UNITED
      STATES SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C.
      20549________________FORM
      10-Q




(Mark One)


[X]
            QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




For
the quarterly period endedMarch 31,
2009




OR




[  ]
              TRANSITION REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
  1934


For
the transition period
from                    to






________________




Commission File
Number 001–33831




EAGLE
BULK SHIPPING INC.


(Exact name of Registrant as specified
in its charter)







Republic
      of the Marshall Islands
            
            98–0453513(State
      or other jurisdiction of
              incorporation
      or organization)
            
            (I.R.S.
      Employer
              Identification
      No.)





477
      Madison Avenue
              Suite 1405
              New
      York, New York 10022
              Address
      of Principal Executive Offices





Registrant's
telephone number, including area code: (212) 785–2500





Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15
(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.YESXNO





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding
12 months (or for such shorter period that the registrant was required to submit
and post such files).  YES             NO





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer", "accelerated filer" and smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):





Large
accelerated Filer X    Accelerated Filer    Non-accelerated
Filer    Smaller
reporting company





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).





YES
            NO X




Indicate
      the number of shares outstanding of each of the issuer's classes of common
      stock, as of the latest practicable date.Common
      Stock, par value $0.01 per share, 47,031,300 shares outstanding as of May
      6, 2009.







1














TABLE OF CONTENTSPagePART
      I
            FINANCIAL
      INFORMATIONItem
      1.
            Financial
      StatementsConsolidated
      Balance Sheets as of March 31, 2009 (unaudited) and
              December
      31,
      2008
            3Consolidated
      Statements of Operations (unaudited) for the three months ended March 31,
      2009 and 2008
            4Consolidated
      Statement of Stockholders' Equity (unaudited) for the three months ended
      March 31, 2009
            5Consolidated
      Statements of Cash Flows (unaudited) for the three months ended March 31,
      2009 and 2008
            6Notes
      to Consolidated Financial Statements (unaudited)
            7Item
      2.
            Management's
      Discussion and Analysis of Financial Condition
              and
      Results of
      Operations
            14Item
      3.
            Quantitative
      and Qualitative Disclosures about Market Risks
            25Item
      4.
            Controls
      and Procedures
            25PART
      II
            OTHER
      INFORMATIONItem
      1.
            Legal
      Proceedings
            26Item
      1A.
            Risk
      Factors
            26Item
      2.
            Unregistered
      Sales of Equity Securities and Use of Proceeds
            26Item
      3.
            Defaults
      upon Senior Securities
            26Item
      4.
            Submission
      of Matters to a Vote of Security Holders
            26Item
      5.
            Other
      Information
            26Item
      6.
            Exhibits
            26Signatures
            27








2


Part
1 : FINANCIAL INFORMATION


Item
1 : Financial Statements




EAGLE
BULK SHIPPING INC.


CONSOLIDATED
BALANCE SHEETS




March 31, 2009
                                                                                    
                                                                                    
                                                                                    December 31, 2008ASSETS:Current
      assets:Cash
      and cash equivalents
                                                                                    
                                                                                    $
                                                                                    18,896,758
                                                                                    
                                                                                    
                                                                                    $
                                                                                    9,208,862Accounts
      receivable
                                                                                    
                                                                                    
                                                                                    5,242,161
                                                                                    
                                                                                    
                                                                                    
                                                                                    4,357,837Prepaid
      expenses
                                                                                    
                                                                                    
                                                                                    3,377,755
                                                                                    
                                                                                    
                                                                                    
                                                                                    3,297,801Other
      assets
                                                                                    
                                                                                    
                                                                                    3,549,732
                                                                                    
                                                                                    
                                                                                    
                                                                                    —Total current assets
                                                                                    
                                                                                    
                                                                                    31,066,406
                                                                                    
                                                                                    
                                                                                    
                                                                                    16,864,500Noncurrent
      assets:Vessels
      and vessel improvements, at cost, net of accumulated
                                                                                      depreciation
      of $93,807,957 and $84,113,047, respectively
                                                                                    
                                                                                    
                                                                                    938,418,488
                                                                                    
                                                                                    
                                                                                    
                                                                                    874,674,636Advances
      for vessel construction
                                                                                    
                                                                                    
                                                                                    381,815,260
                                                                                    
                                                                                    
                                                                                    
                                                                                    411,063,011Restricted
      cash
                                                                                    
                                                                                    
                                                                                    12,776,056
                                                                                    
                                                                                    
                                                                                    
                                                                                    11,776,056Deferred
      drydock costs, net of accumulated amortization of
                                                                                      $5,618,655
      and $5,022,649, respectively
                                                                                    
                                                                                    
                                                                                    3,228,074
                                                                                    
                                                                                    
                                                                                    
                                                                                    3,737,386Deferred
      financing costs
                                                                                    
                                                                                    
                                                                                    23,827,797
                                                                                    
                                                                                    
                                                                                    
                                                                                    24,270,060Fair
      value above contract value of time charters acquired
                                                                                    
                                                                                    
                                                                                    4,531,115
                                                                                    
                                                                                    
                                                                                    
                                                                                    4,531,115Fair
      value of derivative instruments and other assets
                                                                                    
                                                                                    
                                                                                    6,173,340
                                                                                    
                                                                                    
                                                                                    
                                                                                    15,258,780Total
      noncurrent assets
                                                                                    
                                                                                    
                                                                                    1,370,770,130
                                                                                    
                                                                                    
                                                                                    
                                                                                    1,345,311,044Total
      assets
                                                                                    
                                                                                    $
                                                                                    1,401,836,536
                                                                                    
                                                                                    
                                                                                    $
                                                                                    1,362,175,544LIABILITIES
      & STOCKHOLDERS' EQUITY
                                                                                      Current
      liabilities:Accounts
      payable
                                                                                    
                                                                                    $
                                                                                    3,423,635
                                                                                    
                                                                                    
                                                                                    $
                                                                                    2,037,060Accrued
      interest
                                                                                    
                                                                                    
                                                                                    6,651,391
                                                                                    
                                                                                    
                                                                                    
                                                                                    7,523,057Other
      accrued liabilities
                                                                                    
                                                                                    
                                                                                    4,844,379
                                                                                    
                                                                                    
                                                                                    
                                                                                    3,021,975Deferred
      revenue and fair value below contract value of time charters
      acquired
                                                                                    
                                                                                    
                                                                                    16,724,194
                                                                                    
                                                                                    
                                                                                    
                                                                                    2,863,184Unearned
      charter hire revenue
                                                                                    
                                                                                    
                                                                                    5,696,640
                                                                                    
                                                                                    
                                                                                    
                                                                                    5,958,833Total
      current liabilities
                                                                                    
                                                                                    
                                                                                    37,340,239
                                                                                    
                                                                                    
                                                                                    
                                                                                    21,404,109Noncurrent
      liabilities:Long-term
      debt
                                                                                    
                                                                                    
                                                                                    802,476,403
                                                                                    
                                                                                    
                                                                                    
                                                                                    789,601,403Fair
      value below contract value of time charters acquired
                                                                                    
                                                                                    
                                                                                    28,007,433
                                                                                    
                                                                                    
                                                                                    
                                                                                    29,205,196Fair
      value of derivative instruments
                                                                                    
                                                                                    
                                                                                    49,525,089
                                                                                    
                                                                                    
                                                                                    
                                                                                    50,538,060Total
      noncurrent liabilities
                                                                                    
                                                                                    
                                                                                    880,008,925
                                                                                    
                                                                                    
                                                                                    
                                                                                    869,344,659Total
      liabilities
                                                                                    
                                                                                    
                                                                                    917,349,164
                                                                                    
                                                                                    
                                                                                    
                                                                                    890,748,768Commitment
      and contingenciesStockholders'
      equity:Preferred
      stock, $.01 par value, 25,000,000 shares authorized, none
      issued
                                                                                    
                                                                                    
                                                                                    —
                                                                                    
                                                                                    
                                                                                    
                                                                                    —Common
      shares, $.01 par value, 100,000,000 shares authorized, 47,031,300 shares
      issued and outstanding
                                                                                    
                                                                                    
                                                                                    470,313
                                                                                    
                                                                                    
                                                                                    
                                                                                    470,313Additional
      paid-in capital
                                                                                    
                                                                                    
                                                                                    618,137,930
                                                                                    
                                                                                    
                                                                                    
                                                                                    614,241,646Retained
      earnings (net of dividends declared of $262,188,388)
                                                                                    
                                                                                    
                                                                                    (90,549,877
                                                                                    )
                                                                                    
                                                                                    
                                                                                    (107,786,658
                                                                                    )Accumulated
      other comprehensive loss
                                                                                    
                                                                                    
                                                                                    (43,570,994
                                                                                    )
                                                                                    
                                                                                    
                                                                                    (35,498,525
                                                                                    )Total
      stockholders' equity
                                                                                    
                                                                                    
                                                                                    484,487,372
                                                                                    
                                                                                    
                                                                                    
                                                                                    471,426,776Total
      liabilities and stockholders' equity
                                                                                    
                                                                                    $
                                                                                    1,401,836,536
                                                                                    
                                                                                    
                                                                                    $
                                                                                    1,362,175,544


________________


The
accompanying notes are an integral part of these Consolidated Financial
Statements.






3





EAGLE
BULK SHIPPING INC.


CONSOLIDATED
STATEMENTS OF OPERATIONS


(UNAUDITED)





Three Months EndedMarch 31, 2009
                
                
                March 31, 2008Revenues,
      net of commissions
                
                $
                55,977,666
                
                
                $
                36,686,016Vessel
      expenses
                
                
                13,071,197
                
                
                
                7,991,261Depreciation
      and amortization
                
                
                10,290,916
                
                
                
                7,336,039General
      and administrative expenses
                
                
                8,903,028
                
                
                
                5,049,159Total
      operating expenses
                
                
                32,265,141
                
                
                
                20,376,459Operating
      income
                
                
                23,712,525
                
                
                
                16,309,557Interest
      expense
                
                
                6,486,317
                
                
                
                3,350,253Interest
      income
                
                
                (10,573
                )
                
                
                (1,386,506
                )Net
      interest expense
                
                
                6,475,744
                
                
                
                1,963,747Net
      income
                
                $
                17,236,781
                
                
                $
                14,345,810Weighted
      average shares outstanding :Basic
                
                
                47,031,300
                
                
                
                46,752,538Diluted
                
                
                47,031,300
                
                
                
                46,925,494Per
      share amounts:Basic
      net income
                
                $
                0.37
                
                
                $
                0.31Diluted
      net income
                
                $
                0.37
                
                
                $
                0.31Cash
      dividends declared and paid
                
                
                —
                
                
                $
                0.50





________________


The
accompanying notes are an integral part of these Consolidated Financial
Statements.


