Costamare (CMRE) Lowers Quarterly Dividend 65.5% to $0.10; Enters New Financing Arrangements

October 4, 2016 8:17 AM EDT

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Costamare (NYSE: CMRE) declared a quarterly dividend of $0.10 per share, or $0.4 annualized. This is a 65.5% decrease from the prior dividend of $0.29.

The dividend will be payable on November 4, 2016, to stockholders of record on October 21, 2016, with an ex-dividend date of October 19, 2016.

The annual yield on the dividend is 4.4 percent.

Costamare announced today the following on Tuesday:

(A) New Financing Arrangements

1. In August 2016, we entered into a loan agreement with a leading European financial institution for the financing of the third and fourth 11,000 TEU vessels on order, acquired under our JV with York Capital. The facility is for an amount of up to US $ 87 million which will be repayable over 3 years. The proceeds are expected to finance the remaining yard installments for the two vessels.

2. In August 2016, we finalized the refinancing of two credit facilities secured with the 2006-built vessel Cosco Beijing (9,469 TEUs) and the 2000-built ships Sealand New York and Sealand Washington (6,648 TEUs each). Under the new financing arrangements, balloon installments of US $ 90 million, due in the second and third quarter of 2018, have been extended to be amortized over three years.

3. In September 2016, we finalized the refinancing of our US $ 1 billion facility. Under the new agreement, the balloon payment of approx. US $ 270 million, due in the second quarter of 2018, has been extended to be amortized over three years.

(B) Dividend Adjustment

At its special meeting yesterday, the Company's Board of Directors approved management's recommendation to declare $0.10 cash dividend per each common share, decreased from $0.29 per share distributed in the previous quarter.

The dividend on the common stock of $0.10 per common share will be payable on November 4, 2016 to stockholders of record at the close of trading of the Company's common stock on the New York Stock Exchange on October 21, 2016. The Company has 77,457,448 shares of common stock outstanding as of today.

Management Commentary

Gregory Zikos, Chief Financial Officer of the Company said:

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

Since the beginning of the year, we have completed debt financing transactions of over US $ 760 million. Out of that amount, (a) approx. US $ 400 million involve the extension for 3 years of debt maturing in 2017 and 2018, (b) approx. US $ 175 million relate to the financing of our newbuild program, (c) approx. US $ 150 million relate to the refinancing of existing facilities, and (d) approx. US $ 40 million relate to new financings.

We have no debt maturities in 2017, we have reduced our 2018 balloons from approx. US $440 million to approx. US $80 million and we have minimized our capital expenditure requirements.

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

For a dividend history and other dividend-related data on Costamare (CMRE) click here.

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