Document:

Exhibit 4.35

    

    

    

    
      
        

       

      

      Securities Note

      Diana Shipping Inc.

      

      

      

      

      

      9.50% USD 100,000,000 Senior Unsecured
          Callable Bond Issue 2018/2023

      ISIN: NO0010832868

      

      

      Arrangers:

       

        

        

      

      

      As Joint Lead Managers

      

      

      

      

      Athens, Greece 3 December 2018

      

      

      

      

      

      

      

      

      This Security Note does not constitute an offer to buy, subscribe
          or sell the securities described herein.

      

      

      This Securities Note combined with the Registration Document and Summary serves as a listing Prospectus as
          required by applicable laws and no securities are being offered or sold pursuant to this Prospectus.

      
        
          

      

      
      

      

      IMPORTANT INFORMATION

      The Securities Note has been prepared in connection with listing of the securities at Oslo Stock Exchange. The
          Norwegian FSA (“Finanstilsynet”) has controlled and approved the Securities Note pursuant to Section 7-7 of the Norwegian Securities Trading Act. Finanstilsynet has not controlled and approved the accuracy or completeness of the information given
          in the Securities Note. The control and approval performed by the Norwegian FSA relates solely to descriptions included by the Partnership according to a pre-defined list of content requirements. The Norwegian FSA has not undertaken any form of
          control or approval of corporate matters described in or otherwise covered by the Securities Note. The Securities Note was approved by the Norwegian FSA on 3 December 2018.

      New information that is significant for the Borrower or its subsidiaries may be disclosed after the Securities
          Note has been made public, but prior to listing of the Loan. Such information will be published as a supplement to the Securities Note pursuant to Section 7-15 of the Norwegian Securities Trading Act. On no account must the publication or the
          disclosure of the Securities Note give the impression that the information herein is complete or correct on a given date after the date on the Securities Note, or that the business activities of the Borrower or its subsidiaries may not have been
          changed.

      Only the Borrower and the Joint Lead Managers are entitled to procure information about conditions described in
          the Securities Note. Information procured by any other person is of no relevance in relation to the Securities Note and cannot be relied on.

      Unless otherwise stated, the Securities Note is subject to Norwegian law. In the event of any dispute regarding
          the Securities Note, Norwegian law will apply.

      In certain jurisdictions, the distribution of the Securities Note may be limited by law, for example in the
          United States of America or in the United Kingdom. Approval of the Securities Note by the Norwegian FSA implies that the Note may be used in any EEA country. No other measures have been taken to obtain authorization to distribute the Securities
          Note in any jurisdiction where such action is required. Persons that receive the Securities Note are ordered by the Borrower and the Co-Lead Managers to obtain information on and comply with such restrictions.

      This Securities Note is not an offer to sell or a request to buy bonds.

      The Securities Note dated 3 December 2018 together with the Registration Document dated 3 December 2018 and the
          Summary dated 3 December 2018 constitutes the Prospectus.

      The content of the Securities Note does not constitute legal, financial or tax advice and bond owners should
          seek legal, financial and/or tax advice.

      Contact the Issuer to receive copies of the Securities Note.

      

      

      Factors which are material for the purpose of assessing the market risks associated with
          Bond:

      The Bonds may not be a suitable investment for all investors. Each potential investor in the Bonds must
          determine the suitability of that investment in light of its own circumstances. In particular, each potential investor should:

      
        
          	(i)	
                  have sufficient knowledge and experience to make a meaningful evaluation of the Bonds, the merits and risks of investing in the Bonds and the information contained
                      or incorporated by reference in this Securities Note and/or Registration Document or any applicable supplement;

                

        

      

      
        
          	(ii)	
                  have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in the Bonds and
                      the impact the Bonds will have on its overall investment portfolio;

                

        

      

      
        
          	(iii)	
                  have sufficient financial resources and liquidity to bear all of the risks of an investment in the Bonds, including where the currency for principal or interest
                      payments is different from the potential investor’s currency;

                

        

      

      
        
          
            	(iv)	
                    understand thoroughly the terms of the Bonds and be familiar with the behavior of the financial markets; and

                  

          

        

      

      
        
          	(v)	
                  be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic, interest rate and other factors that may affect its
                      investment and its ability to bear the applicable risks.

                

        

      

      

      

      
        2

        
          

      

      

      

      Table of contents

      

      

      	
              1

            	
              RISK FACTORS

            	
              4

            
	
              2

            	
              Responsibility Statement

            	
              6

            
	
              3

            	
              THIRD PARTY INFORMATION

            	
              7

            
	
              4

            	
              INFORMATION CONCERNING THE SECURITIES

            	
              8

            
	
              5

            	
              ADDITIONAL INFORMATION

            	
              21

            
	
              6

            	
              APPENDIX 1: BOND AGREEMENT

            	
              22

            

      

      

      

      

      
        3

        
          

      

      

      

      
        
          	1	
                  RISK FACTORS

                

        

      

      Prior to any decision to invest in the Bonds, potential investors
          should carefully read and assess the following specific risks and the other information contained in this presentation. An investment in the bonds is suitable only for investors who understand the risk factors associated with this type of
          investment and who can afford a loss of all or part of their investment.

      If any of the risks presented below materializes, individually or
          together with other circumstances, the business, financial position and operating results of the Issuer and the Group could be materially and adversely affected and the price of the Bonds may decline, causing investors to lose all or part of
          their invested capital.

      The primary risk factors in connection with an investment in the bonds
          are described below. The description below is not exhaustive and the sequence of the risk factors is not set out according to importance. A prospective investor should carefully consider the factors set out below and elsewhere in this
          Presentation, including but not limited to the cost structure for both the Issuer and the investors, as well as the investors' current and future tax position.

      The below described risk factors are supplemented by the risks
          described under the heading “Risk Factors” in our Annual Report on Form 20-F for the year ended December 31, 2017 that summarize the risks that may materially affect the Issuer's business.

      Bond Specific Risk Factors

      
        
          	

                	●	
                  Under the terms of the Bond issue the Issuer is permitted to incur liabilities that will rank senior in priority to the Bonds, including, Inter Alia, Senior Secured Bank Debt.

                

        

      

      
        
          	

                	●	
                  Mandatory prepayment events may lead to a prepayment of the Bonds in circumstances where an investor may not be able to reinvest the prepayment
                      proceeds at an equivalent rate of interest.

                

        

      

      
        
          	

                	●	
                  Bankruptcy and insolvency proceedings may prove difficult depending on which jurisdiction proceedings are opened in, and the Issuer's liabilities
                      in respect of the Bonds may rank junior to certain of the Issuer's debts including the Issuer’s Senior Secured Bank Debt.

                

        

      

      
        
          	

                	●	
                  There will only be a limited trading market for the Bonds.

                

        

      

      
        
          	

                	●	
                  The market price of the Bonds may be volatile.

                

        

      

      
        
          	

                	●	
                  The bondholders will be subject to restrictions on transfers of the Bonds.

                

        

      

      
        
          	

                	●	
                  The terms and conditions of the Bond Terms will allow for modification of the Bonds or security, waivers or authorizations of breaches and
                      substitution of the Issuer which, in certain circumstances, may be affected without the consent of bondholders.

                

        

      

      
        
          	

                	●	
                  Legal investment considerations may restrict certain investments.

                

        

      

      
        
          	

                	●	
                  The Issuer may incur substantial indebtedness.

                

        

      

      
        
          	

                	●	
                  The Issuer’s ability to service its indebtedness depends on many factors beyond its control.

                

        

      

      
        
          	

                	●	
                  The Bonds may not be a suitable investment for all investors.

                

        

      

      
        
          	

                	●	
                  Fulfilment of conditions precedent.

                

        

      

      
        
          	

                	●	
                  The terms and conditions of the Bond Terms will impose significant operating and financial restrictions, which may prevent the Issuer from
                      capitalizing on business opportunities and taking some actions.

                

        

      

      
        
          	

                	●	
                  The price of the Bonds is subject to risks of interest rate and currency fluctuation.

                

        

      

      
        
          	

                	●	
                  Significant changes in exchange rates may have a material adverse effect on the value of the principal payable on the Bonds.

                

        

      

      
        4

        
          

      

      

      

      

      

      
        
          	

                	●	
                  The Bonds may be subject to optional redemption by the Issuer, which may have a material adverse effect on the value of the Bonds, and in such
                      circumstances an investor may not be able to reinvest the redemption proceeds at an equivalent rate of interest.

                

        

      

      
        
          	

                	●	
                  The enforcement of rights as a bondholder across multiple jurisdictions may prove difficult. Furthermore, in the event any bondholder’s rights as a
                      bondholder have been infringed, it may be difficult to enforce judgments against the Issuer or its respective directors or management.

                

        

      

      
        
          	

                	●	
                  Change of law.

                

        

      

      
        5

        
          

      

      
        
          	

                	

                

        

      

      

      
        6

        
          

      

      

      

      
        
          	3	
                  THIRD PARTY INFORMATION

                

        

      

      If not otherwise indicated, Diana Shipping Inc. is the source of information in this Prospectus. Information
          which has been sourced from a third party has been accurately reproduced. As far as the Issuer is aware and able to ascertain from information published by such third parties, no facts have been omitted which would render the reproduced
          information inaccurate or misleading.

      
        7

        
          

      

      
        
          	4	
                  INFORMATION CONCERNING THE SECURITIES

                

        

      

      

      

      
        	
                Reference name of the Bond Issue:

              	
                9.50% USD 100,000,000 Senior Unsecured Callable Bond Issue 2018/2023

              
	 	 
	
                ISIN:

              	
                NO0010832868

              
	 	 
	
                Issue date:

              	
                14 September 2018

              
	 	 
	
                Issuer:

              	
                Diana Shipping Inc. (a Marshall Islands corporation with registration number 13671) with LEI number 549300XD7FHNJ0THIV12

              
	 	 
	
                Group:

              	
                Means the Issuer and its Subsidiaries from time to time. A “Group Company” means the Issuer or any of its subsidiaries.

              
	 	 
	
                Currency:

              	
                USD

              
	 	 
	
                Borrowing Limit:

              	
                USD 125,000,000

              
	 	 
	
                Issue Amount/First Tranche:

              	
                USD 100,000,000

              
	 	 
	
                Coupon rate:

              	
                9.50% p.a., semi-annual interest payments.

              
	 	 
	
                Settlement Date:

              	
                27 September 2018. Notice is expected to be given to subscribers minimum two banking days prior to the Settlement Date.

              
	 	 
	
                Maturity Date:

              	
                27 September 2023 (5 years after Settlement Date).

              
	 	 
	
                First Interest Payment Date:

              	
                27 March 2018 (6 months after Settlement Date).

              
	 	 
	
                Last Interest Payment Date:

              	
                Maturity Date.

              
	 	 
	
                Interest Payments:

              	
                Interest will start to accrue on Settlement Date and shall be payable semi-annually in arrears on the interest payment day in March and
                    September each year (each an “Interest Payment Date”). Day count fraction for coupon is “30/360”, business day convention is “unadjusted” and business day is “Oslo”, “London” and “New York”.

              
	 	 
	
                Issue Price:

              	
                100% of nominal value

              
	 	 
	
                Yield:

              	
                Investors wishing to invest in the Bonds after the Issue Date must pay the market price for the Bonds in the secondary market at the time
                    of purchase. Depending on the development in the bond market in general and the development of the Issuer, the price of the Bonds may have increased (above par) or decreased (below par). If the price has increased, the yield for the
                    purchaser in the secondary market will be lower than the Interest Rate of the Bonds and vice versa. If the Bonds are bought and sold at par value the yield will be the same as the Interest Rate (9.50% per annum).

              
	 	 
	
                Amortization:

              	
                The Bonds shall be repaid in full at the Maturity Date at 100% of nominal value (plus accrued interest on redeemed Bonds).

              
	 	 
	
                Nominal value:

              	
                The Bonds will have a nominal value of USD 50,000 each.

              
	 	 
	
                Tap Issues:

              	
                The Issuer may at one or more occasions issue additional Bonds under the Bond Issue up to an aggregate amount equal to the Borrowing Limit
                    (each such issue a “Tap Issue”). For Tap Issues not falling on an Interest Payment Date, accrued interest will be calculated using standard market practice in the secondary bond market.

              
	 	 
	
                Status of the Bonds:

              	
                The Bonds will constitute senior debt obligations of the Issuer. The Bonds shall rank at least pari passu with each other and with all
                    other senior unsecured obligations of the Issuer other than obligations which are

              

        
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                mandatorily preferred by law. The Bonds shall rank ahead of subordinated capital. The Bond Issue is unsecured.

              
	
                Purpose of the Bonds:

              	
                The net proceeds from the Bonds shall be used for (i) prepayment in full of the Existing Notes (as defined below) and/or prepayment, in
                    full or in part, or refinancing of other debt of the Group, and (ii) general corporate purposes.

              
	 	 
	
                Existing Notes:

              	
                The senior unsecured notes due 15 May 2020 with ISIN MHY2066G1200 with a total outstanding amount of USD 63.25 million and issued by the
                    Issuer.

              
	 	 
	
                Call Options (American):

              	
                The Issuer may redeem the Bonds (in whole or in parts) as follows:

                 

                  

                (i) at any time from and including the Interest Payment Date falling 3 years after Settlement Date to, but not including, the Interest Payment Date falling 4 years after
                    Settlement Date at a price equal to 103.8% of nominal value (plus accrued interests on the redeemed Bonds);

                (ii) at any time from and including the Interest Payment Date falling 4 years after Settlement Date to, but not including, the Interest Payment Date falling 4 years and 6 months
                    after Settlement Date at a price equal to 101.9% of nominal value (plus accrued interests on the redeemed Bonds);

                (iii) at any time from and including the Interest Payment Date falling 4 years and 6 months after Settlement Date to, but not including, the Final Maturity Date at a price equal
                    to 100.00% of nominal value (plus accrued interests on the redeemed Bonds).