4





EAGLE
BULK SHIPPING INC.


CONSOLIDATED
STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)


FOR
THE THREE MONTHS ENDED MARCH 31, 2009











Common
                                                        Shares
                                                    
                                                    
                                                    Common
                                                        Shares
                                                        Amount
                                                    
                                                    
                                                    Additional
                                                        Paid-In
                                                        Capital
                                                    
                                                    
                                                    Net
      Income
                                                    
                                                    
                                                    Accumulated
      Deficit
                                                    
                                                    
                                                    Other
      Comprehensive Income (Loss
                                                    
                                                    
                                                    Total
      Stockholders' EquityBalance
      at December 31, 2008
                                                    47,031,300
                                                    
                                                    
                                                    $
                                                    470,313
                                                    
                                                    
                                                    $
                                                    614,241,646
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    $
                                                    (107,786,658
                                                    )
                                                    
                                                    $
                                                    (35,498,525
                                                    )
                                                    
                                                    $
                                                    471,426,776Comprehensive
      income :Net
      income
                                                    —
                                                    
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    $
                                                    17,236,781
                                                    
                                                    
                                                    
                                                    17,236,781
                                                    
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    17,236,781Net
      unrealized losses on derivatives
                                                    —
                                                    
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    (8,072,469
                                                    )
                                                    
                                                    
                                                    (8,072,469
                                                    )Comprehensive
      income
                                                    —
                                                    
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    9,164,312Non-cash
      compensation
                                                    —
                                                    
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    3,896,284
                                                    
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    3,896,284Balance
      at March 31, 2009
                                                    47,031,300
                                                    
                                                    
                                                    $
                                                    470,313
                                                    
                                                    
                                                    $
                                                    618,137,930
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    $
                                                    (90,549,877
                                                    )
                                                    
                                                    $
                                                    (43,570,994
                                                    )
                                                    
                                                    $
                                                    484,487,372




________________


5


EAGLE
BULK SHIPPING INC.


CONSOLIDATED
STATEMENTS OF CASH FLOWS


(UNAUDITED)




Three
      Months EndedMarch 31, 2009
                            
                            
                            March 31, 2008Cash
      flows from operating activities:Net
      income
                            
                            $
                            17,236,781
                            
                            
                            $
                            14,345,810Adjustments
      to reconcile net income to net cash provided by operating
      activities:Items
      included in net income not affecting cash flows:Depreciation
                            
                            
                            9,694,910
                            
                            
                            
                            6,708,415Amortization
      of deferred drydocking costs
                            
                            
                            596,006
                            
                            
                            
                            627,624Amortization
      of deferred financing costs
                            
                            
                            240,057
                            
                            
                            
                            61,907Amortization
      of fair value below contract value of time charter
acquired
                            
                            
                            (649,731
                            )
                            
                            
                            —Non-cash
      compensation expense
                            
                            
                            3,896,284
                            
                            
                            
                            2,515,703Changes
      in operating assets and liabilities:Accounts
      receivable
                            
                            
                            (884,324
                            )
                            
                            
                            113,078Other
      assets
                            
                            
                            (3,549,732
                            )
                            
                            
                            —Prepaid
      expenses
                            
                            
                            (79,954
                            )
                            
                            
                            (141,700
                            )Accounts
      payable
                            
                            
                            1,386,575
                            
                            
                            
                            (1,476,295
                            )Accrued
      interest
                            
                            
                            350,812
                            
                            
                            
                            3,106,074Accrued
      expenses
                            
                            
                            1,822,404
                            
                            
                            
                            (46,930
                            )Drydocking
      expenditures
                            
                            
                            (86,694
                            )
                            
                            
                            (65,851
                            )Deferred
      revenue
                            
                            
                            13,312,978
                            
                            
                            
                            —Unearned
      charter hire revenue
                            
                            
                            (262,193
                            )
                            
                            
                            706,527Net
      cash provided by operating activities
                            
                            
                            43,024,179
                            
                            
                            
                            26,454,362Cash
      flows from investing activities:Vessels
      and vessel improvements and advances for vessel
    construction
                            
                            
                            (44,271,329
                            )
                            
                            
                            (13,399,474
                            )Net
      cash used in investing activities
                            
                            
                            (44,271,329
                            )
                            
                            
                            (13,399,474
                            )Cash
      flows from financing activities:Bank
      borrowings
                            
                            
                            12,875,000
                            
                            
                            
                            6,630,000Changes
      in restricted cash
                            
                            
                            (1,000,000
                            )
                            
                            
                            (151,440
                            )Deferred
      financing costs
                            
                            
                            (939,954
                            )
                            
                            
                            (545,140
                            )Cash
      dividends
                            
                            
                            —
                            
                            
                            
                            (23,378,577
                            )Net cash provided by/(used in) financing
      activities
                            
                            
                            10,935,046
                            
                            
                            
                            (17,445,157
                            )Net
      increase/(decrease) in cash
                            
                            
                            9,687,896
                            
                            
                            
                            (4,390,269
                            )Cash
      at beginning of period
                            
                            
                            9,208,862
                            
                            
                            
                            152,903,692Cash
      at end of period
                            
                            $
                            18,896,758
                            
                            
                            $
                            148,513,423






________________


6





EAGLE
BULK SHIPPING INC.


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)





Note 1.  Basis
of Presentation and General Information





The
accompanying consolidated financial statements include the accounts of Eagle
Bulk Shipping Inc. and its wholly-owned subsidiaries (collectively, the
"Company", "we" or "our"). The Company is engaged in the ocean transportation of
dry bulk cargoes worldwide through the ownership and operation of dry bulk
vessels. The Company's fleet is comprised of Supramax and Handymax bulk carriers
and the Company operates its business in one business segment.




The
Company is a holding company incorporated in 2005, under the laws of the
Republic of the Marshall Islands and is the sole owner of all of the outstanding
shares of its wholly-owned subsidiaries incorporated in the Republic of the
Marshall Islands. The primary activity of each of the subsidiaries is the
ownership of a vessel. The operations of the vessels are managed by a
wholly-owned subsidiary of the Company, Eagle Shipping International (USA) LLC,
a Republic of the Marshall Islands limited liability company.




As
of March 31, 2009, the Company's operating fleet consisted of 25 vessels. The
Company has an extensive vessel newbuilding program and as of March 31, 2009 had
contracts for the construction of 22 vessels. The following tables present
certain information concerning the Company's fleet as of March 31,
2009:





No. of Vessels
              Dwt
              Vessel
                Type
              Delivery
              EmploymentVessels in Operation25
      Vessels
              1,296,917
              22
      Supramax
              
              Time
      Charter3
      Handymax
              
              Time
      CharterVessels to be delivered3
      Vessels
              159,300
              53,100
      dwt series Supramax
              2009-2010
              2
      Vessels on Time Charter and 1 Vessel Charter Free2
      Vessels
              112,000
              56,000
      dwt series Supramax
              2010
              2
      Vessels Charter Free17
      Vessels
              986,000
              58,000
      dwt series Supramax
              2009-2011
              17
      Vessels on Time Charter





The
following table represents certain information about the Company's charterers
which individually accounted for more than 10% of the Company's gross time
charter revenue during the periods indicated:




Charterer
                            % of Consolidated time charter
      revenueThree Months Ended March
  31,2009
                            
                            2008Charterer
      B
                            20.3%
                            
                            26.2%Charterer
      H
                            12.0%
                            
                            15.4%Charterer
      J
                            7.0%
                            
                            10.7%Charterer
      L
                            16.0%
                            
                            19.5%Charterer
      M
                            18.2%
                            
                            11.6%









7





The
accompanying unaudited consolidated financial statements have been prepared in
accordance with generally accepted accounting principles in the United States,
and the rules and regulations of the SEC ("Securities and Exchange Commission")
which apply to interim financial statements and with the instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes normally included in consolidated financial
statements prepared in conformity with generally accepted accounting principles
in the United States. They should be read in conjunction with the consolidated
financial statements and notes thereto included in the Company's 2008 Annual
Report on Form 10-K.




The
accompanying unaudited consolidated financial statements include all adjustments
(consisting of normal recurring adjustments) that management considers necessary
for a fair presentation of its consolidated financial position and results of
operations for the interim periods presented. The results of operations for the
interim periods are not necessarily indicative of the results that may be
expected for the entire year.




Note
2.  New Accounting Pronouncements




In
April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, "Interim
Disclosures about Fair Value of Financial Instruments." This FASB Staff Position
("FSP") amends Statement of Financial Accounting Standard ("SFAS") No. 107,
"Disclosures About Fair Value of Financial Instruments," to require disclosures
about fair value of financial instruments for interim reporting periods of
publicly traded companies as well as in annual financial statements. This FSP
also amends APB Opinion No. 28, "Interim Financial Reporting," to require
those disclosures in summarized financial information at interim reporting
periods. This FSP is effective for interim reporting periods ending after
June 15, 2009, with early adoption permitted for periods ending after
March 15, 2009. The FSP does not require disclosures for earlier periods
presented for comparative purposes at initial adoption. In periods after initial
adoption, this FSP requires comparative disclosures only for periods ending
after initial adoption. We do not expect the changes associated with adoption of
this FSP will have a material effect on the determination or reporting of our
financial results.




Note 3.  Vessels




a.
Vessel and Vessel Improvements




At
March 31, 2009, the Company's operating fleet consisted of 25 dry bulk vessels.
In January and March 2009, the Company took delivery of the Crested Eagle and
Stellar Eagle.




Vessel
and vessel improvements consist of the following:




Vessels
      and Vessel Improvements, at December 31, 2008
                            
                            $
                            874,674,636Purchase
      of Vessel and Vessel Improvements
                            
                            
                            1,529,318Delivery
      of Newbuild Vessels
                            
                            
                            71,909,444Depreciation
      Expense
                            
                            
                            (9,694,910
                            )Vessels
      and Vessel Improvements, at March 31, 2009
                            
                            $
                            938,418,488





b.
Advances for Vessel Construction




The
Company took delivery of the Crested Eagle and Stellar Eagle, two Japanese built
vessels in January and March 2009, respectively. In 2008, the Company took
delivery of two Chinese built vessels and one Japanese built
vessel.




