Eagle Bulk Shipping Inc. Strengthens Operating Position and Preserves Growth Options for the Future

Reduces Capex by 33%

Preserves 100% of Deposits

Suspends Dividend

NEW YORK, Dec. 19, 2008 (GLOBE NEWSWIRE) -- Eagle Bulk Shipping Inc. (Nasdaq:EGLE) today announced the completion of two transactions that enhance internally generated growth and increase financial flexibility.

Specific actions include:

* Reached an agreement with Yanghzou Dayang Shipbuilding Co., Ltd. in China that reduces current capital expenditure obligations by approximately $363 million by:
o Converting eight charter-free Supramax newbuilding contracts totaling approximately $316 million into options on the part of Eagle Bulk.
o Preserving 100% of Eagle Bulk's deposits for the eight newbuilding contracts, representing approximately $47 million.
o Applying the $47 million towards progress payments for the remaining vessels which are being constructed for delivery in 2009.
* Paid $55,000 for each of the options for the eight vessels while maintaining the original contract prices on exercise of the options between approximately $36.7 and $42.3 million.
* Rescheduled delivery of a charter-free Supramax vessel, Thrush, from September 2009 to November 2010.
* Signed an agreement with its lenders to amend its $1.6 billion revolving credit facility to $1.35 billion and favorably adjust a number of loan covenants, specifically a reduction of the asset value clause. Eagle Bulk benefits from increased liquidity as the reduction in the credit facility is less than the reduction in the capital commitments achieved by the agreement with the shipyard.

To further increase cash flow and optimize financial flexibility, the Board of Directors has decided to suspend the Company's dividend to enhance internally generated growth. The Company will continue to utilize the undrawn portion of its credit facility, as well as cash flow from operations, to fund its newbuilding program and to take advantage of other opportunities which may arise in the marketplace.

Sophocles N. Zoullas, Chairman and Chief Executive Officer, commented, "We firmly believe that these agreements, one with our shipyard, and one with our lenders, represent the proactive strategic direction that will deliver long-term value to our shareholders through enhanced internally generated growth.

"The modifications to our newbuilding program will help reduce capital expenditures by 33%, while increasing future contract coverage to 63% and 43% for 2009 and 2010, respectively.

"We also want to acknowledge the spirit of cooperation that has governed our discussions with the Dayang Shipyard and our lenders, which we believe underscores their continued support for Eagle Bulk and has significantly enhanced the Company's future prospects."

Amendment to Revolving Credit Facility

The Company's agreement with its lenders amends its $1.6 billion revolving credit facility to $1.35 billion while favorably adjusting certain loan covenants. The requirement for the Company to maintain a minimum security value of its fleet, which is now an aggregate of the market value of the vessels in its operating fleet and the deposits on its newbuilding contracts that secure its obligations under the revolving credit facility, has been reduced from 130% to 100% of the aggregate principal amount of debt outstanding under the facility. Future dividend payments will be based on the Company maintaining a minimum security value of 130%. The minimum net worth requirement has been reduced from $300 million to $75 million for next year and is subject to annual review thereafter. The amended facility will bear interest at the rate of 1.75% over LIBOR. The amended facility will be available in full until July 2012, following which it will reduce pro rata to a balloon of $717.2 million at maturity in July 2017. The amendment requires the satisfaction of certain post-closing conditions by the Company.

The Company expects to incur certain noncash charges relating to the writedown of deferred costs in connection with the agreements.

About Eagle Bulk Shipping Inc.
Eagle Bulk Shipping Inc. is a Marshall Islands corporation headquartered in New York. The Company is a leading global owner of Supramax dry bulk vessels that range in size from 50,000 to 60,000 deadweight tons and transport a broad range of major and minor bulk cargoes, including iron ore, coal, grain, cement and fertilizer, along worldwide shipping routes.

Eagle Bulk Shipping Inc.