              
	 	 
	
                Representations and warranties:

              	
                Standard representations and warranties as per the Trustee’s rider for representations and warranties. The representations and warranties
                    shall be made on the execution date of the relevant Finance Document, and shall be deemed to be repeated on the Settlement Date and, in case of a Tap Issue, on the date of issuance of any additional Bonds.

              
	 	 
	
                General Undertakings:

              	
                During the term of the Bonds, the Issuer shall (unless the Trustee or the Bondholders’ Meeting (as the case may be) in writing have agreed
                    otherwise) comply with the following general undertakings at any time:

              
	 	 
	 	
                a) Merger: The Issuer shall not, and shall ensure that no other Group Company shall, carry out any merger or other business combination or corporate reorganization involving a
                    consolidation of the assets and obligations of the Issuer or any other Group Company with any other companies or entities if such transaction would have a Material Adverse Effect.

                 

                  

              
	 	
                b) De-mergers: The Issuer shall not, and shall ensure that no other Group Company shall, carry out any de-merger or other corporate reorganization involving a split of the
                    Issuer or any other Group Company into two or more separate companies or entities, if such transaction would have a Material Adverse Effect.

                 

                  

              
	 	
                c) Continuation of business:  The Issuer shall procure that no material change is made to the general nature of the business of the Group and/or the Issuer from that carried
                    on at the date of the Bond Terms.

                 

                  

              
	 	
                d) Corporate status: The Issuer shall not change its type of organization or jurisdiction of organization.

                 

                  

              
	 	
                e) Disposal of business: The Issuer shall not, and shall procure that

              

        
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                the other Group Companies shall not, sell or otherwise dispose of all or substantially all of the Group’s assets or operations to any
                    person not being a member of the Group, unless such sale, transfer or disposal is carried out in the ordinary course of business and would not have a Material Adverse Effect.

                 

                  

                f) Arm’s length transactions: The Issuer shall not, and the Issuer shall ensure that no other Group Company shall, enter into any transaction with any person except on arm’s
                    length terms and for fair market value.

                 

                  

                g) Compliance with laws: The Issuer shall, and shall ensure that all other Group Companies shall, carry on its business in accordance with acknowledged, careful and sound
                    practices in all aspects and comply in all respects with all laws and regulations it or they may be subject to from time to time. Breach of these obligations shall be regarded as non-compliance only if such breach would have a Material
                    Adverse Effect.

                 

                  

                h) Litigations: The Issuer shall, promptly upon becoming aware of them, send the Trustee such relevant details of any:

                 

                  

                (i) litigations, arbitrations or administrative proceedings which have been or might be started by or against any Group Company and which, if decided adversely is likely to
                    have a Material Adverse Effect; and

                 

                  

                (ii) other events which have occurred or might occur and which is likely to have a Material Adverse Effect.

                 

                  

                i) Reporting: The Issuer shall of its own accord make its Annual Financial Statements available to the Trustee and on its web pages for public distribution not later than 120
                    days after the end of each financial year and Interim Accounts not later than 60 days after the end of each 3 months interim period (each such date a “Reporting Date”). Such reports shall be prepared in accordance with GAAP, and include
                    a profit and loss account, balance sheet, cash flow statement and management commentary or report from the Board of Directors in the form in which the Issuer is required to file them with the SEC pursuant to Section 13 or 15(d) of the
                    Exchange Act.

              
	 	 
	
                Special Undertakings:

              	
                During the term of the Bonds, the Issuer shall (unless the Trustee or the Bondholders’ Meeting (as the case may be) in writing have agreed
                    otherwise) comply with the following special covenants at any time:

                 

                  

                a) Distribution Restrictions: If (i) an Event of Default or an event or circumstance which, with the giving of any notice or the lapse of time, would constitute an Event of
                    Default (a “Default”) has occurred and is continuing, (ii) an Event of Default or a Default would result therefrom, (iii) the Issuer is not in compliance with the Financial Covenants, (iv) the making of any Distribution by the Issuer or
                    a Subsidiary would result in the Issuer not being in compliance with the Financial Covenants or (v) if, as a result of a Distribution by the Issuer or a Subsidiary, except a Preferred Share Distribution,  the Remaining Cash Position is
                    less than  the Remaining Cash Requirement, the Issuer shall not declare or make any Distribution.

                 

                  

                b) Subsidiary distribution: Save for obligations under any Financial Indebtedness, the Issuer shall not permit any Subsidiary to create or permit to exist any contractual
                    obligation (or encumbrance) restricting the right of any Subsidiary to:

              

        
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                (i) pay dividends or make other Distributions to its shareholders;

                (ii) service any Financial Indebtedness to the Issuer;

                (iii) make any loans to the Issuer; or

                (iv) transfer any of its assets and properties to the Issuer;

                 

                  

                if the creation of such contractual obligation is reasonably likely to prevent the Issuer from complying with its payment obligations under
                    the Bond Terms.

                 

                  

                c) Negative pledge: The Issuer shall not, and shall ensure that no Group Company shall, create, permit to subsist or allow to exist any mortgage, pledge, lien or any other
                    encumbrance over any of its present or future respective assets (including shares in Subsidiaries) or its revenues, other than the encumbrances granted to secure any of the following:

                 

                  

                (i) the Permitted Security;

                 

                  

                (ii) any netting or set-off arrangement entered into by the Issuer or any other Group Company (as the case may be) in the ordinary course of its banking arrangements for the
                    purpose of netting debt and credit balances of the Issuer (if applicable); and

                 

                  

                (iii) any lien arising by operation of law.

                 

                  

                d) Financial Indebtedness restrictions: The Issuer shall not, and shall ensure that no Group Company shall, incur, create or permit to subsist any Financial Indebtedness
                    (including guarantees) other than the Permitted Financial Indebtedness (as defined below).

                 

                  

                e) Financial support restrictions: The Issuer shall not and shall ensure that no other Group Company shall, grant any loans, guarantees or other financial assistance
                    (including, but not limited to granting of security) (“Financial Support”) to or for the benefit of any third party or other Group Company, other than any Financial Support granted:

                 

                  

                (i) in connection with Permitted Financial Indebtedness; and

                 

                  

                (ii) in the ordinary course of business.

                 

                  

                f) Insurances: The Issuer shall, and the Issuer shall procure that each Group Company will, maintain with reputable insurance companies, funds or underwriters adequate
                    insurance or captive arrangements with respect to its assets, equipment and business against such liabilities, casualties and contingencies and of such types and in such amounts as are consistent with prudent business practice in their
                    relevant jurisdiction.

                 

                  

                g) Listing: The Issuer shall ensure that its ordinary shares remain listed on the New York Stock Exchange or another recognized stock exchange.

              
	 	 
	
                Financial Covenants:

              	
                The Issuer undertakes to comply with the following Financial Covenants during the term of the Bond Issue:

                 

                  

                a) Minimum Liquidity shall not be less than USD 10,000,000.

                 

                  

                b) Tangible Net Worth of the Group shall exceed 20% of Total Assets; and

                 

                  

                c) Net Borrowings to Total Assets shall not exceed 70%.

                 

                  

                The Issuer undertakes to comply with the above Financial Covenants at all times, such compliance to be measured on each Quarter Date and

              

        

        

        
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                certified by the Issuer by delivery of a compliance certificate, setting out (in reasonable detail) computations evidencing compliance with
                    the Financial Covenants, with the delivery of each Financial Report on the relevant Reporting Date. The Financial Covenants shall be calculated on a consolidated basis for the Group during the lifetime of the Bonds.

              
	 	 
	
                Definitions:

              	
                “Acceptable Bank” means, in relation to Cash and Cash Equivalents, a commercial bank, savings bank or trust company which has a rating of
                    BBB or higher from Standard & Poor's Ratings Service or Baa2 or higher from Moody's Investor Service Limited or a comparable rating from a nationally recognized credit rating agency for its long term debt obligations.

                 

                  

                “Annual Financial Statement” means the audited consolidated annual financial statements of the Issuer for any financial year, prepared in
                    accordance with GAAP, such financial statements to include a profit and loss account, balance sheet, cash flow statement, managements summary and report of the board of directors in the form in which the Issuer is required to file them
                    with the SEC pursuant to Section 13 or 15(d) of the Exchange Act.

                 

                  

                “Bondholders” means a holder of Bond(s), as registered in the CSD, from time to time.

                 

                  

                “Bondholders’ Meeting” means a meeting of Bondholders, as set out in the Bond Terms.

                 

                  

                “Bonds” means the debt instruments issued by the Issuer pursuant to this Term Sheet/Bond Terms.

                 

                  

                “Business Day” means a day on which both the relevant CSD settlement system is open.

                 

                  

                “Cash and Cash Equivalents” means on any date, the aggregate equivalent in USD on such date of the then current market value of:

                 

                  

                a) cash in hand or amounts standing to the credit of any current and/or on deposit accounts with an Acceptable Bank; and

                b) time deposits with Acceptable Banks and certificates of deposit issued, and bills of exchange accepted, by an Acceptable Bank;

                in each case to which any Group Company is beneficially entitled at the time and to which any Group Company has free and unrestricted
                    access and which is not subject to any Security.

                 

                  

                “Decisive Influence” means a person having, as a result of an agreement or through the ownership of shares or interests in another person
                    (directly or indirectly):

                    

                  

                (i) a majority of the voting rights in that other person; or

                (ii) a right to elect or remove a majority of the members of the board of directors of that other person.

                 

                  

                "Distribution" means:

                 

                  

                (i) dividend payments or distributions, whether in cash or kind;

                (ii) repurchasing of shares or undertaking other similar transactions (including, but not limited to total return swaps related to shares in the Issuer or transactions with a
                    similar effect); or

                (iii) repayment of any loans to its (or the Issuer's) shareholders that are subordinated in right of payment to the Bonds.

                 

                  

                "Exchange Act" means the Securities Exchange Act of 1934, as amended.

              

        
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                “Finance Documents” means:

                 

                  

                a) the Bond Terms;

                b) the Trustee's fee agreement; and

                c) any other document the Issuer and the Trustee designate as a Finance Document.

                 

                  

                “Financial Indebtedness” means any indebtedness for or in respect of:

                 

                  

                a) moneys borrowed (and debit balances at banks or other financial institutions);

                b) any amount raised by acceptance under any acceptance credit facility or dematerialized equivalent;

                c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument, including the Bonds;

                d) the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with GAAP, be treated as finance or capital lease (meaning that the
                    lease is capitalized as an asset and booked as a corresponding liability in the balance sheet);

                e) receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis provided that the requirements for de-recognition under GAAP
                    are met));

                f) any derivative transaction entered into and, when calculating the value of any derivative transaction, only the marked to market value (or, if any actual amount is due as a
                    result of the termination or close-out of that derivative transaction, that amount shall be taken into account);

                g) any counter-indemnity obligation in respect of a guarantee, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution
                    in respect of an underlying liability of a person which is not a Group Company which liability would fall within one of the other paragraphs of this definition;

                h) any amount raised by the issue of redeemable shares which are redeemable (other than at the option of the Issuer) before the Maturity Date or are otherwise classified as
                    borrowings under GAAP;

                i) any amount of any liability under an advance or deferred purchase agreement, if (a) the primary reason behind entering into the agreement is to raise finance or (b) the
                    agreement is in respect of the supply of assets or services and payment is due more than 120 calendar days after the date of supply;

                j) any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing or otherwise being classified
                    as a borrowing under GAAP; and

                k) without double counting, the amount of any liability in respect of any guarantee for any of the items referred to in paragraphs a) to j) above.

                “Financial Reports” means the Annual Financial Statements and the Interim Accounts.

                “GAAP” means generally accepted accounting principles in the United States.

                “Interim Accounts” means the unaudited consolidated quarterly financial statements of the Issuer for any quarter ending on 31 March, 30
                    June or 30 September, prepared in accordance with GAAP and including a profit and loss account, balance sheet, cash flow statement and management commentary or report from the board of directors in the form in which

              

        

        

        
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                the Issuer is required to file them with the SEC pursuant to Section 13 or 15(d) of the Exchange Act.

                “Liquidity” means, at any date, the aggregate amount of Cash and Cash Equivalents of the Group in each case reported in accordance
                    with GAAP.

                “Net Borrowings” means Total Financial Indebtedness less Cash and Cash Equivalents.