As
of March 31, 2009, the total contract cost of the remaining two Supramax vessels
under construction in Japan was approximately $67,108,584. These vessels
construction contracts are Japanese yen based and as of March 31, 2009, the
Company had advanced an equivalent of $24,798,118 in progress payments towards
these contracts. The remaining two vessels are expected to be delivered in 2010.
The Company will incur additional associated costs relating to the construction
of these vessels, including capitalized interest, insurance, legal, and
technical supervision costs.






8




As
of March 31, 2009, the Company had twenty Supramax vessels under construction at
the shipyard in China. The total contract cost of the construction project in
China is approximately $859,098,055, of which the Company has advanced
$310,668,055 in payments towards the construction of these vessels. These
vessels are expected to be delivered between 2009 and 2011. The Company will
incur additional costs relating to the construction of these vessels, including
capitalized interest, insurance, legal, and technical supervision
costs.




Advances
for Vessel Construction consist of the following:




Advances
      for Vessel Construction, at December 31, 2008
                          
                          $
                          411,063,011Progress
      Payments
                          
                          
                          34,435,997Capitalized
      Interest
                          
                          
                          6,779,318Legal
      and Technical Supervision Costs
                          
                          
                          1,446,378Delivery
      of Newbuild Vessels
                          
                          
                          (71,909,444
                          )Advances
      for Vessel Construction, at March 31, 2009
                          
                          $
                          381,815,260








Note 4.  Long-Term
Debt




At
March 31, 2009, the Company's debt consisted of $802,476,403 in net borrowings
under the amended revolving credit facility. These borrowings consisted of
$424,721,218 for the 25 vessels currently in operation and $377,755,185 to fund
the Company's newbuilding program.




On
December 17, 2008, the Company entered into a second amendatory agreement to its
$1,600,000,000 revolving credit facility. Among other things, the agreement
reduces the amount of the credit facility to $1,350,000,000, amends the minimum
security cover definition in the credit facility to include the installment
payments on its newbuilding contracts and reduces the minimum security value
clause of the credit facility from 130% to 100% of the aggregate principal
amount of debt outstanding under the credit facility. The agreement also
provides, however, that future dividend payments will be based on maintaining a
minimum security value of 130%. In addition, it increases the interest margin to
1.75% over LIBOR, but also reduces the minimum net worth clause of the credit
facility from $300,000,000 to $75,000,000 for 2009, subject to annual review
thereafter.




The
revolving credit facility also requires us, among other things, to ensure that
we maintain with the lender $500,000 per delivered vessel. As of March 31, 2009,
the Company has recorded $12,500,000 as restricted cash in the accompanying
balance sheets. As of March 31, 2009, $547,523,597 is available for additional
borrowings under the credit facility. The facility is available in full until
July 2012 when availability will begin to reduce in 10 semi-annual reductions of
$63,281,250 with a full repayment of $717,187,500 in July 2017. The Company will
also pay on a quarterly basis a commitment fee of 0.3% per annum on the undrawn
portion of the facility.




For
the three months ended March 31, 2009, interest rates on the outstanding debt
ranged from 2.84% to 6.99%, including a margin of 0.80% to 1.75% over LIBOR
applicable under the terms of the amended revolving credit facility. The
weighted average effective interest rate was 6.08%. The Company incurred a
commitment fee ranging from 0.25% to 0.30% on the undrawn portion of the
revolving credit facility. Interest costs on borrowings used to fund the
Company's newbuilding program are capitalized until the vessels are
delivered.






9




Interest
Expense, exclusive of capitalized interest, consists of:


Three
      Months EndedMarch 31, 2009
                                          
                                          
                                          March 31, 2008Loan
      Interest
                                          
                                          $
                                          6,243,274
                                          
                                          
                                          $
                                          3,273,413Commitment
      Fees
                                          
                                          
                                          2,986
                                          
                                          
                                          
                                          14,933Amortization
      of Deferred Financing Costs
                                          
                                          
                                          240,057
                                          
                                          
                                          
                                          61,907Total
      Interest Expense
                                          
                                          $
                                          6,486,317
                                          
                                          
                                          $
                                          3,350,253





Interest
paid, exclusive of capitalized interest, in the three month periods ended March
31, 2009 and 2008 amounted to $5,895,446 and $2,721,992,
respectively.




Interest-Rate
Swaps





The
Company has entered into interest rate swaps to effectively convert a portion of
its debt from a floating to a fixed-rate basis. Under these swap contracts,
exclusive of applicable margins, the Company will pay fixed rate interest and
receive floating-rate interest amounts based on three-month LIBOR settings. The
swaps are designated and qualify as cash flow hedges. The following table
summarizes the interest rate swaps in place as of March 31, 2009 and December
31, 2008.




Notional
      Amount Outstanding –
                      March
      31, 2009
                    
                    Notional
      Amount Outstanding –
                      December
      31, 2008
                    
                    Fixed
      Rate
                    
                    Maturity$     84,800,000
                    
                    $     84,800,000
                    
                    5.240%
                    
                    09/2009*25,776,443
                    
                    25,776,443
                    
                    4.900%
                    
                    03/201010,995,000
                    
                    10,995,000
                    
                    4.980%
                    
                    08/2010202,340,000
                    
                    202,340,000
                    
                    5.040%
                    
                    08/2010100,000,000
                    
                    100,000,000
                    
                    4.220%
                    
                    09/201030,000,000
                    
                    30,000,000
                    
                    4.538%
                    
                    09/201025,048,118
                    
                    25,048,118
                    
                    4.740%
                    
                    12/201136,752,038
                    
                    36,752,038
                    
                    5.225%
                    
                    08/201281,500,000
                    
                    81,500,000
                    
                    3.895%
                    
                    01/2013144,700,000
                    
                    144,700,000
                    
                    3.580%
                    
                    10/20119,162,500
                    
                    9,162,500
                    
                    3.515%
                    
                    10/20113,405,174
                    
                    3,405,174
                    
                    3.550%
                    
                    10/201117,050,000
                    
                    17,050,000
                    
                    3.160%
                    
                    11/2011$  771,529,273
                    
                    $  771,529,273




*Upon
maturity of the $84,800,000 swap in September 2009, a swap with the same
notional amount will commence with a fixed interest rate of 3.90% that matures
in September 2013.




The
Company records the fair value of the interest rate swaps as an asset or
liability on its balance sheet. The effective portion of the swap is recorded in
accumulated other comprehensive income. Accordingly, liabilities of $49,525,089
and $50,538,060 have been recorded in Fair value of derivative instruments in
the Company's balance sheets as of March 31, 2009 and December 31, 2008,
respectively.




Foreign
Currency swaps





The
Company has entered into foreign exchange swap transactions to hedge foreign
currency risks on its capital asset transactions (vessel newbuildings). The
swaps are designated and qualified as cash flow hedges.




At
December 31, 2008, the Company had outstanding foreign currency swap contracts
for notional amounts aggregating 8.6 billion Japanese yen swapped into the
equivalent of $80,378,030. In February 2009, the Company fixed the gain on its
outstanding foreign currency swaps contracts. This gain will be recognized upon
delivery of the remaining vessels. During the quarter ended March 31, 2009, the
Company recognized a foreign currency gain of $7,684,225 which offset the cost
of Stellar Eagle and Crested Eagle upon their delivery. The remaining gain as of
March 31, 2009 aggregating $5,954,095 will offset the cost of the remaining two
vessels upon their delivery in January, 2010 and February 2010,
respectively.






10




The
Company records the fair value of the currency swaps as an asset or liability in
its financial statements. The effective portion of the currency swap is recorded
in accumulated other comprehensive income. Accordingly, an amount of $5,954,095
and $15,039,535 have been recorded in Fair value of derivative instruments and
other assets in the accompanying balance sheets as of March 31, 2009, and
December 31, 2008, respectively.




Note 
5.  Fair Value Measurements




Effective
January 1, 2008, the Company adopted SFAS 157, which defines fair
value, establishes a framework for measuring fair value and expands disclosures
about fair value measurements.  The fair value hierarchy for
disclosure of fair value measurements under SFAS 157 is as follows:




Level
1 – Quoted prices in active markets for identical assets or
liabilities


Level
2 – Quoted prices for similar assets and liabilities in active markets or inputs
that are observable


Level
3 – Inputs that are unobservable (for example cash flow modeling inputs based on
assumptions)




The
following table summarizes assets and liabilities measured at fair value on a
recurring basis at March 31, 2009, as required by SFAS 157:


Level
      1
                  Level
      2
                  Level
      3AssetsForeign
      currency contracts
                  —
                  $5,954,095
                  —Liabilities
                  Interest
      rate contracts
                  —
                  $49,525,089
                  —





The
fair value of the interest rate and foreign currency swap contracts are based on
quoted market prices for a similar contract and can be validated through
external sources.




Note 
6.  Commitments and Contingencies





Vessel Technical Management
Contracts





The
Company has technical management agreements for each of its vessels with
independent technical managers. The Company paid average monthly technical
management fees of $9,173 and $9,623 per vessel during the three months ended
March 31, 2009 and 2008, respectively.




Note 7.  Earnings
Per Common Share





The computation of basic earnings per
share is based on the weighted average number of common shares outstanding
during the period. Diluted net income per share gives effect to stock options
and restricted stock units using the treasury stock method, unless the impact is
anti-dilutive. Diluted net income per share as of March 31, 2009, does not
include 1,466,013 restricted stock units and 756,541 stock options as their
effect was anti-dilutive.








