Danaos prices $500 million in senior notes at 6.875% due 2032

ATHENS - Container vessel owner Danaos Corporation (NYSE:DAC), currently operating with a "GREAT" financial health score according to InvestingPro analysis, has priced an offering of $500 million in senior notes with a 6.875% interest rate due 2032, the company announced Thursday. The company maintains impressive gross margins of 70% and a strong current ratio of 5.36x.

The notes are being offered through a private placement exempt from registration requirements under the U.S. Securities Act of 1933.

Danaos plans to use the proceeds to redeem its outstanding $262.8 million in 8.500% Senior Notes due 2028 on or around March 1, 2026. The company will also repay two secured credit facilities: a $130 million facility with BNP Paribas/Credit Agricole and a $55.25 million facility with Alpha Bank, both due for repayment on December 1, 2025.

The remaining funds will cover transaction costs and general corporate purposes, according to the press release statement.

The offering is expected to close around October 16, 2025, subject to customary closing conditions.

Danaos Corporation owns a fleet of 74 container vessels with a total capacity of 471,477 TEUs (twenty-foot equivalent units), with an additional 18 vessels under construction that will add 148,564 TEUs to its capacity. The company has also recently expanded into the dry bulk sector with the acquisition of 10 capesize vessels totaling 1,760,861 DWT (deadweight tonnage). Trading at attractive multiples with a P/E of 3.5x and P/B of 0.43x, the stock appears undervalued based on comprehensive analysis.

In other recent news, Danaos Corporation reported its Q2 2025 earnings, showing an adjusted earnings per share (EPS) of $6.36, which did not meet the forecasted $6.66. However, the company surpassed revenue expectations, with reported revenue of $262.15 million compared to the anticipated $247.26 million. Additionally, Danaos announced plans to offer up to $500 million in Senior Notes due in 2032, with the intention of using the proceeds to redeem its existing $262.8 million Senior Notes due 2028 and repay two secured credit facilities. The company also added $304 million to its revenue backlog and ordered two new containerships. The revenue backlog includes $164 million from forward charter fixtures for existing vessels and $140 million from new vessel charters. These developments reflect Danaos’s strategic financial maneuvers and ongoing fleet expansion efforts.

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