                “Permitted Financial Indebtedness” means:

                (i) this Bond Issue (including any Tap Issue);

                (ii) the Existing Notes;

                (iii) any unsecured bonds issued by the Issuer with (i) no amortization and with maturity after the Maturity Date, (ii) terms not materially more favourable than the
                    Bonds, and (iii) without any Financial Support from any other Group Company;

                (iv) the Senior Bank Facilities;

                (v) future senior secured or unsecured Financial Indebtedness provided by commercial banks, Export Credit Agencies or other financial institutions of similar nature
                    incurred by the Issuer or any Group Company on marketable terms and conditions with the purpose of financing the acquisition of new vessels or assets (including newbuildings and/or second-hand vessels) (or acquisition of shares in
                    entities owning one or more newbuildings or second-hand vessels or assets);

                (vi) future senior secured bonds, notes or similar debt instruments issued by the Issuer or any Group Company on marketable terms and conditions with first priority
                    security in vessels (newbuildings and/or second-hand vessels);

                (vii) any Financial Indebtedness incurred by any Group Company in the ordinary course of business for working capital purposes and as part of the daily operations of
                    such Group Company;

                (viii) existing and future bid-, payment- and performance bonds, guarantees and letters of credit incurred by any Group Company in the ordinary course of business;

                (ix) obligations incurred by any Group Company under any interest rate and currency hedging agreements relating to any Permitted Financial Indebtedness;

                (x) any unsecured intra-group loans granted by any Group Company to another Group Company provided that intra-group loans to the Issuer shall be subordinated to the
                    Bonds;

                (xi) any unsecured Subordinated Loans to the Issuer;

                (xii) any intra-group accounting balances relating to the provision of services between the Issuer and other Group Companies;

                (xiii) any Financial Indebtedness incurred in the ordinary course of business for an amount of up to USD 20 million; and

                (xiv) any refinancing, extension, amendment or replacement of any of (ii)-(xiii) above from time to time.

                 

                  

                “Permitted Security” means any Security in respect of Permitted Financial Indebtedness referred to in paragraph (iv), (v), (vi),
                    (vii), (viii), (ix), and (xiii) above and any refinancing, extension, amendment or replacement thereof from time to time.

                 

                  

                “Preferred Share Distribution" means a distribution under a class of preferred share capital issued by the Issuer, provided that
                    the conditions in "Distribution Restrictions" sub-paragraphs (i) to (iv) are met

                 

                  

                “Quarter Date” means each 31 March, 30 June, 30 September and 31 December.

                 

                  

                “Remaining Cash Position” means the sum of restricted cash and Cash and Cash Equivalents.

              

        
          14

          
            

        

        

        

        	 	
                “Remaining Cash Requirement” means USD 500 000 per vessel plus USD 45 million.

                 

                  

                “Senior Bank Facilities” means the following existing Financial Indebtedness:

                 

                  

                (i) the loan agreement dated 22 October 2009 in respect of "Houston";

                (ii) the loan agreement dated 2 October 2010 in respect of "Los Angeles" and "Philadelphia";

                (iii) the loan agreement dated 13 September 2011 in respect of "Arethusa";

                (iv) the loan agreement dated 24 May 2013 in respect of "Crystalia" and "Atalandi";

                (v) the loan agreement dated 9 January 2014 in respect of "Melite" and "Artemis";

                (vi) the loan agreement dated 18 December 2014 in respect of "G. P. Zafirakis" and "P. S. Palios";

                (vii) the loan agreement dated 17 March 2015 for the purpose of adding additional vessels and refinancing previous loan agreements in respect of "Leto", "Melia",
                    "Amphitrite"  and "Polymnia";

                (viii) the loan agreement dated 26 March 2015 in respect of "New York", "Myrto" and "Maia";

                (ix) the loan agreement dated 29 April 2015 in respect of "Santa Barbara";

                (x) the loan agreement dated 13 July 2018 with BNP Paribas;

                (xi) the loan agreement dated 30 September 2015 in respect of "New Orleans" and "Medusa";

                (xii) the loan agreement dated 7 January 2016 in respect of "San Francisco" and "Newport News";

                (xiii) the loan agreement dated 29 March 2016 in respect of "Selina" and "Ismene"; and

                (xiv) the loan agreement dated 10 May 2016 in respect of "Maera".

                 

                  

                “Subsidiary” means a company over which another company has Decisive Influence.

                 

                  

                “Subordinated Loans” means debt financing provided to the Issuer that is;

                 

                  

                (a) subordinated in right of payment to the Bonds;

                (b) does not mature or require any amortisation prior to the date on which all amounts under the Bond Terms and any other Finance Documents have been paid in full; and

                (c) does not provide for its acceleration or confer any right to declare any event of default prior to the date on which all amounts under the Bond Terms and any other
                    Finance 

                

                    Documents have been paid in full. For the avoidance of doubt, payment of cash interest of any such loans is permitted only as long as no Event of Default has occurred and is continuing and subject to the Distribution Restrictions set
                    out above.

                 

                  

                “Tangible Net Worth” means the consolidated total shareholders’ equity (including retained earnings) of the Group, less goodwill
                    and other intangible items (other than favorable charter agreements recorded in connection with purchase accounting under GAAP and, for the avoidance of doubt, vessel acquisition or construction agreements).

                 

                  

                “Total Assets” means the amount of the total assets of the Issuer determined on a consolidated basis in accordance with GAAP and
                    as shown in the balance sheet in the Issuer’s latest Financial Report.

                 

                  

                “Total Financial Indebtedness” means the amount of long-term Financial Indebtedness (including finance leases, bank loans and
                    other long-term

              

        
          15

          
            

        

        

        

        	 	
                debt) and  short-term Financial Indebtedness  of the Issuer, both determined on a consolidated basis in accordance with GAAP and as shown
                    in the balance sheet in the Issuer’s latest Financial Report.

              
	 	 
	
                Material Adverse Effect:

              	
                Means a material adverse effect on: (a) the Issuer’s ability to perform and comply with its obligations under the Bond Terms; or (b) the
                    validity or enforceability of the Bond Terms.

              
	 	 
	
                Change of Control Event:

              	
                Means if any person or group of persons acting in concert, gains Decisive Influence over the Issuer.

              
	 	 
	
                Put Option:

              	
                Upon the occurrence of a Change of Control Event, each Bondholder will have a right (a “Put Option”) to require that the Issuer purchases
                    all or some of the Bonds held by that Bondholder at a price equal to 101% of the nominal value during a period of 30 calendar days following the notice of a Change of Control Event. The Put Option repayment date will be the fifth
                    Business Day after the end of the 30 calendar days exercise period. The settlement of the Put Option will be based on each Bondholders holding of Bonds at that day.

              
	 	 
	
                Clean-up Call:

              	
                If Bonds representing more than 90% of the outstanding Bonds have been repurchased in relation to a Change of Control Event (Put Option),
                    the Issuer is entitled to repurchase all the remaining outstanding Bonds at a price of 101% of nominal value (plus accrued interest) by notifying the remaining Bondholders of its intention to do so no later than 20 calendar days after
                    the settlement date for the Put Option. Such prepayment may occur at the earliest on the 15th calendar day following the date of such notice.

              
	 	 
	
                Issuer’s ownership of Bonds:

              	
                The Issuer has the right to acquire and own the Bonds. Such Bonds may at the Issuer's discretion be retained or sold (but not cancelled).

              
	 	 
	
                Limitation of rights of action

              	
                No Bondholder is entitled to take any enforcement action, instigate any insolvency procedures, or take other action against the Issuer or
                    any other party in relation to any of the liabilities of the Issuer or any other party under or in connection with the Finance Documents, other than through the Bond Trustee and in accordance with these Bond Terms, provided, however,
                    that the Bondholders shall not be restricted from exercising any of their individual rights derived from these Bond Terms, including the right to exercise the Put Option.

                Each Bondholder shall immediately upon request by the Bond Trustee provide the Bond Trustee with any such documents, including a written
                    power of attorney (in form and substance satisfactory to the Bond Trustee), as the Bond Trustee deems necessary for the purpose of exercising its rights and/or carrying out its duties under the Finance Documents. The Bond Trustee is
                    under no obligation to represent a Bondholder which does not comply with such request.

              
	 	 
	
                Bondholders’ rights

              	
                If a beneficial owner of a Bond not being registered as a Bondholder wishes to exercise any rights under the Finance Documents, it must
                    obtain proof of ownership of the Bonds, acceptable to the Bond Trustee.

                A Bondholder (whether registered as such or proven to the Bond Trustee’s satisfaction to be the beneficial owner of the Bond as set out in
                    paragraph (a) above) may issue one or more powers of attorney to third parties to represent it in relation to some or all of the Bonds held or beneficially owned by such Bondholder. The Bond Trustee shall only have to examine the face
                    of a power of attorney or similar evidence of authorisation that has been provided to it pursuant to this Clause 3.3 (Bondholders’ rights) and may assume that it is in full force and effect, unless otherwise is apparent from its face or
                    the Bond Trustee has actual knowledge to the

              

        
          16

          
            

        

        

        

        	 	
                contrary.

              
	 	 
	
                Event of Default:

              	
                The Bond Terms shall include standard event of default provisions for the Issuer and the Group Companies related to, inter alia,
                    non-payment, breach of other obligations, misrepresentation, cross default, insolvency and insolvency proceedings, creditor’s process, impossibility or illegality, unlawfulness and Material Adverse Effect, with applicable remedy
                    provisions and exceptions, including that insolvency, insolvency proceedings and creditor’s process with respect to the other Group Companies than the Issuer shall be subject to Material Adverse Effect qualifications. The cross default
                    provisions shall only apply to any single Financial Indebtedness in excess of USD 20,000,000 (or equivalent thereof in any other currency), and cross default events to include items (i)-(iv) in the standard Nordic Trustee Bond Terms for
                    any Group Company (including the threshold amounts referred to above).

              
	 	 
	
                Limitation of claims:

              	
                All claims under the Bond Agreement, attached hereto as Appendix 1, and the other Finance Documents as defined in Clause 1.1 of the Bond
                    agreement, for payment, including interest and principal, will be subject to the legislation regarding time-bar provisions of the Norwegian Limitation Act of 18 May 1979 No. 18; pt. 3 years for interest payments and 10 years for
                    principal.

              
	 	 
	
                Conditions precedent for disbursement to the Issuer

              	 
	 	
                Payment of the net proceeds from the issuance of the Bonds to the Issuer shall be conditional on the Bond Trustee having received in due
                    time (as determined by the Bond Trustee) prior to the Issue Date each of the following documents, in form and substance satisfactory to the Bond Trustee:

                 

                  

                (i) these Bond Terms duly executed by all parties hereto;

                (ii) certified copies of all necessary corporate resolutions of the Issuer to issue the Bonds and execute the Finance Documents to which it is a party;

                (iii) a certified copy of a power of attorney (unless included in the corporate resolutions) from the Issuer to relevant individuals for their execution of the Finance Documents
                    to which it is a party, or extracts from the relevant register or similar documentation evidencing such individuals’ authorisation to execute such Finance Documents on behalf of the Issuer;

                (iv) certified copies of the Issuer's articles of association and of a full extract from the relevant company register in respect of the Issuer evidencing that the Issuer is
                    validly existing;

                (v) confirmation from the Issuer that no potential or actual Event of Default has occurred or is likely to occur as a result of the issuance of the Bonds;

                (vi) copies of the Issuer’s latest Financial Reports (if any);

                (vii) confirmation that the applicable prospectus exemption requirements (ref the EU prospectus directive (2003/71 EC)) concerning the issuance of the Bonds have been fulfilled;

                (viii) copies of any necessary governmental approval, consent or waiver (as the case may be) required at such time to issue the Bonds;

                (ix) confirmation that the Bonds are registered in the CSD;

                (x) copies of any written documentation used in marketing the Bonds or made public by the Issuer or any Manager in connection with the issuance of the Bonds;

                (xi) the Bond Trustee Fee Agreement duly executed by the parties thereto; and

                (xii) legal opinions or other statements as may be required by the Bond Trustee (including in respect of corporate matters relating to the Issuer and the legality, validity and
                    enforceability of these

              

        
          17

          
            

        

        

        

        	 	
                Bond Terms and the Finance Documents).

                 

                  

                 
                The Bond Trustee, acting in its reasonable discretion, may, regarding this Clause 6.1 (Conditions precedent for disbursement to
                    the Issuer), waive the requirements for documentation, or decide in its discretion that delivery of certain documents shall be made subject to an agreed closing procedure between the Bond Trustee and the Issuer

              
	 	 
	
                Joint Lead Managers:

              	
                Fearnley Securities AS, P.O. Box 1158 Sentrum, NO-0107, Oslo, Norway; and

                Nordea Bank Abp , filial i Norge, P.O. Box 1166 Sentrum, NO-0107 Oslo, Norway.

              
	 	 
	
                Trustee:

              	
                Nordic Trustee AS, Postboks 1470 Vika, NO-0116 Oslo, Norway

              
	 	 
	
                Registration:

              	
                The Norwegian Central Securities Depository (the “CSD”). Principal and interest accrued will be credited the bondholders through the CSD.

              
	 	 
	
                Paying Agent:

              	
                Nordea Bank Abp, filial i Norge, P.O. Box 1166 Sentrum, NO-0107 Oslo, Norway.

              
	 	 
	
                Listing of the Bonds:

              	
                An application will be made for the Bonds to be listed on Oslo Stock Exchange.

              
	 	 
	
                Market making:

              	
                No market-maker agreement has been made for this Bond Issue.

              
	 	 
	
                Tax gross up:

              	
                The Issuer shall pay any stamp duty and other public fees accruing in connection with issuance of the Bonds or the Security Documents, but
                    not in respect of trading of the Bonds in the secondary market (except to the extent required by applicable laws), and the Issuer shall deduct before payment to the Bondholders at source any applicable withholding tax payable pursuant
                    to law, subject to standard gross-up and gross-up call provisions.

              
	 	 
	
                Governing law:

              	
                This term sheet and the Bond Terms shall be governed by Norwegian law, venue to be Oslo district court (No.: "Oslo tingrett").

              
	 	 
	
                Bond Terms:

              	
                The standard Nordic Bond Terms for corporate and high yield bonds will regulate the rights and obligations with respect to the Bonds. In
                    the event of any discrepancy between this term sheet and the final Bond Terms, the provisions of the Bond Terms shall prevail.