Three
      Months EndedMarch 31, 2009
                        
                        
                        March 31, 2008Net
      Income
                        
                        $
                        17,236,781
                        
                        
                        $
                        14,345,810Weighted
      Average Shares – Basic
                        
                        
                        47,031,300
                        
                        
                        
                        46,752,538Dilutive
      effect of stock options and restricted stock units
                        
                        
                        0
                        
                        
                        
                        172,956Weighted
      Average Shares – Diluted
                        
                        
                        47,031,300
                        
                        
                        
                        46,925,494Basic
      Earnings Per Share
                        
                        $
                        0.37
                        
                        
                        $
                        0.31Diluted
      Earnings Per Share
                        
                        $
                        0.37
                        
                        
                        $
                        0.31






11





Note 8.  Capital
Stock





Dividends




Payment
of dividends is in the discretion of the board of directors and is limited by
the terms of certain agreements to which the Company and its subsidiaries are
parties to and provisions of Marshall Islands law. The Company's revolving
credit facility permits it to pay quarterly dividends in amounts up to its
cumulative free cash flows, which is our earnings before extraordinary or
exceptional items, interest, taxes, depreciation and amortization (Credit
Agreement EBITDA), less the aggregate amount of interest incurred and net
amounts payable under interest rate hedging agreements during the relevant
period and an agreed upon reserve for dry-docking for the period, provided that
there is not a default or breach of a loan covenant under the credit facility
and the payment of the dividends would not result in a default or breach of a
loan covenant. Depending on market conditions in the dry bulk shipping industry
and acquisition opportunities that may arise, the Company may be required to
obtain additional debt or equity financing which could affect its dividend
policy. In this connection, the drybulk market has recently declined
substantially. In December 2008, the Company's board of directors has determined
to suspend the payment of dividends to stockholders in order to increase cash
flow, optimize financial flexibility and enhance internal growth.  In
the future, the declaration and payment of dividends, if any, will always be
subject to the discretion of the board of directors, restrictions contained in
the credit facility and the requirements of Marshall Islands law. The timing and
amount of any dividends declared will depend on, among other things, the
Company's earnings, financial condition and cash requirements and availability,
the ability to obtain debt and equity financing on acceptable terms as
contemplated by the Company's growth strategy, the terms of its outstanding
indebtedness and the ability of the Company's subsidiaries to distribute funds
to it.




Note 9.  2005
Stock Incentive Plan





The
Company adopted the 2005 Stock Incentive Plan for the purpose of affording an
incentive to eligible persons. The 2005 Stock Incentive Plan provides for the
grant of equity-based awards, including stock options, stock appreciation
rights, restricted stock, restricted stock units, stock bonuses, dividend
equivalents and other awards based on or relating to the Company's common shares
to eligible non-employee directors, selected officers and other employees and
independent contractors. The plan is administered by a committee of the
Company's board of directors. An aggregate of 2.6 million shares of the
Company's common stock has been authorized for issuance under the
plan.




In
2007 and 2008, the Company granted restricted stock units ("RSUs") to members of
its management which vest ratably between three to five years. As of March 31,
2009, RSUs covering a total of 1,466,013 of the Company's shares are
outstanding. These RSUs also entitle the participant to receive a dividend
equivalent payment on the unvested portion of the underlying shares granted
under the award, each time the Company pays a dividend to the Company's
shareholders. The dividend equivalent rights on the unvested RSU are forfeited
upon termination of employment.The Company
is amortizing to non-cash compensation expense the fair value of the non-vested
restricted stock at the grant date. For the three months ended March 31, 2009
and 2008, the amortization charge was $3,270,064 and $1,826,046, respectively.
The remaining expense for each of the years ending 2009, 2010, and 2011 will be
$9,810,191, $12,410,365, and $5,450,402, respectively, and $7,126,803
thereafter.




As
of December 31, 2008, options covering 590,668 of the Company's common shares
were outstanding.  These options were awarded to members of its
management and its independent non-employee directors. On January 23, 2009, the
Company granted options to purchase 222,815 of the Company's common shares to
its independent non-employee directors. These options vested and became
exercisable on the grant date at an exercise price of $5.00 per share and expire
six years from the date of grant. For purposes of determining the non-cash
compensation cost for the Company's stock option plans using the fair value
method of FAS 123(R), the fair value of the options granted of $550,851 was
estimated on the date of grant using the Black-Scholes option pricing model. The
weighted average assumptions used for the 2009 grant included a risk free
interest rate of 2.2%, and an expected stock price volatility factor of
74%.  For the three months ended March 31, 2009 and 2008, the Company
has recorded a non-cash compensation charge of $626,220 and $81,257,
respectively. As of March 31, 2009, options covering 813,483 of the Company's
common shares are outstanding with exercise prices ranging from $5.00 to $21.88
per share (the market prices at dates of grants). The options granted to the
directors vested and became exercisable on the grant dates. The options granted
to members of its management vest and become exercisable over three years. All
options expire between six to ten years from the date of grant.






12




On
January 15, 2008, the Company granted 30,000 shares of its common stock, which
vested on the grant date, to its independent non-employee directors. The fair
value of the stock at the grant date was equal to the closing stock price on
that date and a total amount of $608,400 has been recorded in non-cash
compensation expense for the three months ended March 31, 2008.




The
non-cash compensation expenses recorded by the Company and included in General
and Administrative Expenses are as follows:





Three Months Ended March
31,2009
                              
                              
                              2008Stock
      Option Plans
                              
                              $
                              626,220
                              
                              
                              $
                              81,257Restricted
      Stock Grants
                              
                              
                              3,270,064
                              
                              
                              
                              1,826,046Stock
      Grants
                              
                              
                              —
                              
                              
                              
                              608,400Total
      Non-cash compensation expense
                              
                              $
                              3,896,284
                              
                              
                              $
                              2,515,703




In
2006 and 2007, the Company granted Dividend Equivalent Rights Awards ("DERs") to
its independent non-employee directors and members of its management. These DERs
entitle the participant to receive a dividend equivalent payment each time the
Company pays a dividend to the Company's shareholders. As of March 31, 2009,
DERs equivalent to 574,000 of the Company's common shares are outstanding. For
the three months ended March 31, 2009 and 2008, the Company has recorded in
General and Administrative Expense cash compensation expenses of $0 and
$632,334, respectively.




13





ITEM
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION




The
following is a discussion of the Company's financial condition and results of
operation for the three-month periods ended March 31, 2009 and 2008. This
section should be read in conjunction with the consolidated financial statements
included elsewhere in this report and the notes to those financial
statements.




This
discussion contains forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, Section 21E of the Securities
Exchange Act of 1934, as amended and the Private Securities Litigation Reform
Act of 1995, and are intended to be covered by the safe harbor provided for
under these sections.  These statements may include words such as
"believe," "estimate," "project," "intend," "expect," "plan," "anticipate," and
similar expressions in connection with any discussion of the timing or nature of
future operating or financial performance or other events. Forward looking
statements reflect management's current expectations and observations with
respect to future events and financial performance. Where we express an
expectation or belief as to future events or results, such expectation or belief
is expressed in good faith and believed to have a reasonable
basis.  However, our forward-looking statements are subject to risks,
uncertainties, and other factors, which could cause actual results to differ
materially from future results expressed, projected, or implied by those
forward-looking statements. The principal factors that affect our financial
position, results of operations and cash flows include, charter market rates,
which have recently declined significantly from historic highs, periods of
charter hire, vessel operating expenses and voyage costs, which are incurred
primarily in U.S. dollars, depreciation expenses, which are a function of the
cost of our vessels, significant vessel improvement costs and our vessels'
estimated useful lives, and financing costs related to our indebtedness. Our
actual results may differ materially from those anticipated in these forward
looking statements as a result of certain factors which could include the
following: (i) changes in demand in the dry bulk market, including, without
limitation, changes in production of, or demand for, commodities and bulk
cargoes, generally or in particular regions; (ii) greater than anticipated
levels of dry bulk vessel new building orders or lower than anticipated rates of
dry bulk vessel scrapping; (iii) changes in rules and regulations applicable to
the dry bulk industry, including, without limitation, legislation adopted by
international bodies or organizations such as the International Maritime
Organization and the European Union or by individual countries; (iv) actions
taken by regulatory authorities; (v) changes in trading patterns significantly
impacting overall dry bulk tonnage requirements; (vi) changes in the typical
seasonal variations in dry bulk charter rates; (vii) changes in the cost of
other modes of bulk commodity transportation; (viii) changes in general domestic
and international political conditions; (ix) changes in the condition of the
Company's vessels or applicable maintenance or regulatory standards (which may
affect, among other things, our anticipated drydocking costs); (x) and other
factors listed from time to time in our filings with the Securities and Exchange
Commission. This discussion also includes statistical data regarding world dry
bulk fleet and orderbook and fleet age. We generated some of this data
internally, and some were obtained from independent industry publications and
reports that we believe to be reliable sources. We have not independently
verified this data nor sought the consent of any organizations to refer to their
reports in this quarterly report. We disclaim any intent or obligation to update
publicly any forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required under applicable
securities laws.




Overview




We
are Eagle Bulk Shipping Inc., a Republic of Marshall Islands corporation
headquartered in New York City. We own one of the largest fleets of Supramax dry
bulk vessels in the world. Supramax dry bulk vessels range in size from 50,000
to 60,000 dwt. We transport a broad range of major and minor bulk cargoes,
including iron ore, coal, grain, cement and fertilizer, along worldwide shipping
routes. As of March 31, 2009, we own and operate a modern fleet of 25 Handymax
dry bulk vessels, 22 of which are of the Supramax class. We also have a Supramax
newbuilding program for the construction of vessels in Japan and China. As of
March 31, 2009, we have taken delivery of five vessels and an additional 22
vessels will be constructed and are expected to be delivered into our fleet
through 2011, upon which our total fleet will consist of 47 vessels with a
combined carrying capacity of 2.55 million dwt.




We
are focused on maintaining a high quality fleet that is concentrated primarily
in one vessel type – Handymax dry bulk carriers and its sub-category of Supramax
vessels which are Handymax vessels ranging in size from 50,000 to 60,000 dwt.
These vessels have the cargo loading and unloading flexibility of on-board
cranes while offering cargo carrying capacities approaching that of Panamax dry
bulk vessels, which range in size from 60,000 to 100,000 dwt and rely on port
facilities to load and offload their cargoes. We believe that the cargo handling
flexibility and cargo carrying capacity of the Supramax class vessels make them
attractive to cargo interests and vessel charterers. The 25 vessels in our
operating fleet, with an aggregate carrying capacity of 1,296,917 deadweight
tons, have an average age of only six years compared to an average age for the
world Handymax dry dulk fleet of over 15 years.






14




Each
of our vessels is owned by us through a separate wholly owned Republic of the
Marshall Islands limited liability company.




We
maintain our principal executive offices at 477 Madison Avenue, New York, New
York 10022. Our telephone number at that address is (212) 785-2500. Our website
address is www.eagleships.com. Information contained on our website does not
constitute part of this quarterly report.




