Note 6 - Long-term Bank Loans |
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| Long-Term Debt [Text Block] |
6. Long-Term Bank Loans
These consist of bank loans of the ship-owning companies guaranteed by EuroDry Ltd. and are as follows:
The future annual loan repayments are as follows:
Details of the loans are discussed in Note 8 of the Company’s consolidated financial statements for the year ended December 31, 2025, included in the 2025 Annual Report. There have been no changes in the terms of the loans during the six months ended June 30, 2026.
The Company’s bank loans are secured with one or more of the following:
The loan agreements also contain covenants such as minimum requirements regarding the security cover ratio covenant (the ratio of fair value of vessel to outstanding loan less cash in retention accounts) ranging from 120% to 125%, restrictions as to changes in management and ownership of the ship-owning companies, distribution of profits or assets (i.e. not permitting dividend payment or other distributions in cases that an event of default has occurred), additional indebtedness and mortgage of vessels without the lender’s prior consent, sale of vessels, maximum fleet-wide leverage, sale of capital stock of the Company’s subsidiaries, ability to make investments and other capital expenditures, entering in mergers or acquisitions, minimum cash balance requirements and minimum cash retention accounts (restricted cash). The loan agreements also require the Company to make deposits in retention accounts with certain banks that can only be used to pay the current loan installments, as well as deposits to dry docking reserve accounts that can only be used to cover the cost of the next scheduled drydocking of the respective collateral vessel. Minimum cash balance requirements are in addition to cash held in retention accounts. These cash deposits (including the cash collateral required under certain of the Company’s FFAs, if any, as described in Note 10) amounted to $5,356,922 and $5,726,051 as of December 31, 2025 and June 30, 2026, respectively, and are included in "Restricted cash" under "Current assets" and "Long-term assets" in the unaudited condensed consolidated balance sheets. As of June 30, 2026, the Company satisfied all its debt covenants.
Interest expense for the six-month periods ended June 30, 2025 and 2026, amounted to $3,387,607 and $2,901,834, respectively.
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