                By filing an application to subscribe for Bonds, each investor accepts to become a Bondholder and to be bound by the provisions of the Bond
                    Terms. Further, by filing such application, each investor accepts that certain adjustments to the structure and terms described in this term sheet may occur in the final Bond Terms.

                The Bond Terms shall include provisions on the Bond Trustee’s right to represent the Bondholders, including a “no action” clause, meaning
                    that no individual Bondholder may take any legal action against the Issuer individually (as further described in the Bond Terms). The Bond Terms will further contain provisions regulating the duties of the Bond Trustee, procedures for
                    Bondholders’ Meetings/Written Resolutions and applicable quorum and majority requirements for Bondholders’ consent, whereas a sufficient majority of Bondholders may materially amend the provision of the Bond Terms or discharge the Bonds
                    in part or in full without the consent of all Bondholders, as well as other provisions customary for a bond offering as described herein.

              
	 	 
	
                Terms of subscription:

              	
                Any subscriber of the Bonds specifically authorises the Bond Trustee to

              

        
          18

          
            

        

        

        

        	 	
                execute and deliver the Bond Terms on behalf of the prospective Bondholder, who will execute and deliver relevant application forms prior
                    to receiving Bond allotments. On this basis, the Issuer and the Bond Trustee will execute and deliver the Bond Terms and the latter’s execution and delivery is on behalf of all of the subscribers, such that they thereby will become
                    bound by the Bond Terms. The Bond Terms specify that by virtue of being registered as a Bondholder (directly or indirectly) with the CSD, the Bondholders are bound by the terms of the Bond Terms and any other Finance Document, without
                    any further action required to be taken or formalities to be complied with.

                The Bond Terms shall be made available to the general public for inspection purposes and may, until redemption in full of the Bonds, be
                    obtained on request to the Bond Trustee or the Issuer.

              
	 	 
	
                Subscription Restrictions:

              	
                General

                 

                  

                No action has been taken or will be taken to permit the distribution of any of the Bond Issue or any other material related to the Bonds in
                    any jurisdiction where action would be required for such purposes. The offering of Bonds, the distribution of any of this Term Sheet or any other material related to the Bond Issue, the application for or purchase of Bonds, or the entry
                    into of an agreement to purchase Bonds, may be restricted by law in certain jurisdictions, and persons into whose possession such documents or offer come must inform themselves about and observe any such restrictions. None of the Issuer
                    or the Joint Lead Managers, or any of their representatives, shall have any responsibility for any violations of such restrictions.

                 

                  

                European Economic Area

                 

                  

                This Term Sheet or any other material related to the Bonds does not constitute or form part of a prospectus within the meaning of the EU
                    Prospectus Directive, as implemented in any member state of the European Economic Area (the "EEA") (each, a "Relevant Member State"). The expression "EU Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including
                    the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in each Relevant Member State and the expression "2010 PD Amending Directive" means Directive
                    2010/73/EU. This Term Sheet or any other material related to the Bonds has therefore not been, and will not be, reviewed by or registered with the Norwegian Financial Supervisory Authority or any other regulator or public authority.

                Accordingly, the Bonds will only be offered or sold within the EEA in reliance of applicable exemptions from preparing a prospectus
                    pursuant to the EU Prospectus Directive.

                 

                  

                United States

                 

                  

                The Bonds will be offered or sold to a “U.S. Person” (within the meaning of Regulation S under the U.S. Securities Act of 1933, as amended
                    (the “U.S. Securities Act”)) or within the United States only in reliance on Rule 144A under the U.S. Securities Act to Qualified Institutional Buyers (“QIBs”) as defined in Rule 144A under the U.S. Securities Act.

                The Bonds have not and will not be registered under the U.S. Securities Act or any securities law of any state or other jurisdiction in the
                    United States and may not be offered or sold within the United States to, or for the account or benefit of, any U.S. Person, except pursuant to an exemption from the registration requirements of the U.S. Securities Act and appropriate
                    exemptions under the laws of any other jurisdiction. See further details in the Application Form. Failure to comply with these restrictions may constitute a violation of applicable securities legislation.

                 

                  

                Nordea is not registered with the U.S. Securities and Exchange

              
	 	 

        
          19

          
            

        

        

        

        	 	
                Commission as a U.S. registered broker-dealer and will not participate in the offer or sale of the Bonds within the United States.

                 

                  

                United Kingdom

                 

                  

                In the UK the Bonds will only offered or sold to persons who have professional experience, knowledge and expertise in matters relating to
                    investments and are "investment professionals" for the purposes of article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 and only in circumstances where, in accordance with section 86(1) (c) and
                    (d) of the Financial and Services Markets Act 2000 ("FSMA") the requirement to provide an approved prospectus in accordance with the requirement under section 85 FSMA does not apply. Consequently, the Applicant understands that the
                    Bonds may be offered only to "qualified investors" for the purposes of sections 86(1) and 86(7) FSMA, or to limited numbers of UK investors, or only where minima are placed on the consideration or denomination of securities that can be
                    made available (all such persons being referred to as "relevant persons"). Any application or subscription for the Bonds is available only to relevant persons and will be engaged in only with relevant persons. See further details in the
                    Application Form.

              
	 	 
	
                Transfer Restrictions:

              	
                The Bonds are freely transferable and may be pledged, subject to the following:

                 

                  

                (i) Bondholders will not be permitted to transfer the Bonds except (a) subject to an effective registration statement under the U.S. Securities Act, (b) to a person that the
                    bondholder reasonably believes is a QIB within the meaning of Rule 144A that is purchasing for its own account, or the account of another QIB, in a transaction meeting the requirements of Rule 144A, (c) in an offshore transaction,
                    including a transaction on the Oslo Børs, meeting the requirements of Regulation S under the U.S. Securities Act, , and (d) pursuant to any other exemption from registration under the U.S. Securities Act, including Rule 144 thereunder
                    (if available).

                 

                  

                (ii) Bondholders may be subject to purchase or transfer restrictions with regard to the Bonds, as applicable from time to time under local laws to which a Bondholder may be
                    subject (due e.g. to its nationality, its residency, its registered address, its place(s) for doing business). Each Bondholder must ensure compliance with local laws and regulations applicable at own cost and expense.

                 

                  

                Notwithstanding the above, a Bondholder which has purchased the Bonds in contradiction to mandatory restrictions applicable may
                    nevertheless utilize its voting rights under the Bond Terms provided that the Issuer shall not incur any additional liability by complying with its obligations to such Bondholder.

              

      

      

      

      

      

      

      

      

      

      

      
        20

        
          

      

      

      

      
        
          	5	
                  ADDITIONAL INFORMATION

                

        

      

      The involved persons in the Issuer have no interest, nor conflicting interests that are material to the Bond
          Issue.

      The Issuer mandated Fearnley Securities AS and Nordea Bank Abp, filial i Norge as joint lead managers for the
          issuance of the Loan. The Joint Lead Managers have acted as advisors to the Issuer in relation to the pricing of the Loan.

      

      

      Statement from the Joint Lead Managers:

      Fearnley Securities AS and Nordea Bank Abp, filial i Norge, have assisted the Borrower in preparing the
          prospectus. Fearnley Securities AS and Nordea Bank Abp, filial i Norge, have not verified the information contained herein. Accordingly, no representation, warranty or undertaking, express or implied, is made, and the Joint Lead Managers
          expressively disclaim any legal or financial liability as to the accuracy or completeness of the information contained in this prospectus or any other information supplied in connection with bonds issued by the Issuer or their distribution. The
          statements made in this paragraph are without prejudice to the responsibility of the Issuer. Each person receiving this prospectus acknowledges that such person has not relied on the Joint Lead Managers nor on any person affiliated with them in
          connection with its investigation of the accuracy of such information or its investment decision.

      

      

      Oslo, 3 December 2018

      

      

      
        21

        
          

      

      

      

      
        
          	6	
                  APPENDIX 1:  BOND AGREEMENT

                

        

      

      

      

      Execution version

      

      

      

      

      

      

      

      

      BOND TERMS

      FOR

      Diana Shipping Inc. 9.50% senior unsecured callable bond issue 2018/2023

      ISIN NO0010832868

      

      

      
        22

        
          

      

      

      

      

      

      	
              Contents

            
	
              Clause

            	
              Page

            

      

      

      	
              1.

            	
              INTERPRETATION

            	
              3

            
	
              2.

            	
              THE BONDS

            	
              13

            
	
              3.

            	
              THE BONDHOLDERS

            	
              14

            
	
              4.

            	
              ADMISSION TO LISTING

            	
              14

            
	
              5.

            	
              REGISTRATION OF THE BONDS

            	
              15

            
	
              6.

            	
              CONDITIONS FOR DISBURSEMENT

            	
              15

            
	
              7.

            	
              REPRESENTATIONS AND WARRANTIES

            	
              16

            
	
              8.

            	
              PAYMENTS IN RESPECT OF THE BONDS

            	
              18

            
	
              9.

            	
              INTEREST

            	
              20

            
	
              10.

            	
              REDEMPTION AND REPURCHASE OF BONDS

            	
              21

            
	
              11.

            	
              PURCHASE AND TRANSFER OF BONDS

            	
              22

            
	
              12.

            	
              INFORMATION UNDERTAKINGS

            	
              23

            
	
              13.

            	
              GENERAL AND FINANCIAL UNDERTAKINGS

            	
              24

            
	
              14.

            	
              EVENTS OF DEFAULT AND ACCELERATION OF THE BONDS

            	
              27

            
	
              15.

            	
              BONDHOLDERS’ DECISIONS

            	
              30

            
	
              16.

            	
              THE BOND TRUSTEE

            	
              35

            
	
              17.

            	
              AMENDMENTS AND WAIVERS

            	
              39

            
	
              18.

            	
              MISCELLANEOUS

            	
              39

            
	
              19.

            	
              GOVERNING LAW AND JURISDICTION

            	
              41

            

      

      

      SCHEDULE 1 COMPLIANCE CERTIFICATE

      

      

      

      

      
        23

        
          

      

      

      

      

      

      

      

      	
              BOND TERMS between

            
	
              ISSUER:

            	
              Diana Shipping Inc., a company existing under the laws of Marshall Islands with registration number 13671 and LEI-code
                  549300XD7FHNJ0THIV12; and

            
	
              BOND TRUSTEE:

            	
              Nordic Trustee AS, a company existing under the laws of Norway with registration number 963 342 624 and LEI-code 549300XAKTM2BMKIPT85.

            
	
              DATED:

            	
              26 September 2018

            
	
              These Bond Terms shall remain in effect for so long as any Bonds remain outstanding.

            

      

      

      
        
          	1.	
                  INTERPRETATION

                

        

      

      
        
          	1.1	
                  Definitions

                

        

      

      The following terms will have the following meanings:

      “Acceptable Bank”
          means, in relation to Cash and Cash Equivalents, a commercial bank, savings bank or trust company which has a rating of BBB or higher from Standard & Poor`s Ratings Service or Baa2 or higher from Moody`s Investor Service Limited or a
          comparable rating from a nationally recognised credit rating agency for its long term debt obligations.

      “Additional Bonds”
          means Bonds issued under a Tap Issue.

      “Affiliate”
          means, in relation to any person:

      
        
          	

                	(a)	
                  any person which is a Subsidiary of that person;

                

        

      

      
        
          	

                	(b)	
                  any person who has Decisive Influence over that person (directly or indirectly); and

                

        

      

      
        
          	

                	(c)	
                  any person which is a Subsidiary of an entity who has Decisive Influence (directly or indirectly) over that person.

                

        

      

      “Annual Financial
            Statements” means the audited consolidated annual financial statements of the Issuer for any financial year, prepared in accordance with GAAP, such financial statements to include a profit and loss account, balance sheet, cash flow
          statement and report of the board of directors in the form which the Issuer is required to file them with the SEC pursuant to Section 13 or 15(d) of the Exchange Act.

      “Attachment”
          means each of the attachments to these Bond Terms.

      
        24

        
          

      

      

      

      “Bond Terms”
          means these terms and conditions, including all Attachments which shall form an integrated part of these Bond Terms, in each case as amended and/or supplemented from time to time.

      “Bond Trustee”
          means the company designated as such in the preamble to these Bond Terms, or any successor, acting for and on behalf of the Bondholders in accordance with these Bond Terms.

      “Bond Trustee Fee
            Agreement” means the agreement entered into between the Issuer and the Bond Trustee relating among other things to the fees to be paid by the Issuer to the Bond Trustee for its obligations relating to the Bonds.

      “Bondholder”
          means a person who is registered in the CSD as directly registered owner or nominee holder of a Bond, subject however to Clause 3.3 (Bondholders’ rights).

      “Bondholders'
            Meeting” means a meeting of Bondholders as set out in Clause 14 (Bondholders' Decisions).

      “Bonds”
          means the debt instruments issued by the Issuer pursuant to these Bond Terms, including any Additional Bonds.

      “Business Day”
          means a day on which the relevant CSD settlement system is open and  banks generally are open for business in Oslo, London and New York.

      “Business Day
            Convention” means that if the last day of any Interest Period originally falls on a day that is not a Business Day, no adjustment will be made to the Interest Period.

      “Call Option”
          has the meaning given to it in Clause 10.2 (Voluntary early redemption – Call Option).

      “Call Option
            Repayment Date” means the settlement date for the Call Option determined by the Issuer pursuant to Clause 10.2 (Voluntary early redemption – Call
            Option), or a date agreed upon between the Bond Trustee and the Issuer in connection with such redemption of Bonds.