Our
financial performance since inception is based on the following key elements of
our business strategy:




(1)
            concentration
      in one vessel category: Supramax class of Handymax dry bulk vessels, which
      we believe offer size, operational and geographical advantages (over
      Panamax and Capesize vessels),




(2)
            our
      strategy is to charter our vessels primarily pursuant to one- to
      three-year time charters to allow us to take advantage of the stable cash
      flow and high utilization rates that are associated with medium to
      long-term time charters. Reliance on the spot market contributes to
      fluctuations in revenue, cash flow, and net income. On the other hand,
      time charters provide a shipping company with a predictable level of
      revenues. We have entered into time charters for all of our vessels in our
      operating fleet which range in length from approximately one to three
      years, and in the case of many of our newbuilding vessels for periods up
      to December 2018. Our time charters provide for fixed semi-monthly
      payments in advance. We believe this strategy is effective in strong and
      weak dry bulk markets, giving us security and predictability of cashflows
      when we look at the volatility of the shipping
  markets,




(3)
            maintain
      high quality vessels and improve standards of operation through improved
      environmental procedures, crew training and maintenance and repair
      procedures, and




(4)
            maintain
      a balance between purchasing vessels as market conditions and
      opportunities arise and maintaining prudent financial ratios (e.g.
      leverage ratio).




We
have employed all of our vessels in our operating fleet on time charters. During
the three months ended March 31, 2009, we took delivery of two newbuilding
vessels, CRESTED EAGLE and STELLAR EAGLE, which promptly entered into their
respective charters. The following table represents certain information about
the Company's revenue earning charters on its operating fleet:






Vessel
                    Year Built
                    Dwt
                    Time
      Charter Expiration(1)
                    Daily
      Time
                      Charter Hire RateCardinal
      (2)
                    2004
                    55,362
                    June
      to September 2009
                    $12,000Condor
                    2001
                    50,296
                    May
      to July 2010
                    $22,000Falcon
      (3)
                    2001
                    51,268
                    April
      to June 2010
                    $39,500Griffon
      (4)
                    1995
                    46,635
                    February
      2010 to May 2010
                    $9,500Harrier
      (5)
                    2001
                    50,296
                    June
      2009 to September 2009
                    $24,000Hawk
      I (6)
                    2001
                    50,296
                    May
      2009 to June 2009
                    $12,800Heron
      (7)
                    2001
                    52,827
                    January
      2011 to May 2011
                    $26,375Jaeger
      (8)
                    2004
                    52,248
                    October
      2009 to January 2010
                    $10,100Kestrel
      I (9)
                    2004
                    50,326
                    March
      2010 to July 2010
                    $11,500Kite
      (10)
                    1997
                    47,195
                    September
      2009 to January 2010
                    $9,500Merlin
      (11)
                    2001
                    50,296
                    December
      2010 to March 2011
                    $25,000Osprey
      I (12)
                    2002
                    50,206
                    October
      2009 to December 2009
                    $25,000Peregrine
      (13)
                    2001
                    50,913
                    December
      2009 to March 2010
                    $8,500Sparrow
      (14)
                    2000
                    48,225
                    February
      2010 to May 2010
                    $10,000Tern
      (15)
                    2003
                    50,200
                    December
      2009 to March 2010
                    $8,500Shrike
                    2003
                    53,343
                    April
      2009 to July 2009
                    $24,600May
      2010 to Aug 2010
                    $25,600Skua
                    2003
                    53,350
                    May
      2009 to August 2009
                    $24,200Kittiwake
                    2002
                    53,146
                    July
      2009 to September 2009
                    $56,250Goldeneye
                    2002
                    52,421
                    May
      2009 to July 2009
                    $61,000Wren
      (16)
                    2008
                    53,349
                    Feb
      2012
                      Feb
      2012 to Dec 2018/Apr 2019
                    $24,750
                      $18,000
      (with
                      profit
      share)Redwing
                    2007
                    53,411
                    August
      2009 to October 2009
                    $50,000Woodstar
      (17)
                    2008
                    53,390
                    Jan
      2014
                      Jan
      2014 to Dec 2018/Apr 2019
                    $18,300
                      $18,000
      (with
                      profit
      share)Crowned
      Eagle
                    2008
                    55,940
                    September
      2009 – December 2009
                    $16,000Crested
      Eagle (18)
                    2009
                    55,989
                    December
      2009 – March 2010
                    $10,500Stellar
      Eagle
                    2009
                    55,989
                    February
      2010 – May 2010
                    $12,000




15







(1)
            The
      date range provided represents the earliest and latest date on which the
      charterer may redeliver the vessel to the Company upon the termination of
      the charter. The time charter hire rates presented are gross daily charter
      rates before brokerage commissions, ranging from 1.25% to 6.25%, to third
      party ship brokers.




(2)
            In
      March 2009, the charterer of the CARDINAL paid in advance for the duration
      of the charter an amount equal to the difference between the prevailing
      daily charter rate of $62,000 and a new rate of $12,000 per day. This
      amount has been recorded in Deferred Revenue in the Company's financial
      statements and is being recognized into revenue ratably over the charter
      period such that the daily charter rate remains effectively $62,000 per
      day. The cash payment received by the Company has been adjusted by a
      present value interest rate factor of
3%.




(3)
            The
      charterer of the FALCON has an option to extend the charter period by 11
      to 13 months at a daily time charter rate of
  $41,000.




(4)
            In
      March 2009, upon completion of the previous time charter, the GRIFFON
      commenced a new short term charter at $10,500 per day. Upon completion of
      this charter, the vessel will enter a new charter for 11 to 13 months at a
      rate of $9,500 per day




(5)
            The
      daily rate for the HARRIER is $27,000 for the first year and $21,000 for
      the second year. Revenue recognition is based on an average daily rate of
      $24,000.




(6)
            In
      March 2009, upon completion of the previous time charter, the HAWK
      commenced a new short term charter at $12,800 per
  day




(7)
            The
      charterer of the HERON has an option to extend the charter period by 11 to
      13 months at a time charter rate of $27,375 per day. The charterer has a
      second option for a further 11 to 13 months at a time charter rate of
      $28,375 per day.




(8)
            In
      December 2008, the JAEGER commenced a charter for one year at an average
      daily rate of approximately $10,100 based on a charter rate of $5,000 per
      day for the first 50 days and $11,000 per day for the balance of the
      year.




(9)
            In
      January 2009, upon completion of the previous time charter, the KESTREL
      entered into two short term positioning charters prior to its scheduled
      drydocking in April 2009. The vessel first earned $8,500 per day in
      February 2009 and then earned $18,000 per day for the remainder of the
      quarter. Upon completion of the drydocking survey, the vessel will enter a
      new charter for 11 to 13 months at a rate of $11,500 per
    day




(10)
            In
      March 2009, the charterer of the KITE paid in advance for the duration of
      the charter an amount equal to the difference between the prevailing daily
      charter rate of $21,000 and a new rate of $9,500 per day. This amount has
      been recorded in Deferred Revenue in the Company's financial statements
      and is being recognized into revenue ratably over the charter period such
      that the daily charter rate remains effectively $21,000 per day. The cash
      payment received by the Company has been adjusted by a present value
      interest rate factor of 3%.




(11)
            The
      daily rate for the MERLIN is $27,000 for the first year, $25,000 for the
      second year and $23,000 for the third year. Revenue recognition is based
      on an average daily rate of
$25,000.




(12)
            The
      charterer of the OSPREY has an option to extend the charter period by 11
      to 13 months at a time charter rate of $25,000 per
  day.




(13)
            In
      January 2009, upon completion of the previous time charter, the PEREGRINE
      commenced a new charter at $8,500 per
day.




(14)
            In
      March 2009, the charterer of the SPARROW paid in advance for the duration
      of the charter an amount equal to the difference between the prevailing
      daily charter rate of $34,500 and a new rate of $10,000 per day. This
      amount has been recorded in Deferred Revenue in the Company's financial
      statements and is being recognized into revenue ratably over the charter
      period such that the daily charter rate remains effectively $34,500 per
      day. The cash payment received by the Company has been adjusted by a
      present value interest rate factor of
3%.




(15)
            In
      January 2009, upon completion of the previous time charter, the TERN
      commenced a new charter at $8,500 per
day.




(16)
            The
      WREN has entered into a long-term charter. The charter rate until February
      2012 is $24,750 per day. Subsequently, the charter until redelivery in
      December 2018 to April 2019 will be profit share based. The base charter
      rate will be $18,000 with a 50% profit share for earned rates over $22,000
      per day. Revenue recognition for the base rate from commencement of the
      charter is based on an average daily base rate of
  $20,306.




(17)
            The
      WOODSTAR has entered into a long-term charter. The charter rate until
      January 2014 is $18,300 per day. Subsequently, the charter until
      redelivery in December 2018 to April 2019 will be profit share based. The
      base charter rate will be $18,000 with a 50% profit share for earned rates
      over $22,000 per day. Revenue recognition for the base rate from
      commencement of the charter is based on an average daily base rate of
      $18,152.




(18)
            The
      charterer of the CRESTED EAGLE has an option to extend the charter period
      by 11 to 13 months at a base time charter rate of $11,500 plus 50% of the
      difference between the base rate and the BSI time charter average
      (provided the BSI TC average is greater than the base rate). The profit
      share to be calculated each month based on the trailing BSI TC average for
      the month.




