.

The Notes have not been rated, and ratings of any of our other securities may affect the trading price of the Notes.

We have not sought to obtain a rating for the Notes, and the Notes may never be rated. It is possible, however, that one or more credit rating agencies might independently determine to assign a rating to the Notes or that we may elect to obtain a rating of the Notes in the future. In addition, we may elect to issue other securities for which we may seek to obtain a rating. If any ratings are assigned to the Notes in the future or if we issue other securities with a rating, such ratings, if they are lower than market expectations or are subsequently lowered or withdrawn, or if ratings for such other securities would imply a lower relative value for the Notes, could adversely affect the market for, or the market value of, the Notes. Ratings only reflect the views of the issuing rating agency or agencies and such

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ratings could at any time be revised downward or withdrawn entirely at the discretion of the issuing rating agency. A rating is not a recommendation to purchase, sell or hold any particular security, including the Notes. Ratings do not reflect market prices or suitability of a security for a particular investor and any future rating of the Notes may not reflect all risks related to us and our business, or the structure or market value of the Notes.

The international nature of our operations may make the outcome of any bankruptcy proceedings difficult to predict.

We are incorporated under the laws of the Republic of the Marshall Islands and we conduct operations in countries around the world. Consequently, in the event of any bankruptcy, insolvency, liquidation, dissolution, reorganization or similar proceeding involving us or any of our subsidiaries, bankruptcy laws other than those of the United States could apply. The Republic of the Marshall Islands does not have a well-developed body of corporate law or bankruptcy law and, as a result, our noteholders may have fewer rights and protections under Marshall Islands law than under a typical jurisdiction in the United States. Further, the Republic of the Marshall Islands does not have a well-developed body of bankruptcy law. As such, in the case of our bankruptcy, there may be a delay of bankruptcy proceedings and the ability of creditors to receive recovery after a bankruptcy proceeding. We cannot predict whether Marshall Islands courts would reach the same conclusions as U.S. jurisdictions. If we become a debtor under U.S. bankruptcy law, bankruptcy courts in the United States may seek to assert jurisdiction over all of our assets, wherever located, including property situated in other countries. There can be no assurance, however, that we would become a debtor in the United States, or that a U.S. bankruptcy court would be entitled to, or accept, jurisdiction over such a bankruptcy case, or that courts in other countries that have jurisdiction over us and our operations would recognize a U.S. bankruptcy court’s jurisdiction if any other bankruptcy court would determine it had jurisdiction.

We will be exposed to volatility in the London Interbank Offered Rate, or LIBOR, and intend to selectively enter into derivative contracts, which can result in higher than market interest rates and charges against our income.

The loans under our credit facilities and other financing arrangements are generally advanced at a floating rate based on LIBOR, which has been stable, but was volatile in prior years, which can affect the amount of interest payable on our debt, and which, in turn, could have an adverse effect on our earnings and cash flow. In addition, in recent years, LIBOR has been at relatively low levels, and may rise in the future as the current low interest rate environment comes to an end. Our financial condition could be materially adversely affected at any time that we have not fully hedged our exposure to the interest rates applicable to our credit facilities and other financing arrangements, including those we enter into to finance a portion of the amounts payable with respect to newbuildings. Moreover, even though we intend to hedge our overall exposure to interest rate risk as described below, our hedging strategies may not be effective and we may incur substantial losses.

We intend to selectively enter into derivative contracts to hedge our overall exposure to interest rate risk. Entering into swaps and derivatives transactions is inherently risky and presents various possibilities for incurring significant expenses. The derivatives strategies that we employ in the future may not be successful or effective, and we could, as a result, incur substantial additional interest costs. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Star Bulk, under the caption, “Quantitative and Qualitative Disclosures About Market Risk—Interest Rate Risk” (contained in Exhibit 99.1 to the Q2 2017 6-K) for a description of our interest rate swap arrangements.

Uncertainty relating to the LIBOR calculation process and potential phasing out of LIBOR after 2021 may adversely affect the trading of our other indebtedness.

Regulators and law enforcement agencies in the United Kingdom and elsewhere are conducting civil and criminal investigations into whether the banks that contribute to the British Bankers’ Association (the “BBA”) in connection with the calculation of daily LIBOR may have been under-reporting or otherwise manipulating or attempting to manipulate LIBOR. A number of BBA member banks have entered into settlements with their regulators and law enforcement agencies with respect to this alleged manipulation of LIBOR. Actions by the BBA, regulators or law enforcement agencies may result in changes to the manner in which LIBOR is determined, the phasing out of LIBOR or the establishment of alternative reference rates. For example, on July 27, 2017, the U.K. Financial Conduct Authority announced that it intends to stop persuading or compelling banks to submit LIBOR rates after 2021. Furthermore, in the United States, efforts to identify a set of alternative U.S. dollar reference interest rates include proposals by the Alternative Reference Rates Committee of the Federal Reserve Board and the Federal

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Reserve Bank of New York. It is not possible to predict whether any such changes will occur, whether LIBOR will be phased out or any such alternative reference rates or other reforms to LIBOR will be enacted in the United Kingdom, the United States or elsewhere or the effect that any such changes, phase out, alternative reference rates or other reforms, if they occur, would have on the amount of interest paid on, or the market value of, the Notes and our other indebtedness. Uncertainty as to the nature of such potential changes, phase out, alternative reference rates or other reforms may materially adversely affect the trading market for LIBOR-based securities and other indebtedness. Reform of, or the replacement or phasing out of, LIBOR and proposed regulation of LIBOR and other “benchmarks” may materially adversely affect the market value of and the amount of interest paid on our other indebtedness.

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CAUTIONARY STATEMENTS REGARDING FORWARD LOOKING STATEMENTS

This prospectus includes “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act, with respect to our financial condition, results of operations and business and our expectations or beliefs concerning future events. Words such as, but not limited to, “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “targets,” “projects,” “likely,” “would,” “could” and similar expressions or phrases may identify forward-looking statements.

All forward-looking statements involve risks and uncertainties. The occurrence of the events described, and the achievement of the expected results, depend on many events, some or all of which are not predictable or within our control. Actual results may differ materially from expected results.

In addition, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include:

general dry bulk shipping market conditions, including fluctuations in charterhire rates and vessel values;
the strength of world economies;
the stability of Europe and the Euro;
fluctuations in interest rates and foreign exchange rates;
changes in demand in the dry bulk shipping industry, including the market for our vessels;
changes in our operating expenses, including bunker prices, dry docking and insurance costs;
changes in governmental rules and regulations or actions taken by regulatory authorities;
potential liability from pending or future litigation;
general domestic and international political conditions;
potential disruption of shipping routes due to accidents or political events;
the availability of financing and refinancing;
our ability to meet requirements for additional capital and financing to complete our newbuilding program and grow our business;
the impact of our indebtedness and the restrictions in our debt agreements;