      “Cash and Cash
            Equivalents” means on any date, the aggregate equivalent in USD on such date of the then current market value of:

      
        
          	

                	(a)	
                  cash in hand or amounts standing to the credit of any current and/or on deposit accounts with an Acceptable Bank; and

                

        

      

      
        
          	

                	(b)	
                  time deposits with Acceptable Banks and certificates of deposit issued, and bills of exchange accepted, by an Accepted Bank;

                

        

      

      in each case to which any Group Company is beneficially entitled at the time and to which any Group
          Company has free and unrestricted access and which is not subject to any Security.

      “Change of
            Control Event” means a person or group of persons acting in concert gaining Decisive Influence over the Issuer.

      
        25

        
          

      

      

      

      “CSD”
          means the central securities depository in which the Bonds are registered, being Verdipapirsentralen ASA (VPS).

      “Compliance
            Certificate” means a statement substantially in the form as set out in Attachment 1 hereto.

      “Decisive
            Influence” means a person having, as a result of an agreement or through the ownership of shares or interests in another person (directly or indirectly):

      
        
          	

                	(a)	
                  a majority of the voting rights in that other person; or

                

        

      

      
        
          	

                	(b)	
                  a right to elect or remove a majority of the members of the board of directors of that other person.

                

        

      

      “Default Notice”
          means a written notice to the Issuer as described in Clause 14.2 (Acceleration of the Bonds).

      “Default
            Repayment Date” means the settlement date set out by the Bond Trustee in a Default Notice requesting early redemption of the Bonds.

      “Distribution”
          means:

      
        
          	

                	(a)	
                  dividend payments or distributions, whether in cash or in kind;

                

        

      

      
        
          	

                	(b)	
                  repurchasing of shares or undertaking other similar transactions (including, but not limited to total return swaps related to shares in the Issuer or transactions
                      with similar effect); or

                

        

      

      
        
          	

                	(c)	
                  repayment of any loans to its (or the Issuer`s) shareholders that are subordinated in right of payment to the Bonds.

                

        

      

      “Event of Default”
          means any of the events or circumstances specified in Clause 14.1 (Events of Default).

      “Exchange”
          means Oslo Børs (the Oslo Stock Exchange).

      “Exchange Act”
          means the United Stated Securities Exchange Act of 1934, as amended.

      “Existing Notes”
          means the senior unsecured notes due 15 May 2020 with ISIN MHY2066G1200 with a total outstanding amount of USD 63.25 million and issued by the Issuer.

      “Finance
            Documents” means these Bond Terms, the Bond Trustee Fee Agreement and any other document designated by the Issuer and the Bond Trustee as a Finance Document.

      “Financial
            Indebtedness” means any indebtedness for or in respect of:

      
        
          	

                	(a)	
                  moneys borrowed (and debit balances at banks or other financial institutions);

                

        

      

      
        26

        
          

      

      

      

      
        
          	

                	(b)	
                  any amount raised by acceptance under any acceptance credit facility or dematerialized equivalent;

                

        

      

      
        
          	

                	(c)	
                  any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument, including the Bonds;

                

        

      

      
        
          	

                	(d)	
                  the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with GAAP, be treated as a finance or capital lease
                      (meaning that the lease is capitalized as an asset and booked as a corresponding liability in the balance sheet);

                

        

      

      
        
          	

                	(e)	
                  receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis provided that the requirements for de-recognition
                      under GAAP are met);

                

        

      

      
        
          	

                	(f)	
                  any derivative transaction entered into and, when calculating the value of any derivative transaction, only the marked to market value (or, if any actual amount is
                      due as a result of the termination or close-out of that derivative transaction, that amount shall be taken into account);

                

        

      

      
        
          	

                	(g)	
                  any counter-indemnity obligation in respect of a guarantee, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial
                      institution in respect of an underlying liability of a person which is not a Group Company which liability would fall within one of the other paragraphs of this definition;

                

        

      

      
        
          	

                	(h)	
                  any amount raised by the issue of redeemable shares which are redeemable (other than at the option of the Issuer) before the Maturity Date or are otherwise
                      classified as borrowings under GAAP;

                

        

      

      
        
          	

                	(i)	
                  any amount of any liability under an advance or deferred purchase agreement, if (a) the primary reason behind entering into the agreement is to raise finance or
                      (b) the agreement is in respect of the supply of assets or services and payment is due more than hundred and twenty (120) calendar days after the date of supply;

                

        

      

      
        
          	

                	(j)	
                  any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing or otherwise being
                      classified as a borrowing under GAAP; and

                

        

      

      
        
          	

                	(k)	
                  without double counting, the amount of any liability in respect of any guarantee for any of the items referred to in paragraphs a) to j) above.

                

        

      

      “Financial
            Reports” means the Annual Financial Statements and the Interim Accounts.

      “Financial
            Support” means any loans, guarantees, Security or other financial assistance (whether actual or contingent).

      “GAAP”
          means generally accepted accounting practices and principles in the United States.

      “Group”
          means the Issuer and its Subsidiaries from time to time.

      
        27

        
          

      

      

      

      “Group Company”
          means the Issuer or any of its Subsidiaries.

      “Initial Bond
            Issue” means the aggregate Nominal Amount of all Bonds issued on the Issue Date.

      “Initial Nominal
            Amount” means the nominal amount of each Bond as set out in Clause 2.1 (Amount, denomination and ISIN of the Bonds).

      “Insolvent”
          means that a person:

      
        
          	

                	(a)	
                  is unable or admits inability to pay its debts as they fall due;

                

        

      

      
        
          	

                	(b)	
                  suspends making payments on any of its debts generally; or

                

        

      

      
        
          	

                	(c)	
                  is otherwise considered insolvent or bankrupt within the meaning of the relevant bankruptcy legislation of the jurisdiction which can be regarded as its center of
                      main interest as such term is understood pursuant to Council Regulation (EC) no. 1346/2000 on insolvency proceedings (as amended).

                

        

      

      “Interest Payment
            Date” means the last day of each Interest Period, the first Interest Payment Date being 27 March 2019 and the last Interest Payment Date being the Maturity Date.

      “Interest Period”
          means, subject to adjustments in accordance with the Business Day Convention, the period between 27 March and 27 September each year, provided however that an Interest Period shall not extend beyond the Maturity Date.

      “Interest Rate”
          means 9.50 percentage points per annum.

      “Interim Accounts”
          means the unaudited consolidated quarterly financial statements of the Issuer for the quarterly period ending on each 31 March, 30 June or 30 September in each year, prepared in accordance with GAAP and including a profit and loss account,
          balance sheet, cash flow statement and management commentary or report from the board of directors in the form in which the Issuer is required to file them with the SEC pursuant to Section 13 or 15(d) of the Exchange Act.

      “ISIN”
          means International Securities Identification Number, being the identification number of the Bonds.

      “Issue Date”
          means 27 September 2018.

      “Issuer”
          means the company designated as such in the preamble to these Bond Terms.

      “Issuer’s Bonds”
          means any Bonds which are owned by the Issuer or any Affiliate of the Issuer.

      “Liquidity”
          means, at any time, the aggregate amount of Cash and Cash Equivalents of the Group in each case reported in accordance with GAAP.

      “Managers”
          means Fearnley Securities AS and Nordea Bank AB (publ), filial i Norge.

      
        28

        
          

      

      

      

      “Material Adverse
            Effect” means a material adverse effect on:

      
        
          	

                	(a)	
                  the ability of the Issuer to perform and comply with its obligations under these Bond Terms; or

                

        

      

      
        
          	

                	(b)	
                  the validity or enforceability of these Bond Terms.

                

        

      

      “Maturity Date”
          means 27 September 2023 (5 years after the Issue Date), adjusted according to the Business Day Convention.

      “Maximum Issue
            Amount” shall have the meaning ascribed to such term in Clause 2.1 (Amount, denomination and ISIN of the Bonds).

      “Net Borrowings”
          means Total Financial Indebtedness less Cash and Cash Equivalents.

      “Nominal Amount”
          means the Initial Nominal Amount (less the aggregate amount by which each Bond has been partially redeemed, if any) pursuant to Clause 10 (Redemption and
            repurchase of Bonds) or any other amount following a split of Bonds pursuant to Clause 16.2, paragraph (j).

      “Outstanding
            Bonds” means any Bonds not redeemed or otherwise discharged.

      “Overdue Amount”
          means any amount required to be paid by the Issuer under any of the Finance Documents but not made available to the Bondholders on the relevant Payment Date or otherwise not paid on its applicable due date.

      “Partial Payment”
          means a payment that is insufficient to discharge all amounts then due and payable under the Finance Documents.

      “Paying Agent”
          means the legal entity appointed by the Issuer to act as its paying agent with respect to the Bonds in the CSD.

      “Payment Date”
          means any Interest Payment Date or any Repayment Date.

      “Permitted
            Financial Indebtedness” means:

      
        
          	

                	(a)	
                  this Bond Issue (including any Tap Issue);

                

        

      

      
        
          	

                	(b)	
                  the Existing Notes;

                

        

      

      
        
          	

                	(c)	
                  any unsecured bonds issued by the Issuer with (i) no amortisation and with maturity after the Maturity Date, (ii) terms not materially more favourable than the
                      Bonds, and (iii) without any Financial Support from any other Group Company;

                

        

      

      
        
          	

                	(d)	
                  the Senior Bank Facilities;

                

        

      

      
        
          	

                	(e)	
                  future senior secured or unsecured Financial Indebtedness provided by commercial banks, Export Credit Agencies or other financial institutions of similar nature
                      incurred by the Issuer or any Group Company on marketable terms and conditions with the purpose of financing the acquisition of new vessels or assets (including newbuildings

                

        

      

      
        29

        
          

      

      

      

      and/or second-hand vessels) (or acquisition of shares in entities owning one or more newbuildings or
          second-hand vessels or assets);

      
        
          	

                	(f)	
                  future senior secured bonds, notes or similar debt instruments issued by the Issuer or any Group Company on marketable terms and conditions with first priority
                      security in vessels (newbuildings and/or second-hand vessels ) except for vessels forming part of the Group's existing fleet that are unencumbered as of the Issue Date;

                

        

      

      
        
          	

                	(g)	
                  any Financial Indebtedness incurred by any Group Company in the ordinary course of business for working capital purposes and as part of the daily operations of
                      such Group Company;

                

        

      

      
        
          	

                	(h)	
                  existing and future bid-, payment- and performance bonds, guarantees and letters of credit incurred by any Group Company in the ordinary course of business;

                

        

      

      
        
          	

                	(i)	
                  obligations incurred by any Group Company under any interest rate and currency hedging agreements relating to any Permitted Financial Indebtedness;

                

        

      

      
        
          	

                	(j)	
                  any unsecured intra-group loans granted by any Group Company to another Group Company provided that intra-group loans to the Issuer shall be subordinated to the
                      Bonds;

                

        

      

      
        
          	

                	(k)	
                  any unsecured Subordinated Loans to the Issuer;

                

        

      

      
        
          	

                	(l)	
                  any intra-group accounting balances relating to the provision of services between the Issuer and other Group Companies;

                

        

      

      
        
          	

                	(m)	
                  any Financial Indebtedness incurred in the ordinary course of business for an amount of up to USD 20,000,000; and

                

        

      

      
        
          	

                	(n)	
                  any refinancing, extension, amendment or replacement of any of (b)-(m) above from time to time.

                

        

      

      “Permitted
            Security” means any Security in respect of Permitted Financial Indebtedness referred to in paragraph (d), (e), (f), (g), (h), (i), and (m) above and any refinancing, extension, amendment or replacement thereof from time to time.

      “Preferred Share
            Distribution” means a distribution under a class of preferred share capital issued by the Issuer, provided that the conditions in Clause 13.10 (Distribution

            Restrictions) sub-paragraphs (i) to (iv) are met.

      “Put Option”
          shall have the meaning ascribed to such term in Clause 10.3 (Mandatory repurchase due to a Put Option Event).

      “Put Option Event”
          means a Change of Control Event.

      “Put Option
            Repayment Date” means the settlement date for the Put Option Event pursuant to Clause 10.3 (Mandatory repurchase due to a Put Option Event).

      “Quarter Date”
          means each 31 March, 30 June, 30 September and 31 December.

      
        30

        
          

      

      

      

      “Relevant
            Jurisdiction” means the country in which the Bonds are issued, being Norway.

      “Relevant Record
            Date” means the date on which a Bondholder’s ownership of Bonds shall be recorded in the CSD as follows:

      
        
          	

                	(a)	
                  in relation to payments pursuant to these Bond Terms, the date designated as the Relevant Record Date in accordance with the rules of the CSD from time to time;

                

        

      

      
        
          	

                	(b)	
                  for the purpose of casting a vote in a Bondholders’ Meeting, the date falling on the immediate preceding Business Day to the date of that Bondholders' Meeting
                      being held, or another date as accepted by the Bond Trustee; and

                

        

      

      
        
          	

                	(c)	
                  for the purpose of casting a vote in a Written Resolution:

                

        

      

      
        
          	

                	(i)	
                  the date falling three (3) Business Days after the Summons have been published; or,

                

        

      

      
        
          	

                	(ii)	
                  if the requisite majority in the opinion of the Bond Trustee has been reached prior to the date set out in paragraph (i) above, on the date falling on the
                      immediate Business Day prior to the date on which the Bond Trustee declares that the Written Resolution has been passed with the requisite majority.