The
following table, as of March 31, 2009, represents certain information about the
Company's newbuilding vessels being constructed and their employment upon
delivery:






16






Vessel
                              Dwt
                              Year Built - Expected Delivery(1)
                              Time
      Charter Employment Expiration(2)
                              Daily Time Charter Hire Rate(3)
                              Profit ShareThrasher
                              53,100
                              Nov
      2009
                              Feb
      2016
                              $18,400
                              —Feb
      2016 to Dec 2018/Apr 2019
                              $18,000
                              50%
      over $22,000Avocet
                              53,100
                              Dec
      2009
                              Mar
      2016
                              $18,400
                              —Mar
      2016 to Dec 2018/Apr 2019
                              $18,000
                              50%
      over $22,000Bittern
                              58,000
                              Sep
      2009
                              Dec
      2014
                              $18,850
                              —Dec
      2014 to Dec 2018/Apr 2019
                              $18,000
                              50%
      over $22,000Canary
                              58,000
                              Oct
      2009
                              Jan
      2015
                              $18,850
                              —Jan
      2015 to Dec 2018/Apr 2019
                              $18,000
                              50%
      over $22,000Crane
                              58,000
                              Nov
      2009
                              Feb
      2015
                              $18,850
                              —Feb
      2015 to Dec 2018/Apr 2019
                              $18,000
                              50%
      over $22,000Egret
      (4)
                              58,000
                              Dec
      2009
                              Sep
      2012 to Jan 2013
                              $17,650
                              50%
      over $20,000Golden
      Eagle
                              56,000
                              Jan
      2010
                              Charter
      Free
                              —
                              —Gannet
      (4)
                              58,000
                              Jan
      2010
                              Oct
      2012 to Feb 2013
                              $17,650
                              50%
      over $20,000Grebe(4)
                              58,000
                              Feb
      2010
                              Nov
      2012 to Mar 2013
                              $17,650
                              50%
      over $20,000Imperial
      Eagle
                              56,000
                              Feb
      2010
                              Charter
      Free
                              —
                              —Ibis(4)
                              58,000
                              Mar
      2010
                              Dec
      2012 to Apr 2013
                              $17,650
                              50%
      over $20,000Jay
                              58,000
                              Apr
      2010
                              Sep
      2015
                              $18,500
                              50%
      over $21,500Sep
      2015 to Dec 2018/Apr 2019
                              $18,000
                              50%
      over $22,000Kingfisher
                              58,000
                              May
      2010
                              Oct
      2015
                              $18,500
                              50%
      over $21,500Oct
      2015 to Dec 2018/Apr 2019
                              $18,000
                              50%
      over $22,000Martin
                              58,000
                              Jun
      2010
                              Dec
      2016 to Dec 2017
                              $18,400
                              —Thrush
                              53,100
                              Nov
      2010
                              Charter
      Free
                              —
                              —Nighthawk
                              58,000
                              Mar
      2011
                              Sep
      2017 to Sep 2018
                              $18,400
                              —Oriole
                              58,000
                              Jul
      2011
                              Jan
      2018 to Jan 2019
                              $18,400
                              —Owl
                              58,000
                              Aug
      2011
                              Feb
      2018 to Feb 2019
                              $18,400
                              —Petrel
      (4)
                              58,000
                              Sep
      2011
                              Jun
      2014 to Oct 2014
                              $17,650
                              50%
      over $20,000Puffin
      (4)
                              58,000
                              Oct
      2011
                              Jul
      2014 to Nov 2014
                              $17,650
                              50%
      over $20,000Roadrunner
      (4)
                              58,000
                              Nov
      2011
                              Aug
      2014 to Dec 2014
                              $17,650
                              50%
      over $20,000Sandpiper
      (4)
                              58,000
                              Dec
      2011
                              Sep
      2014 to Jan 2015
                              $17,650
                              50%
      over $20,000CONVERTED
      INTO OPTIONSSnipe
      (6)
                              58,000
                              Jan
      2012
                              Charter
      Free
                              —
                              —Swift
      (6
                              58,000
                              Feb
      2012
                              Charter
      Free
                              —
                              —Raptor
      (6)
                              58,000
                              Mar
      2012
                              Charter
      Free
                              —
                              —Saker
      (6)
                              58,000
                              Apr
      2012
                              Charter
      Free
                              —
                              —Besra
      (5,6)
                              58,000
                              Oct
      2011
                              Charter
      Free
                              —
                              —Cernicalo
      (5,6)
                              58,000
                              Jan
      2011
                              Charter
      Free
                              —
                              —Fulmar
      (5,6)
                              58,000
                              Jul
      2011
                              Charter
      Free
                              —
                              —Goshawk
      (5,6)
                              58,000
                              Sep
      2011
                              Charter
      Free
                              —
                              —


(1)
            Vessel
      build and delivery dates are estimates based on guidance received from
      shipyard.




(2)
            The
      date range represents the earliest and latest date on which the charterer
      may redeliver the vessel to the Company upon the termination of the
      charter.




(3)
            The
      time charter hire rate presented are gross daily charter rates before
      brokerage commissions ranging from 1.25% to 6.25% to third party ship
      brokers.




(4)
            The
      charterer has an option to extend the charter by 2 periods of 11 to 13
      months each.




(5)
            Options
      for construction declared on December 27,
2007.




(6)
            Firm
      contracts converted to options in December
2008.






17




Fleet
Management





The
management of our fleet includes the following functions:




·
            Strategic management.
      We locate, obtain financing and insurance for, purchase and sell
      vessels.


·
            Commercial management.
      We obtain employment for our vessels and manage our relationships with
      charterers.


·
            Technical management.
      The technical manager performs day-to-day operations and maintenance of
      our vessels.





Commercial
      and Strategic Management





We
carry out the commercial and strategic management of our fleet through our
wholly owned subsidiary, Eagle Shipping International (USA) LLC, a Republic of
the Marshall Islands limited liability company that maintains its principal
executive offices in New York City. We currently have a total of twenty seven
shore based personnel, including our senior management team and our office
staff, who either directly or through this subsidiary, provides the following
services:




·
            commercial
      operations and technical
supervision;




·
            safety
      monitoring;




·
            vessel
      acquisition; and




·
            financial,
      accounting and information technology
services.




Technical
      Management





The
technical management of our fleet is provided by our unaffiliated third party
technical managers, V.Ships, Wilhelmsen Ship Management, and Anglo Eastern
International Ltd., that we believe are three of the world's largest providers
of independent ship management and related services. In conjunction with our
management, V. Ships, Wilhelmsen, and Anglo Eastern International Ltd., we have
established an operating expense budget for each vessel. All deviations from the
budgeted amounts are for our account. We review the performance of our technical
managers on an ongoing basis and may add or change technical
managers.




Our
technical managers are paid a fixed management fee for each vessel in our
operating fleet for the technical management services provided. For the
three-month periods ended March 31, 2009 and 2008, the technical management fee
averaged $9,173 and $9,623 per vessel per month, respectively. Management fees
paid to our technical managers are recorded under Vessel Expenses.




Value
of Assets and Cash Requirements





The
replacement costs of comparable new vessels may be above or below the book value
of our fleet. The market value of our fleet may be below book value when market
conditions are weak and exceed book value when markets conditions are strong.
Customary with industry practice, we may consider asset redeployment which at
times may include the sale of vessels at less than their book
value.




The
Company's results of operations and cash flow may be significantly affected by
future charter markets.




Critical
Accounting Policies




The
discussion and analysis of our financial condition and results of operations is
based upon our interim, unaudited, consolidated financial statements, which have
been prepared in accordance with accounting principles generally accepted in the
United States, and the rules and regulations of the SEC which apply to interim
financial statements. The preparation of those financial statements requires us
to make estimates and judgments that affect the reported amounts of assets and
liabilities, revenues and expenses and related disclosure of contingent assets
and liabilities at the date of our financial statements. Actual results may
differ from these estimates under different assumptions and
conditions.




Critical
accounting policies are those that reflect significant judgments of
uncertainties and potentially result in materially different results under
different assumptions and conditions. As the discussion and analysis of our
financial condition and results of operations is based upon our interim,
unaudited, consolidated financial statements, they do not include all of the
information on critical accounting policies normally included in consolidated
financial statements. Accordingly, a detailed description of these critical
accounting policies should be read in conjunction with the consolidated
financial statements and notes thereto included in the Company's Annual Reports
on Form 10-K. There have been no material changes from the "Critical Accounting
Policies" previously disclosed in our Form 10-K for the year ended December 31,
2008.






18




Results
of Operations for the three month periods ended March 31, 2009 and
2008:




Fleet
Data




We
believe that the measures for analyzing future trends in our results of
operations consist of the following:




Three
      Months EndedMarch 31, 2009
                  March 31, 2008Ownership
      Days
                  2,138
                  1,638Available
      Days
                  2,137
                  1,638Operating
      Days
                  2,128
                  1,633Fleet
      Utilization
                  99.6%
                  99.7%




·           Ownership days:  We define ownership days
as the aggregate number of days in a period during which each vessel in our
fleet has been owned by us. Ownership days are an indicator of the size of our
fleet over a period and affect both the amount of revenues and the amount of
expenses that we record during a period.  Ownership days for the three
month period ended March 31, 2009, increased 31% from the corresponding period
in 2008 as we operated 25 vessels in the first quarter of 2009 compared to 18
vessels in the corresponding period in 2008.




·           Available
days:  We define available days as the number of our ownership
days less the aggregate number of days that our vessels are off-hire due to
vessel familiarization upon acquisition, scheduled repairs or repairs under
guarantee, vessel upgrades or special surveys and the aggregate amount of time
that we spend positioning our vessels. The shipping industry uses available days
to measure the number of days in a period during which vessels should be capable
of generating revenues.  During the three-month period ended March 31,
2009, the Company did not drydock any vessels, but incurred a total of one day
of off-hire for vessel familiarization upon delivery of the Crested Eagle and
Stellar Eagle which joined the fleet in January and March 2009,
respectively.




·           Operating
days:  We define operating days as the number of our available
days in a period less the aggregate number of days that our vessels are off-hire
due to any reason, including unforeseen circumstances. The shipping industry
uses operating days to measure the aggregate number of days in a period during
which vessels actually generate revenues.




·           Fleet
utilization:  We calculate fleet utilization by dividing the
number of our operating days during a period by the number of our available days
during the period. The shipping industry uses fleet utilization to measure a
company's efficiency in finding suitable employment for its vessels and
minimizing the amount of days that its vessels are off-hire for reasons other
than scheduled repairs or repairs under guarantee, vessel upgrades, special
surveys or vessel positioning. Our fleet continues to perform at high
utilization rates.




Revenues




All
of our vessels are employed on time charters. Our time charter equivalent
("TCE") rate is equal to the time charter rate. As is common in the shipping
industry, we pay commissions ranging from 1.25% to 6.25% of the total daily
charter hire rate of each charter to unaffiliated ship brokers and in-house
brokers associated with the charterers, depending on the number of brokers
involved with arranging the charter.




Gross
time charter revenues in the quarter ended March 31, 2009 were $58,621,700, an
increase of 52% from $38,610,921 recorded in the comparable quarter in 2008,
primarily due to the operation of a larger fleet and higher daily time charter
rates. Gross revenues recorded in the 2009 quarter include an amount of $649,731
relating to the non-cash amortization of fair value below contract value of time
charters acquired. Brokerage commissions incurred on revenues earned in the
first quarters of 2009 and 2008 were $2,644,034 and $1,924,905, respectively.
Net revenues during the quarter ended March 31, 2009, increased 53% to
$55,977,666 from $36,686,016 in the comparable quarter in 2008.






19




Vessel
Expenses




Vessel
expenses for the three month period ended March 31, 2009, were $13,071,197
compared to $7,991,261 in the comparable quarter in 2008. The increase in vessel
expense is attributable to a larger fleet size in operation for the first
quarter of 2009, higher insurance costs, and the timing of purchases of
consumable stores and spares. Vessel expenses for the three month period ended
March 31, 2009, included $12,428,975 in vessel operating costs and $642,222 in
technical management fees. Vessel expenses for the comparable period in 2008
included $7,439,959 in vessel operating costs and $551,302 in technical
management fees.




Vessel
operating expenses include crew wages and related costs, the cost of insurance,
expenses relating to repairs and maintenance, the cost of spares and consumable
stores and related inventory, tonnage taxes, pre-operating costs associated with
the delivery of acquired vessels including providing the newly acquired vessels
with initial provisions and stores, other miscellaneous expenses, and technical
management fees paid to our third party managers.




Our
vessel expenses will increase with the enlargement of our fleet. Other factors
beyond our control, some of which may affect the shipping industry in general,
may also cause these expenses to increase, including, for instance, developments
relating to market prices for crew, insurance and petroleum-based lubricants and
supplies.




Depreciation
and Amortization




For
the three-month periods ended March 31, 2009 and 2008, total depreciation and
amortization expense were $10,290,916 and $7,336,039, respectively. Total
depreciation and amortization expense for the three-month period ended March 31,
2009 includes $9,694,910 of vessel depreciation and $596,006 relating to the
amortization of deferred drydocking costs. Comparable amounts for the
three-month period ended March 31, 2008 were $6,708,415 of vessel depreciation
and $627,624 of amortization of deferred drydocking costs.




The
cost of our vessels is depreciated on a straight-line basis over the expected
useful life of each vessel. Depreciation is based on the cost of the vessel less
its estimated residual value. We estimate the useful life of our vessels to be
28 years from the date of initial delivery from the shipyard to the original
owner. Furthermore, we estimate the residual values of our vessels to be $150
per lightweight ton, which we believe is common in the dry bulk shipping
industry. Our depreciation charges will increase as our fleet is enlarged.
Drydocking relates to our regularly scheduled maintenance program necessary to
preserve the quality of our vessels as well as to comply with international
shipping standards and environmental laws and regulations. Management
anticipates that vessels are to be drydocked every two and a half years and,
accordingly, these expenses are deferred and amortized over that
period.




Amortization
of deferred financing costs which relate to the vessels on the water is included
in interest expense. These financing costs relate to costs associated with our
revolving credit facility and these are amortized over the life of the facility.
For the three-month periods ended March 31, 2009 and 2008, the amortization of
deferred financing costs allocated to the vessels on the water was
$240,057 and $61,907, respectively.




General
and Administrative Expenses




Our
general and administrative expenses include onshore vessel administration
related expenses such as legal and professional expenses and administrative and
other expenses including payroll and expenses relating to our executive officers
and office staff, office rent and expenses, directors fees, and directors and
officers insurance. General and administrative expenses also include non-cash
compensation expenses.




General
and administrative expenses for the three month periods ended March 31, 2009 and
2008 were $8,903,028 and $5,049,159, respectively. These general and
administrative expenses include a non-cash compensation component of $3,896,284
and $2,515,703, respectively. The increase in general and administrative
expenses for the three-month period ended March 31, 2009, is primarily
attributable to expenses, including accruals of compensation expense
(performance-based compensation and amortization of restricted stock awards and
stock option compensation), and by administrative costs associated with
operating a larger fleet and the extensive newbuilding program.






20




Capitalized
Interest




At
March 31, 2009, we had contracts for the construction of 22 newbuilding vessels
which are expected to be delivered through 2011. Interest costs on borrowings
used to fund the Company's newbuilding program are capitalized as part of the
cost of the newbuilding vessels until the vessels are delivered.




For
the three-month period
ended March 31, 2009, capitalized interest amounted to $6,779,318 ($6,322,705 in
interest and $456,613 in amortization of deferred financing costs)and this
amount has been recorded and included in Advances for Vessel Construction in the
financial statements. For the corresponding three months period in 2008,
capitalized interest amounted to $6,123,115 ($5,711,682 in interest and $411,433
in amortization of deferred financing costs).




EBITDA




EBITDA
represents operating earnings before extraordinary items, depreciation and
amortization, interest expense, and income taxes, if any. EBITDA is included
because it is used by certain investors to measure a company's financial
performance. EBITDA is not an item recognized by GAAP and should not be
considered a substitute for net income, cash flow from operating activities and
other operations or cash flow statement data prepared in accordance with
accounting principles generally accepted in the United States or as a measure of
profitability or liquidity. EBITDA is presented to provide additional
information with respect to the Company's ability to satisfy its obligations
including debt service, capital expenditures, and working capital requirements.
While EBITDA is frequently used as a measure of operating results and the
ability to meet debt service requirements, the definition of EBITDA used here
may not be comparable to that used by other companies due to differences in
methods of calculation.




Our
revolving credit facility permits us to pay dividends in amounts up to our
cumulative free cash flows which is our earnings before extraordinary or
exceptional items, interest, taxes, depreciation and amortization (Credit
Agreement EBITDA), less the aggregate amount of interest incurred and net
amounts payable under interest rate hedging agreements during the relevant
period and an agreed upon reserve for dry-docking. Therefore, we believe that
this non-GAAP measure is important for our investors as it reflects our ability
to pay dividends. The following table is a reconciliation of net income, as
reflected in the consolidated statements of operations, to the Credit Agreement
EBITDA:




Three
      Months EndedMarch
      31, 2009
                              
                              
                              March
      31, 2008Net
      Income
                              
                              $
                              17,236,781
                              
                              
                              $
                              14,345,810Interest
      Expense
                              
                              
                              6,486,317
                              
                              
                              
                              3,350,253Depreciation
      and Amortization
                              
                              
                              10,290,916
                              
                              
                              
                              7,336,039Amortization
      of fair value (below) above market of time charter
acquired
                              
                              
                              (649,731
                              )
                              
                              
                              —EBITDA
                              
                              
                              33,364,283
                              
                              
                              
                              25,032,102Adjustments
      for Exceptional Items:Non-cash
      Compensation Expense (1)
                              
                              
                              3,896,284
                              
                              
                              
                              2,515,703Credit
      Agreement EBITDA
                              
                              $
                              37,260,567
                              
                              
                              $
                              27,547,805







(1)Stock
      based compensation related to stock options and  restricted
      stock units (see Notes to our financial
  statements).






21





Effects
of Inflation




We
do not believe that inflation has had or is likely, in the foreseeable future,
to have a significant impact on vessel operating expenses, drydocking expenses
or general and administrative expenses.




Liquidity
and Capital Resources




Net
cash provided by operating activities during the three month periods ended March
31, 2009 and 2008, was $43,024,179 and $26,454,362, respectively. The increase
was primarily due to cash generated from the operation of the fleet for 2,138
days in the three month period ended March 31, 2009, compared to 1,638 days
during the same period in 2008, and $13,312,978 relating to deferred revenue
advances from a charterer.




Net
cash used in investing activities during the three month period ended March 31,
2009, was $44,271,329, compared to $13,399,474 during the corresponding three
month period ended March 31, 2008. Investing activities during the three month
period ended March 31, 2009 related primarily to making progress payments for
the newbuilding vessels and incurring related vessel construction
expenses.




Net
cash used by financing activities during the three month period ended March 31,
2009, was $10,935,046, compared to net cash provided by financing activities of
$17,445,157 during the corresponding three month period ended March 31, 2008.
Financing activities during the three month period ended March 31, 2009,
primarily involved borrowings of $12,875,000 from our revolving credit
facility.  Financing activities during the three month period ended
March 31, 2008, primarily involved borrowings of $6,630,000 and payment of
$23,378,577 in dividends.




As
of March 31, 2009, our cash balance was $18,896,758, compared to a cash balance
of $9,208,862 at December 31, 2008. In addition, $12,500,000 in cash deposits
are maintained with our lender for loan compliance purposes and this amount is
recorded in Restricted cash in our financial statements as of March 31, 2009.
Also recorded in Restricted Cash is an amount of $276,056, which is
collateralizing a letters of credit relating to our office leases.




In
December 2008, our revolving credit facility was amended to $1,350,000,000 (See
section in the Company's 2008 Annual Report on Form 10-K entitled "Revolving
Credit Facility" for a description of the facility and its amendments). As of
March 31, 2009, borrowings under this facility aggregated $802,476,403. The
facility also provides us with the ability to borrow up to $20,000,000 for
working capital purposes. We were in compliance with all of the covenants
contained in our debt agreements as of March 31, 2009. We anticipate that our
current financial resources, together with cash generated from operations and,
if necessary, borrowings under our revolving credit facility will be sufficient
to fund the operations of our fleet, including our working capital requirements,
for the foreseeable future. We will rely on operating cash flows as well as our
revolving credit facility and possible additional equity and debt financing
alternatives to fund our long term capital requirements for vessel construction
and implement future growth plans.




On
December 17, 2008, the Company entered into a second amendatory agreement to its
$1,600,000,000 revolving credit facility. Among other things, the agreement
reduces the amount of the credit facility to $1,350,000,000, amends the minimum
security cover definition in the credit facility to include the installment
payments on its newbuilding contracts and reduces the minimum security value
clause of the credit facility from 130% to 100% of the aggregate principal
amount of debt outstanding under the credit facility. The agreement also
provides, however, that future dividend payments will be based on maintaining a
minimum security value of 130%. In addition, it increases the interest margin to
1.75% over LIBOR, but also reduces the minimum net worth clause of the credit
facility from $300,000,000 to $75,000,000 for 2009, subject to annual review
thereafter. The Company intends to work with its lenders to obtain additional
modifications to the agreement during 2009. Depending on developments in the
market, failure to achieve such modifications could result in non compliance
with one or more covenants, which could cause the lenders to accelerate
repayment of the facility and exercise their lien on our vessels, earnings and
insurance. Such modifications could also result in additional fees and
costs.