                

        

      

      “Remaining Cash
            Position” means the sum of restricted cash and Cash and Cash Equivalents.

      “Remaining Cash
            Requirements” means USD 500,000 per vessel plus USD 45,000,000.

      “Repayment Date”
          means any Call Option Repayment Date, the Default Repayment Date, the Put Option Repayment Date, the Tax Event Repayment Date or the Maturity Date.

      “Securities
            Trading Act” means the Securities Trading Act of 2007 no. 75 of the Relevant Jurisdiction.

      “Security”
          means a mortgage, charge, pledge, lien, security assignment or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.

      “Senior Bank
            Facilities” means the following existing Financial Indebtedness:

      
        
          	

                	(a)	
                  the loan agreement dated 22 October 2009 in respect of "Houston";

                

        

      

      
        
          	

                	(b)	
                  the loan agreement dated 2 October 2010 in respect of "Los Angeles" and "Philadelphia";

                

        

      

      
        
          	

                	(c)	
                  the loan agreement dated 13 September 2011 in respect of "Arethusa";

                

        

      

      
        
          	

                	(d)	
                  the loan agreement dated 24 May 2013 in respect of "Crystalia" and "Atalandi";

                

        

      

      
        
          	

                	(e)	
                  the loan agreement dated 9 January 2014 in respect of "Melite" and "Artemis";

                

        

      

      
        31

        
          

      

      

      

      
        
          	

                	(f)	
                  the loan agreement dated 18 December 2014 in respect of "G. P. Zafirakis" and "P. S. Palios";

                

        

      

      
        
          	

                	(g)	
                  the loan agreement dated 17 March 2015 for the purpose of adding additional vessels and refinancing previous loan agreements in respect of "Leto", "Melia",
                      "Amphitrite"  and "Polymnia";

                

        

      

      
        
          	

                	(h)	
                  the loan agreement dated 26 March 2015 in respect of "New York", "Myrto" and "Maia";

                

        

      

      
        
          	

                	(i)	
                  the loan agreement dated 29 April 2015 in respect of "Santa Barbara";

                

        

      

      
        
          	

                	(j)	
                  the loan agreement dated 13 July 2018 with BNP Paribas;

                

        

      

      
        
          	

                	(k)	
                  the loan agreement dated 30 September 2015 in respect of "New Orleans" and "Medusa";

                

        

      

      
        
          	

                	(l)	
                  the loan agreement dated 7 January 2016 in respect of "San Francisco" and "Newport News";

                

        

      

      
        
          	

                	(m)	
                  the loan agreement dated 29 March 2016 in respect of "Selina" and "Ismene"; and

                

        

      

      
        
          	

                	(n)	
                  the loan agreement dated 10 May 2016 in respect of "Maera".

                

        

      

      “Subordinated
            Loans” means debt financing provided to the Issuer that is:

      
        
          	

                	(a)	
                  subordinated in right of payment to the Bonds;

                

        

      

      
        
          	

                	(b)	
                  does not mature or require any amortisation prior to the date on which all amounts under these Bond Terms and any other Finance Documents have been paid in full;
                      and

                

        

      

      
        
          	

                	(c)	
                  does not provide for its acceleration or confer any right to declare any event of default prior to the date on which all amounts under these Bond Terms and any
                      other Finance Documents have been paid in full. For the avoidance of doubt, payment of cash interest of any such loans is permitted only as long as no Event of Default has occurred and is continuing and subject to the Distribution
                      Restrictions set out above.

                

        

      

      “Subsidiary”
          means a company over which another company has Decisive Influence.

      “Summons”
          means the call for a Bondholders’ Meeting or a Written Resolution as the case may be.

      “Tangible Net
            Worth” means the consolidated total shareholders’ equity (including retained earnings) of the Group, less goodwill and other intangible items (other than favorable charter agreements recorded in connection with purchase accounting under
          GAAP and, for the avoidance of doubt, vessel acquisition or construction agreements).

      “Tap Issue”
          shall have the meaning ascribed to such term in Clause 2.1 (Amount, denomination, ISIN and tenor).

      
        32

        
          

      

      

      

      “Tap Issue
            Addendum” shall have the meaning ascribed to such term in Clause 2.1 (Amount, denomination, ISIN and tenor).

      “Tax Event
            Repayment Date” means the date set out in a notice from the Issuer to the Bondholders pursuant to Clause 10.4 (Early redemption option due to a tax
            event).

      “Total Assets”
          means the amount of the total assets of the Issuer determined on a consolidated basis in accordance with GAAP and as shown in the balance sheet in the Issuer’s latest Financial Report.

      “Total Financial
            Indebtedness” means the amount of long-term Financial Indebtedness (including finance leases, bank loans and other long-term debt) and short-term Financial Indebtedness  of the Issuer, both determined on a consolidated basis in
          accordance with GAAP and as shown in the balance sheet in the Issuer’s latest Financial Report.

      “Voting Bonds”
          means the Outstanding Bonds less the Issuer’s Bonds and a Voting Bond shall mean any single one of those Bonds.

      “Written
            Resolution” means a written (or electronic) solution for a decision making among the Bondholders, as set out in Clause 15.5 (Written Resolutions).

      
        
          	1.2	
                  Construction

                

        

      

      In these Bond Terms, unless the context otherwise requires:

      
        
          	

                	(a)	
                  headings are for ease of reference only;

                

        

      

      
        
          	

                	(b)	
                  words denoting the singular number will include the plural and vice versa;

                

        

      

      
        
          	

                	(c)	
                  references to Clauses are references to the Clauses of these Bond Terms;

                

        

      

      
        
          	

                	(d)	
                  references to a time are references to Central European time unless otherwise stated;

                

        

      

      
        
          	

                	(e)	
                  references to a provision of “law” is a reference to that provision
                      as amended or re-enacted, and to any regulations made by the appropriate authority pursuant to such law;

                

        

      

      
        
          	

                	(f)	
                  references to a “regulation” includes any regulation, rule,
                      official directive, request or guideline by any official body;

                

        

      

      
        
          	

                	(g)	
                  references to a “person” means any individual, corporation,
                      partnership, limited liability company, joint venture, association, joint-stock company, unincorporated organization, government, or any agency or political subdivision thereof or any other entity, whether or not having a separate
                      legal personality;

                

        

      

      
        
          	

                	(h)	
                  references to Bonds being “redeemed” means that such Bonds are
                      cancelled and discharged in the CSD in a corresponding amount, and that any amounts so redeemed may not be subsequently re-issued under these Bond Terms;

                

        

      

      
        
          	

                	(i)	
                  references to Bonds being “purchased” or “repurchased” by the Issuer means that such Bonds may be dealt with by the Issuer as set out in Clause 11.1 (Issuer’s purchase of Bonds),

                

        

      

      
        33

        
          

      

      

      

      
        
          	

                	(j)	
                  references to persons “acting in concert” shall be interpreted
                      pursuant to the relevant provisions of the Securities Trading Act; and

                

        

      

      
        
          	

                	(k)	
                  an Event of Default is “continuing” if it has not been remedied or
                      waived.

                

        

      

      
        
          	2.	
                  THE BONDS

                

        

      

      
        
          	2.1	
                  Amount, denomination and ISIN of the Bonds

                

        

      

      
        
          	

                	(a)	
                  The Issuer has resolved to issue a series of Bonds in the maximum amount of USD 125,000,000 (the “Maximum Issue Amount”). The Bonds may be issued on different issue dates and the Initial Bond Issue will be in the amount of up to USD 100,000,000. The Issuer may, provided that the conditions set
                      out in Clause 6.3 (Tap Issues) are met, at one or more occasions issue Additional Bonds (each a “Tap Issue”) until the Nominal Amount of all Additional Bonds equals in aggregate the Maximum Issue Amount less the Initial Bond Issue. Each Tap Issue will be subject to
                      identical terms as the Bonds issued pursuant to the Initial Bond Issue in all respects as set out in these Bond Terms, except that Additional Bonds may be issued at a different price than for the Initial Bond Issue and which may be
                      below or above the Nominal Amount. The Bond Trustee shall prepare an addendum to these Bond Terms evidencing the terms of each Tap Issue (a “Tap
                        Issue Addendum”).

                

        

      

      
        
          	

                	(b)	
                  The Bonds are denominated in US Dollars (USD), being the legal currency of the United States of America.

                

        

      

      
        
          	

                	(c)	
                  The Initial Nominal Amount of each Bond is USD 50,000.

                

        

      

      
        
          	

                	(d)	
                  The ISIN of the Bonds is NO0010832868. All Bonds issued under the same ISIN will have identical terms and conditions as set out in these Bond Terms.

                

        

      

      
        
          	2.2	
                  Tenor of the Bonds

                

        

      

      The tenor of the Bonds is from and including the Issue Date to but excluding the Maturity Date.

      
        
          	2.3	
                  Use of proceeds

                

        

      

      The Issuer will use the net proceeds from the Initial Bond Issue and issuance of any Additional Bonds for
          (i) prepayment in full of the Existing Notes and/or prepayment, in full or in part, or refinancing of other debt of the Group and (ii) general corporate purposes.

      
        
          	2.4	
                  Status of the Bonds

                

        

      

      The Bonds will constitute senior debt obligations of the Issuer. The Bonds will rank pari passu between
          themselves and will rank at least pari passu with each other and with all other senior unsecured obligations of the Issuer (save for such claims which are preferred by bankruptcy, insolvency, liquidation or other similar laws of general
          application). The Bonds shall rank ahead of subordinated capital.

      
        
          	2.5	
                  Transaction Security

                

        

      

      The Bonds are unsecured.

      
        34

        
          

      

      

      

      
        
          	3.	
                  THE BONDHOLDERS

                

        

      

      
        
          	3.1	
                  Bond Terms binding on all Bondholders

                

        

      

      
        
          	

                	(a)	
                  By virtue of being registered as a Bondholder (directly or indirectly) with the CSD, the Bondholders are bound by these Bond Terms and any other Finance Document,
                      without any further action required to be taken or formalities to be complied with by the Bond Trustee, the Bondholders, the Issuer or any other party.

                

        

      

      
        
          	

                	(b)	
                  The Bond Trustee is always acting with binding effect on behalf of all the Bondholders.

                

        

      

      
        
          	3.2	
                  Limitation of rights of action

                

        

      

      
        
          	

                	(a)	
                  No Bondholder is entitled to take any enforcement action, instigate any insolvency procedures, or take other action against the Issuer or any other party in
                      relation to any of the liabilities of the Issuer or any other party under or in connection with the Finance Documents, other than through the Bond Trustee and in accordance with these Bond Terms, provided, however, that the
                      Bondholders shall not be restricted from exercising any of their individual rights derived from these Bond Terms, including the right to exercise the Put Option.

                

        

      

      
        
          	

                	(b)	
                  Each Bondholder shall immediately upon request by the Bond Trustee provide the Bond Trustee with any such documents, including a written power of attorney (in form
                      and substance satisfactory to the Bond Trustee), as the Bond Trustee deems necessary for the purpose of exercising its rights and/or carrying out its duties under the Finance Documents. The Bond Trustee is under no obligation to
                      represent a Bondholder which does not comply with such request.

                

        

      

      
        
          	3.3	
                  Bondholders’ rights

                

        

      

      
        
          	

                	(a)	
                  If a beneficial owner of a Bond not being registered as a Bondholder wishes to exercise any rights under the Finance Documents, it must obtain proof of ownership
                      of the Bonds, acceptable to the Bond Trustee.

                

        

      

      
        
          	

                	(b)	
                  A Bondholder (whether registered as such or proven to the Bond Trustee’s satisfaction to be the beneficial owner of the Bond as set out in paragraph (a) above) may
                      issue one or more powers of attorney to third parties to represent it in relation to some or all of the Bonds held or beneficially owned by such Bondholder. The Bond Trustee shall only have to examine the face of a power of attorney
                      or similar evidence of authorisation that has been provided to it pursuant to this Clause 3.3 (Bondholders’ rights) and may assume that
                      it is in full force and effect, unless otherwise is apparent from its face or the Bond Trustee has actual knowledge to the contrary.

                

        

      

      
        
          	4.	
                  ADMISSION TO LISTING

                

        

      

      The Issuer has applied, or shall apply, for the Bonds to be admitted to listing on the Exchange.

      
        35

        
          

      

      

      

      
        
          	5.	
                  REGISTRATION OF THE BONDS

                

        

      

      
        
          	5.1	
                  Registration in the CSD

                

        

      

      The Bonds shall be registered in dematerialised form in the CSD according to the relevant securities
          registration legislation and the requirements of the CSD.

      
        
          	5.2	
                  Obligation to ensure correct registration

                

        

      

      The Issuer will at all times ensure that the registration of the Bonds in the CSD is correct and shall
          immediately upon any amendment or variation of these Bond Terms give notice to the CSD of any such amendment or variation.

      
        
          	5.3	
                  Country of issuance

                

        

      

      The Bonds have not been issued under any other country’s legislation than that of the Relevant
          Jurisdiction. Save for the registration of the Bonds in the CSD, the Issuer is under no obligation to register, or cause the registration of, the Bonds in any other registry or under any other legislation than that of the Relevant Jurisdiction.

      
        
          	6.	
                  CONDITIONS FOR DISBURSEMENT

                

        

      

      
        
          	6.1	
                  Conditions precedent for disbursement to the Issuer

                

        

      

      
        
          	

                	(a)	
                  Payment of the net proceeds from the issuance of the Bonds to the Issuer shall be conditional on the Bond Trustee having received in due time (as determined by the
                      Bond Trustee) prior to the Issue Date each of the following documents, in form and substance satisfactory to the Bond Trustee:

                

        

      

      
        
          	

                	(i)	
                  these Bond Terms duly executed by all parties hereto;

                

        

      

      
        
          	

                	(ii)	
                  certified copies of all necessary corporate resolutions of the Issuer to issue the Bonds and execute the Finance Documents to which it is a party;

                

        

      

      
        
          	

                	(iii)	
                  a certified copy of a power of attorney (unless included in the corporate resolutions) from the Issuer to relevant individuals for their execution of the Finance
                      Documents to which it is a party, or extracts from the relevant register or similar documentation evidencing such individuals’ authorisation to execute such Finance Documents on behalf of the Issuer;

                

        

      

      
        
          	

                	(iv)	
                  certified copies of the Issuer's articles of association and of a full extract from the relevant company register in respect of the Issuer evidencing that the
                      Issuer is validly existing;

                

        

      

      
        
          	

                	(v)	
                  confirmation from the Issuer that no potential or actual Event of Default has occurred or is likely to occur as a result of the issuance of the Bonds;

                

        

      

      
        
          	

                	(vi)	
                  copies of the Issuer’s latest Financial Reports (if any);

                

        

      

      
        
          	

                	(vii)	
                  confirmation that the applicable prospectus exemption requirements (ref the EU prospectus directive (2003/71 EC)) concerning the issuance of the Bonds have been
                      fulfilled;

                

        

      

      
        36

        
          

      

      

      

      
        
          	

                	(viii)	
                  copies of any necessary governmental approval, consent or waiver (as the case may be) required at such time to issue the Bonds;

                

        

      

      
        
          	

                	(ix)	
                  confirmation that the Bonds are registered in the CSD;

                

        

      

      
        
          	

                	(x)	
                  copies of any written documentation used in marketing the Bonds or made public by the Issuer or any Manager in connection with the issuance of the Bonds;

                

        

      

      
        
          	

                	(xi)	
                  the Bond Trustee Fee Agreement duly executed by the parties thereto; and

                

        

      

      
        
          	

                	(xii)	
                  legal opinions or other statements as may be required by the Bond Trustee (including in respect of corporate matters relating to the Issuer and the legality,
                      validity and enforceability of these Bond Terms and the Finance Documents).

                

        

      

      
        
          	

                	(b)	
                  The Bond Trustee, acting in its reasonable discretion, may, regarding this Clause 6.1 (Conditions precedent for disbursement to the Issuer), waive the requirements for documentation, or decide in its discretion that delivery of certain documents shall be made subject to an agreed closing
                      procedure between the Bond Trustee and the Issuer

                

        

      

      
        
          	6.2	
                  Distribution

                

        

      

      Disbursement of the proceeds from the issuance of the Bonds is conditional on the Bond Trustee’s
          confirmation to the Paying Agent that the conditions in Clause 6.1 (Conditions precedent for disbursement to the Issuer) have been either satisfied
          in the Bond Trustee’s discretion or waived by the Bond Trustee pursuant to paragraph (b) of Clause 6.1 above.

      
        
          	6.3	
                  Tap Issues

                

        

      

      The Issuer may issue Additional Bonds if:

      
        
          	

                	(a)	
                  the Bond Trustee has executed a Tap Issue Addendum; and

                

        

      

      
        
          	

                	(b)	
                  the representations and warranties contained in Clause 7 (Representations
                        and Warranties) of these Bond Terms are true and correct in all material respects and repeated by the Issuer as at the date of issuance of such Additional Bonds.

                

        

      

      
        
          	7.	
                  REPRESENTATIONS AND WARRANTIES

                

        

      

      The Issuer makes the representations and warranties set out in this Clause 7 (Representations and warranties), in respect of itself, to the Bond Trustee (on behalf of the Bondholders) at the following times and with reference to the facts and
          circumstances then existing:

      
        
          	

                	(a)	
                  at the date of these Bond Terms;

                

        

      

      
        
          	

                	(b)	
                  at the Issue Date; and

                

        

      

      
        
          	

                	(c)	
                  at the date of issuance of any Additional Bonds.

                

        

      

      
        37

        
          

      

      

      

      
        
          	7.1	
                  Status

                

        

      

      It is a Marshall Islands incorporation, duly incorporated and validly existing and registered under the
          laws of its jurisdiction of incorporation, and has the power to own its assets and carry on its business as it is being conducted.

      
        
          	7.2	
                  Power and authority

                

        

      

      It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its
          entry into, performance and delivery of, this Bond Terms and any other Finance Document to which it is a party and the transactions contemplated by those Finance Documents.

      
        
          	7.3	
                  Valid, binding and enforceable obligations

                

        

      

      These Bond Terms and each other Finance Document to which it is a party constitutes (or will constitute,
          when executed by the respective parties thereto) its legal, valid and binding obligations, enforceable in accordance with their respective terms, and (save as provided for therein) no further registration, filing, payment of tax or fees or other
          formalities are necessary or desirable to render the said documents enforceable against it.

      
        
          	7.4	
                  Non-conflict with other obligations

                

        

      

      The entry into and performance by it of these Bond Terms and any other Finance Document to which it is a
          party and the transactions contemplated thereby do not and will not conflict with (i) any law or regulation or judicial or official order; (ii) its constitutional documents; or (iii) any agreement or instrument which is binding upon it or any of
          its assets.

      
        
          	7.5	
                  No Event of Default

                

        

      

      
        
          	

                	(a)	
                  No Event of Default exists or is likely to result from the making of any drawdown under these Bond Terms or the entry into, the performance of, or any transaction
                      contemplated by, any Finance Document.

                

        

      

      
        
          	

                	(b)	
                  No other event or circumstance has occurred which constitutes (or with the expiry of any grace period, the giving of notice, the making of any determination or any
                      combination of any of the foregoing, would constitute) a default or termination event (howsoever described) under any other agreement or instrument which is binding on it or any of its Subsidiaries or to which its (or any of its
                      Subsidiaries’) assets are subject which has or is likely to have a Material Adverse Effect.

                

        

      

      
        
          	7.6	
                  Authorizations and consents

                

        

      

      All authorisations, consents, approvals, resolutions, licenses, exemptions, filings, notarizations or
          registrations required:

      
        
          	

                	(a)	
                  to enable it to enter into, exercise its rights and comply with its obligations under this Bond Terms or any other Finance Document to which it is a party; and

                

        

      

      
        
          	

                	(b)	
                  to carry on its business as presently conducted and as contemplated by these Bond Terms,

                

        

      

      have been obtained or effected and are in full force and effect.

      
        38

        
          

      

      

      

      
        
          	7.7	
                  Litigation

                

        

      

      No litigation, arbitration or administrative proceedings or investigations of or before any court,
          arbitral body or agency which, if adversely determined, is likely to have a Material Adverse Effect have (to the best of its knowledge and belief) been started or threatened against it or any of its Subsidiaries.

      
        
          	7.8	
                  Financial Reports

                

        

      

      Its most recent Financial Reports fairly and accurately represent the assets and liabilities and financial
          condition as at their respective dates, and have been prepared in accordance with GAAP, consistently applied.

      
        
          	7.9	
                  No Material Adverse Effect

                

        

      

      Since the date of the most recent Financial Reports, there has been no change in its business, assets or
          financial condition that is likely to have a Material Adverse Effect.

      
        
          	7.10	
                  No misleading information

                

        

      

      Any factual information provided by it to the Bondholders or the Bond Trustee for the purposes of the
          issuance of the Bonds was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated.

      
        
          	7.11	
                  No withholdings

                

        

      

      The Issuer is not required to make any deduction or withholding from any payment which it may become
          obliged to make to the Bond Trustee or the Bondholders under these Bond Terms.

      
        
          	7.12	
                  Pari passu ranking

                

        

      

      Its payment obligations under these Bond Terms or any other Finance Document to which it is a party ranks
          as set out in Clause 2.4.

      
        
          	7.13	
                  Security

                

        

      

      No Security exists over any of the present assets of any Group Company in conflict with these Bond Terms.

      
        
          	8.	
                  PAYMENTS IN RESPECT OF THE BONDS

                

        

      

      
        
          	8.1	
                  Covenant to pay

                

        

      

      
        
          	

                	(a)	
                  The Issuer will unconditionally make available to or to the order of the Bond Trustee and/or the Paying Agent all amounts due on each Payment Date pursuant to the
                      terms of these Bond Terms at such times and to such accounts as specified by the Bond Trustee and/or the Paying Agent in advance of each Payment Date or when other payments are due and payable pursuant to these Bond Terms.

                

        

      

      
        
          	

                	(b)	
                  All payments to the Bondholders in relation to the Bonds shall be made to each Bondholder registered as such in the CSD at the Relevant Record Date, by, if no
                      specific order is made by the Bond Trustee, crediting the relevant amount to the bank account nominated by such Bondholder in connection with its securities account in the CSD.

                

        

      

      
        39

        
          

      

      

      

      
        
          	

                	(c)	
                  Payment constituting good discharge of the Issuer’s payment obligations to the Bondholders under these Bond Terms will be deemed to have been made to each
                      Bondholder once the amount has been credited to the bank holding the bank account nominated by the Bondholder in connection with its securities account in the CSD. If the paying bank and the receiving bank are the same, payment shall
                      be deemed to have been made once the amount has been credited to the bank account nominated by the Bondholder in question.

                

        

      

      
        
          	

                	(d)	
                  If a Payment Date or a date for other payments to the Bondholders pursuant to the Finance Documents falls on a day on which either of the relevant CSD settlement
                      system or the relevant currency settlement system for the Bonds are not open, the payment shall be made on the first following possible day on which both of the said systems are open, unless any provision to the contrary have been set
                      out for such payment in the relevant Finance Document.

                

        

      

      
        
          	8.2	
                  Default interest

                

        

      

      
        
          	

                	(a)	
                  Default interest will accrue on any Overdue Amount from and including the Payment Date on which it was first due to and excluding the date on which the payment is
                      made at the Interest Rate plus an additional three (3) per cent. per annum.

                

        

      

      
        
          	

                	(b)	
                  Default interest accrued on any Overdue Amount pursuant to this Clause 8.2 (Default interest) will be added to the Overdue Amount on each Interest Payment Date until the Overdue Amount and default interest accrued thereon have been repaid in full.

                

        

      

      
        
          	8.3	
                  Partial Payments

                

        

      

      
        
          	

                	(a)	
                  If the Paying Agent or the Bond Trustee receives a Partial Payment, such Partial Payment shall, in respect of the Issuer’s debt under the Finance Documents be
                      considered made for discharge of the debt of the Issuer in the following order of priority:

                

        

      

      
        
          	

                	(i)	
                  firstly, towards any outstanding fees, liabilities and expenses of the Bond Trustee;

                

        

      

      
        
          	

                	(ii)	
                  secondly, towards accrued interest due but unpaid; and

                

        

      

      
        
          	

                	(iii)	
                  thirdly, towards any principal amount due but unpaid.

                

        

      

      
        
          	

                	(b)	
                  Notwithstanding paragraph (a) above, any Partial Payment which is distributed to the Bondholders, shall, after the above mentioned deduction of outstanding fees,
                      liabilities and expenses, be applied (i) firstly towards any principal amount due but unpaid and (ii) secondly, towards accrued interest due but unpaid, in the following situations;

                

        

      

      
        
          	

                	(i)	
                  the Bond Trustee has served a Default Notice in accordance with Clause 14.2 (Acceleration of the Bonds), or

                

        

      

      
        
          	

                	(ii)	
                  as a result of a resolution according to Clause 15 (Bondholders’
                        decisions).

                

        

      

      
        40

        
          

      

      

      

      
        
          	8.4	
                  Taxation

                

        

      

      
        
          	

                	(a)	
                  The Issuer is responsible for withholding any withholding tax imposed by applicable law on any payments to be made by it in relation to the Finance Documents.

                

        

      

      
        
          	

                	(b)	
                  The Issuer shall, if any tax is withheld in respect of the Bonds under the Finance Documents:

                

        

      

      
        
          	

                	(i)	
                  gross up the amount of the payment due from it up to such amount which is necessary to ensure that the Bondholders or the Bond Trustee, as the case may be, receive
                      a net amount which is (after making the required withholding) equal to the payment which would have been received if no withholding had been required; and

                

        

      

      
        
          	

                	(ii)	
                  at the request of the Bond Trustee, deliver to the Bond Trustee evidence that the required tax deduction or withholding has been made.

                

        

      

      
        
          	

                	(b)	
                  Any public fees levied on the trade of Bonds in the secondary market shall be paid by the Bondholders, unless otherwise provided by law or regulation, and the
                      Issuer shall not be responsible for reimbursing any such fees.

                

        

      

      
        
          	8.5	
                  Currency

                

        

      

      
        
          	

                	(a)	
                  All amounts payable under the Finance Documents shall be payable in the denomination of the Bonds set out in Clause 2.1 (Amount, denomination and ISIN of the Bonds). If, however, the denomination differs from the currency of the bank account connected to the Bondholder’s account in the CSD,
                      any cash settlement may be exchanged and credited to this bank account.

                

        

      

      
        
          	

                	(b)	
                  Any specific payment instructions, including foreign exchange bank account details, to be connected to the Bondholder's account in the CSD must be provided by the
                      relevant Bondholder to the Paying Agent (either directly or through its account manager in the CSD) within five (5) Business Days prior to a Payment Date. Depending on any currency exchange settlement agreements between each
                      Bondholder’s bank and the Paying Agent, and opening hours of the receiving bank, cash settlement may be delayed, and payment shall be deemed to have been made once the cash settlement has taken place, provided, however, that no
                      default interest or other penalty shall accrue for the account of the Issuer for such delay.