Our
loan agreements for our borrowings are secured by liens on our vessels and
contain various financial covenants. The covenants relate to our financial
position, operating performance and liquidity. The market value of drybulk
vessels is sensitive, among other things, to changes in the drybulk charter
market. The recent general decline in the drybulk carrier charter market has
resulted in lower charter rates for vessels in the drybulk market. The decline
in charter rates in the drybulk market coupled with the prevailing difficulty in
obtaining financing for vessel purchases have adversely affected drybulk vessel
values. A continuation of these conditions,






22






could
lead to a significant decline in the fair market values of our vessels, which
could impact our compliance with these loan covenants. The recent developments
in the credit markets and related impact on the drybulk charter market and have
also resulted in additional risks. The occurrence of one or more of these risk
factors could adversely affect our results of operations or financial condition.
Please refer to the section entitled "Risk Factors" in Part II of this document
which should be read in conjunction with the risk factors included in the
Company's 2008 Annual Report on Form 10-K.




Dividends




Our
amended revolving credit facility permits us to pay quarterly dividends in
amounts up to cumulative free cash flows which is our quarterly earnings before
extraordinary or exceptional items, interest, taxes, depreciation and
amortization (Credit Agreement EBITDA), less the aggregate amount of interest
incurred and net amounts payable under interest rate hedging agreements during
the relevant period and an agreed upon reserve for drydocking for the period,
provided that there is not a default or breach of loan covenant under the credit
facility and the payment of the dividends would not result in a default or
breach of a loan covenant. Depending on market conditions in the dry bulk
shipping industry and acquisition opportunities that may arise, we may be
required to obtain additional debt or equity financing which could affect our
dividend policy. In this connection, the drybulk market has recently declined
substantially. In December 2008, commencing with the fourth quarter of 2008, the
Company's board of directors  determined to suspend the payment of
dividends to stockholders in order to increase cash flow, optimize financial
flexibility and enhance internal growth.  In the future, the
declaration and payment of dividends, if any, will always be subject to the
discretion of the board of directors, restrictions contained in the amended
credit facility and the requirements of Marshall Islands law. The timing and
amount of any dividends declared will depend on, among other things, the
Company's earnings, financial condition and cash requirements and availability,
the ability to obtain debt and equity financing on acceptable terms as
contemplated by the Company's growth strategy, the terms of its outstanding
indebtedness and the ability of the Company's subsidiaries to distribute funds
to it.




The
Company did not make any dividend payments in the first quarter of 2009. In the
comparable quarter in 2008, the Company paid a cash dividend for the fourth
quarter of 2007 of $0.50 per share. The aggregate amount of this cash dividend
was $23,378,577 and was paid on March 18, 2008 to all shareholders of record as
of March 13, 2008.




Contractual
Obligations




The
following table sets forth our expected contractual obligations and their
maturity dates as of March 31, 2009:




(in
      thousands of U.S. dollars)
                              
                              Within
                                One Year
                              
                              
                              One
      to
                                Three Years
                              
                              
                              Three
      to
                                Five Years
                              
                              
                              More
      than
                                Five years
                              
                              
                              TotalVessels
      (1)
                              
                              $
                              308,978
                              
                              
                              $
                              281,763
                              
                              
                              
                              —
                              
                              
                              
                              —
                              
                              
                              $
                              590,741Bank
      Loans
                              
                              
                              —
                              
                              
                              
                              —
                              
                              
                              
                              —
                              
                              
                              $
                              802,476
                              
                              
                              
                              802,476Interest
      and borrowing fees (2)
                              
                              
                              51,881
                              
                              
                              
                              103,904
                              
                              
                              
                              103,620
                              
                              
                              
                              168,862
                              
                              
                              
                              428,267Office
      lease (3)
                              
                              
                              649
                              
                              
                              
                              1,484
                              
                              
                              
                              1,670
                              
                              
                              
                              3,480
                              
                              
                              
                              7,283Total
                              
                              $
                              361,508
                              
                              
                              $
                              387,151
                              
                              
                              $
                              105,290
                              
                              
                              $
                              974,818
                              
                              
                              $
                              1,828,767





(1)
            The
      balance of the contract price in US dollars for the 22 newbuilding vessels
      which are to be constructed and delivered between 2009 and 2011. Two of
      the newbuilding vessels are priced in Japanese
  yen.


(2)
            The
      Company is a party to floating-to-fixed interest rate swaps covering
      aggregate notional amount of $771,529,273. Interest and borrowing fees
      includes capitalized interest for the newbuilding
  vessels.


(3)
            Remainder
      of the lease on the office space which we
  occupy.






23





Capital
Expenditures




Our
capital expenditures relate to the purchase of vessels and capital improvements
to our vessels which are expected to enhance the revenue earning capabilities
and safety of these vessels.




We
make capital expenditures from time to time in connection with our vessel
acquisitions. As of March 31, 2009, our fleet consists of 25 vessels which are
currently operational and 22 newbuilding vessels which have been contracted for
construction.




In
addition to acquisitions that we may undertake in future periods, the Company's
other major capital expenditures include funding the Company's maintenance
program of regularly scheduled drydocking necessary to preserve the quality of
our vessels as well as to comply with international shipping standards and
environmental laws and regulations. Although the Company has some flexibility
regarding the timing of its dry docking, the costs are relatively predictable.
Management anticipates that vessels are to be drydocked every two and a half
years. Funding of these requirements is anticipated to be met with cash from
operations. We anticipate that this process of recertification will require us
to reposition these vessels from a discharge port to shipyard facilities, which
will reduce our available days and operating days during that
period.




Drydocking
costs incurred are amortized to expense on a straight-line basis over the period
through the date the next drydocking for those vessels are scheduled to occur.
We did not drydock any vessels in the three months ended March 31, 2009. The
following table represents certain information about the estimated costs for
anticipated vessel drydockings in the next four quarters, along with the
anticipated off-hire days:




Quarter Ending
                  Off-hire
      Days(1)
                  Projected
      Costs(2)June
      30, 2009
                  44
                  $1.00
      millionSeptember
      30, 2009
                  44
                  $1.00
      millionDecember
      31, 2009
                  44
                  $1.00
      millionMarch
      31, 2010
                  44
                  $1.00
      million(1)Actual
      duration of drydocking will vary based on the condition of the vessel,
      yard schedules and other
                    factors.
                    (2)Actual
      costs will vary based on various factors, including where the drydockings
      are actually
performed.







Off-balance
Sheet Arrangements




We
do not have any off-balance sheet arrangements.




24


Item
3. Quantitative and Qualitative Disclosures about Market Risk




Interest
Rate Risk




There
have been no material changes from the "Interest Rate Risk" previously disclosed
in our Form 10-K for the year ended December 31, 2008.




Currency
and Exchange Rates




There
have been no material changes from the "Currency and Exchange Rates" risk
previously disclosed in our Form 10-K for the year ended December 31,
2008.




Item 4. Controls and Procedures




Disclosure
Controls and Procedures




Our
management, including our Chief Executive Officer and Chief Financial Officer,
has evaluated the effectiveness of our disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of
1934, as amended, (the "Exchange Act")) as of the end of the period covered by
this report. Based upon that evaluation, our Chief Executive Officer and Chief
Financial Officer have concluded that, as of the end of such period, our
disclosure controls and procedures are effective.




Internal
Control Over Financial Reporting




There
have been no changes in our internal control over financial reporting during the
period covered by this report that have materially affected, or are reasonably
likely to materially affect, our internal control over financial
reporting.





25


PART
II: OTHER INFORMATION




Item
1 - Legal Proceedings




We
are not aware of any legal proceedings or claims to which we or our subsidiaries
are party or of which our property is subject. From time to time in the future,
we may be subject to legal proceedings and claims in the ordinary course of
business, principally personal injury and property casualty claims. Those
claims, even if lacking merit, could result in the expenditure by us of
significant financial and managerial resources.




Item
1A – Risk Factors




There
have been no material changes from the "Risk Factors" previously disclosed in
our Form 10-K for the year ended December 31, 2008.




Item
2 – Unregistered Sales of Equity Securities and Use of Proceeds




None.




Item
3 - Defaults upon Senior Securities




None.




Item
4 - Submission of Matters to a Vote of Security Holders




None.




Item
5 - Other Information




None.




Item
6 – Exhibits






EXHIBIT INDEX




3.1
                                        Amended
      and Restated Articles of Incorporation of the Company 13.2
                                        Amended
      and Restated Bylaws of the Company 13.3
                                        Certificate
      of Designation, Preferences and Rights of Series A Junior Participating
      Preferred Stock  24.1
                                        Form
      of Share Certificate of the Company 14.2
                                        Form
      of Senior Indenture 34.3
                                        Form
      of Subordinated Indenture 34.4
                                        Rights
      Agreement 210.1
                                        Amended
      and Restated Employment Agreement of Mr. Sophocles N. Zoullas, dated as of
      June 19, 2008 4,610.2
                                        Amendatory
      Agreement, dated as of July 3, 2008, among the Company and certain of its
      subsidiaries and the banks and financial institutions party thereto and
      the Royal Bank of Scotland plc, as mandated lead arranger 5   26
  10.3
                                        Second
      Amendatory Agreement, dated as of December 17, 2008, among the Company and
      certain of its subsidiaries and the banks and financial institutions party
      thereto and the Royal Bank of Scotland plc, as mandated lead arranger
      731.1
                                        Rule
      13a-14(d) / 15d-14(a)_Certification of CEO31.2
                                        Rule
      13a-14(d) / 15d-14(a)_Certification of CFO32.1
                                        Section
      1350 Certification of CEO32.2
                                        Section
      1350 Certification of CFO  1Incorporated by reference to
      Amendment No.4 to the Company's Registration Statement on Form S-1,
      Registration No. 333-123817, filed on June 22, 2005.
                                            2Incorporated by reference to
      the Company's Registration Statement on Form 8-A filed on November 13,
      2007.
                                            3Incorporated by reference to
      the Company's Registration Statement on Form S-3, Registration No.
      333-139745,  filed on December 29, 2007.
                                            4Incorporated by
      reference to the Company's Current Report on Form 8-K filed on June 20,
      2008.
                                            5Incorporated by
      reference to the Company's Current Report on Form 8-K filed on July 7,
      2008.
                                            6Management
      contract or compensating plan.
                                            7Incorporated
      by reference to Exhibit 4.9 to the Company's registration statement on
      Form S-3POSASR, Registration No. 333-148417 filed on March 2,
      2009









SIGNATURES




Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.






EAGLE
BULK SHIPPING INC.




By:    /s/ Sophocles N.
Zoullas


Sophocles
N. Zoullas


Chairman
of the Board and


Chief
Executive Officer


Date:May 7, 2009









By:    /s/ Alan S.
Ginsberg


Alan
S. Ginsberg


Chief
Financial Officer


and
Principal Accounting Officer


Date: May 7, 2009




27