                

        

      

      
        
          	8.6	
                  Set-off and counterclaims

                

        

      

      The Issuer may not apply or perform any counterclaims or set-off against any payment obligations pursuant
          to these Bond Terms or any other Finance Document.

      
        
          	9.	
                  INTEREST

                

        

      

      
        
          	9.1	
                  Calculation of interest

                

        

      

      
        
          	

                	(a)	
                  Each Outstanding Bond will accrue interest at the Interest Rate on the Nominal Amount for each Interest Period, commencing on and including the first date of the
                      Interest Period, and ending on but excluding the last date of the Interest Period.

                

        

      

      
        41

        
          

      

      

      

      
        
          	

                	(b)	
                  Interest will accrue on the Nominal Amount of any Additional Bond for each Interest Period starting with the Interest Period commencing on the Interest Payment
                      Date immediately prior to the issuance of the Additional Bonds (or, if the date of the issuance is not an Interest Payment Date and there is no Interest Payment Date prior to such date of issuance, starting with the Interest Period
                      commencing on the Issue Date).

                

        

      

      
        
          	

                	(c)	
                  Interest shall be calculated on the basis of a 360-day year comprised of twelve months of thirty (30) days each and, in case of an incomplete month, the actual
                      number of days elapsed (30/360-days basis).

                

        

      

      
        
          	9.2	
                  Payment of interest

                

        

      

      Interest shall fall due on each Interest Payment Date for the corresponding preceding Interest Period and,
          with respect to accrued interest on the principal amount then due and payable, on each Repayment Date.

      
        
          	10.	
                  REDEMPTION AND REPURCHASE OF BONDS

                

        

      

      
        
          	10.1	
                  Redemption of Bonds

                

        

      

      The Outstanding Bonds will mature in full on the Maturity Date and shall be redeemed by the Issuer on the
          Maturity Date at a price equal to 100 per cent. of the Nominal Amount (plus accrued interest on redeemed Bonds).

      
        
          	10.2	
                  Voluntary early redemption - Call Option

                

        

      

      
        
          	

                	(a)	
                  The Issuer may redeem the Outstanding Bonds (in whole or in parts) (the “Call

                        Option”) on any Business Day at any time from and including:

                

        

      

      
        
          	

                	(i)	
                  the Interest Payment Date falling 3 years after the Issue Date to, but not including, the Interest Payment Date falling 4 years after the Issue Date at a price
                      equal to 103.8% of the Nominal Amount (plus accrued interest on the redeemed Bonds);

                

        

      

      
        
          	

                	(ii)	
                  the Interest Payment Date falling 4 years after the Issue Date to, but not including, the Interest Payment Date falling 4 years and 6 months after the Issue Date
                      at a price equal to 101.9% of the Nominal Amount (plus accrued interest on the redeemed Bonds);

                

        

      

      
        
          	

                	(iii)	
                  the Interest Payment Date falling 4 years and 6 months after the Issue Date to, but not including, the Maturity Date at a price equal to 100% of the Nominal Amount
                      (plus accrued interest on the redeemed Bonds).

                

        

      

      
        
          	

                	(b)	
                  Any redemption of Bonds pursuant to Clause 10.2 (a) above shall be determined based upon the redemption prices applicable on the Call Option Repayment Date.

                

        

      

      
        
          	

                	(c)	
                  The Call Option may be exercised by the Issuer by written notice to the Bond Trustee and the Bondholders at least ten (10), but not more than twenty (20), Business
                      Days prior to the proposed Call Option Repayment Date. Such notice sent by the Issuer is irrevocable and shall specify the Call Option Repayment Date.

                

        

      

      
        42

        
          

      

      

      

      
        
          	

                	(d)	
                  Any Call Option exercised in part will be used for pro rata payment to the Bondholders in accordance with the applicable regulations of the CSD.

                

        

      

      
        
          	10.3	
                  Mandatory repurchase due to a Put Option Event

                

        

      

      
        
          	

                	(a)	
                  Upon the occurrence of a Put Option Event, each Bondholder will have the right (the “Put Option”) to require that the Issuer purchases all or some of the Bonds held by that Bondholder at a price equal to 101 per cent. of the Nominal Amount.

                

        

      

      
        
          	

                	(b)	
                  The Put Option must be exercised within thirty (30) calendar days after the Issuer has given notice to the Bond Trustee and the Bondholders that a Put Option Event
                      has occurred pursuant to Clause 12.3 (Put Option Event). Once notified, the Bondholders’ right to exercise the Put Option is irrevocable
                      and will not be affected by any subsequent events related to the Issuer.

                

        

      

      
        
          	

                	(c)	
                  Each Bondholder may exercise its Put Option by written notice to its account manager for the CSD, who will notify the Paying Agent of the exercise of the Put
                      Option. The Put Option Repayment Date will be the fifth (5) Business Day after the end of the thirty (30) calendar days exercise period referred to in paragraph (b) above. However, the settlement of the Put Option will be based on
                      each Bondholders holding of Bonds at the Put Option Repayment Date.

                

        

      

      
        
          	

                	(d)	
                  If Bonds representing more than 90 per cent. of the Outstanding Bonds have been repurchased pursuant to this Clause 10.3 (Mandatory repurchase due to a Put Option Event), the Issuer is entitled to repurchase all the remaining Outstanding Bonds at the price stated in paragraph (a) above (plus
                      accrued interest) by notifying the remaining Bondholders of its intention to do so no later than twenty (20) calendar days after the Put Option Repayment Date. Such prepayment may occur at the earliest on the fifteenth (15th ) calendar day following the date of such notice.

                

        

      

      
        
          	10.4	
                  Early redemption option due to a tax event

                

        

      

      If the Issuer is or will be required to gross up any withheld tax imposed by law from any payment in
          respect of the Bonds under the Finance Documents pursuant to Clause 8.4 (Taxation) as a result of a change in applicable law implemented after the
          date of these Bond Terms, the Issuer will have the right to redeem all, but not only some, of the Outstanding Bonds at a price equal to 100 per cent. of the Nominal Amount. The Issuer shall give written notice of such redemption to the Bond
          Trustee and the Bondholders at least twenty (20) Business Days prior to the Tax Event Repayment Date, provided that no such notice shall be given earlier than sixty (60) days prior to the earliest date on which the Issuer would be obliged to
          withhold such tax were a payment in respect of the Bonds then due.

      
        
          	11.	
                  PURCHASE AND TRANSFER OF BONDS

                

        

      

      
        
          	11.1	
                  Issuer's purchase of Bonds

                

        

      

      The Issuer may purchase and hold Bonds and such Bonds may be retained or sold in the Issuer's sole
          discretion (including with respect to Bonds purchased pursuant to Clause 10.3 (Mandatory repurchase due to a Put Option Event)).

      
        43

        
          

      

      

      

      
        
          	11.2	
                  Restrictions

                

        

      

      
        
          	

                	(a)	
                  Certain purchase or selling restrictions may apply to Bondholders under applicable local laws and regulations from time to time. Neither the Issuer nor the Bond
                      Trustee shall be responsible to ensure compliance with such laws and regulations and each Bondholder is responsible for ensuring compliance with the relevant laws and regulations at its own cost and expense.

                

        

      

      
        
          	

                	(b)	
                  A Bondholder who has purchased Bonds in breach of applicable restrictions may, notwithstanding such breach, benefit from the rights attached to the Bonds pursuant
                      to these Bond Terms (including, but not limited to, voting rights), provided that the Issuer shall not incur any additional liability by complying with its obligations to such Bondholder.

                

        

      

      
        
          	12.	
                  INFORMATION UNDERTAKINGS

                

        

      

      
        
          	12.1	
                  Financial Reports

                

        

      

      
        
          	

                	(a)	
                  The Issuer shall prepare Annual Financial Statements in the English language and make them available on its website (alternatively on another relevant information
                      platform) as soon as they become available, and not later than hundred and twenty (120) days after the end of the financial year.

                

        

      

      
        
          	

                	(b)	
                  The Issuer shall prepare Interim Accounts in the English language and make them available on its website (alternatively on another relevant information platform)
                      as soon as they become available, and not later than sixty (60) days after the end of the relevant interim period.

                

        

      

      
        
          	12.2	
                  Requirements as to Financial Reports

                

        

      

      The Issuer shall supply to the Bond Trustee, in connection with the publication of its Interim Accounts
          pursuant to Clause 12.1 (b) (Financial Reports), a Compliance Certificate with a copy of the Interim Accounts attached thereto. The Compliance
          Certificate shall be duly signed by the chief executive officer or the chief financial officer of the Issuer, certifying inter alia that the Interim Accounts are fairly representing its financial condition as at the date of those financial
          statements.

      
        
          	12.3	
                  Put Option Event

                

        

      

      The Issuer shall inform the Bond Trustee in writing as soon as possible after becoming aware that a Put
          Option Event has occurred.

      
        
          	12.4	
                  Information: Miscellaneous

                

        

      

      The Issuer shall:

      
        
          	

                	(a)	
                  promptly inform the Bond Trustee in writing of any Event of Default or any event or circumstance which the Issuer understands or could reasonably be expected to
                      understand may lead to an Event of Default and the steps, if any, being taken to remedy it;

                

        

      

      
        
          	

                	(b)	
                  at the request of the Bond Trustee, report the balance of the Issuer’s Bonds (to the best of its knowledge, having made due and appropriate enquiries);

                

        

      

      
        44

        
          

      

      

      

      
        
          	

                	(c)	
                  send the Bond Trustee copies of any statutory notifications of the Issuer, including but not limited to in connection with mergers, de-mergers and reduction of the
                      Issuer’s share capital or equity;

                

        

      

      
        
          	

                	(d)	
                  if the Bonds are listed on the Exchange, send a copy to the Bond Trustee of its notices to the Exchange;

                

        

      

      
        
          	

                	(e)	
                  if the Issuer and/or the Bonds are rated, inform the Bond Trustee of its and/or the rating of the Bonds, and any changes to such rating;

                

        

      

      
        
          	

                	(f)	
                  inform the Bond Trustee of changes in the registration of the Bonds in the CSD; and

                

        

      

      
        
          	

                	(g)	
                  within a reasonable time, provide such information about the Issuer’s and the Group’s business, assets and financial condition as the Bond Trustee may reasonably
                      request.

                

        

      

      
        
          	13.	
                  GENERAL AND FINANCIAL UNDERTAKINGS

                

        

      

      The Issuer undertakes to (and shall, where applicable, procure that the other Group Companies will) comply
          with the undertakings set forth in this Clause 13 (General and financial Undertakings).

      
        
          	13.1	
                  Authorisations

                

        

      

      The Issuer shall, and shall procure that each other Group Company will, in all material respects obtain,
          maintain and comply with the terms of any authorisation, approval, license and consent required for the conduct of its business as carried out from time to time if a failure to do so would have Material Adverse Effect.

      
        
          	13.2	
                  Compliance with laws

                

        

      

      The Issuer shall, and shall procure that each other Group Company shall, carry on its business in
          accordance with acknowledged, careful and sound practices in all aspects and comply in all respects with all laws and regulations to which it may be subject from time to time, if failure so to comply would have a Material Adverse Effect.

      
        
          	13.3	
                  Continuation of business

                

        

      

      The Issuer shall procure that no material change is made to the general nature of the business from that
          carried on by the Group and/or the Issuer at the date of these Bond Terms.

      
        
          	13.4	
                  Corporate status

                

        

      

      The Issuer shall not change its type of organisation or jurisdiction of organisation.

      
        
          	13.5	
                  Mergers and de-mergers

                

        

      

      The Issuer shall not, and shall procure that no other Group Company will, carry out:

      
        
          	

                	(a)	
                  any merger or other business combination or corporate reorganisation involving the consolidation of assets and obligations of the Issuer or any other Group Company
                      with any other companies or entities; or

                

        

      

      
        45

        
          

      

      

      

      
        
          	

                	(b)	
                  any de-merger or other corporate reorganisation having the same or equivalent effect as a demerger involving a split of the Issuer or any other Group Company into
                      two or more separate companies or entities;

                

        

      

      if such merger, de-merger, combination or reorganisation would have a Material Adverse Effect.

      
        
          	13.6	
                  Litigation

                

        

      

      The Issuer shall, promptly upon becoming aware of them, send the Bond Trustee such relevant details of
          any:

      
        
          	

                	(a)	
                  litigations, arbitrations or administrative proceedings which have been or might be started by or against any Group Company and which, if decided adversely is
                      likely to have a Material Adverse Effect; and

                

        

      

      
        
          	

                	(b)	
                  other events which have occurred or might occur and which is likely to have a Material Adverse Effect.

                

        

      

      
        
          	13.7	
                  Financial Indebtedness

                

        

      

      
        
          	

                	(a)	
                  Except as permitted under paragraph (b) below, the Issuer shall not, and shall procure that no other Group Company will, incur any additional Financial
                      Indebtedness or maintain or prolong any existing Financial Indebtedness.

                

        

      

      
        
          	

                	(b)	
                  Paragraph (a) above shall not prohibit any Group Company to incur, maintain or prolong any Permitted Financial Indebtedness.

                

        

      

      
        
          	13.8	
                  Negative pledge

                

        

      

      
        
          	

                	(a)	
                  Except as permitted under paragraph (b) below, the Issuer shall not, and shall procure that no other Group Company will, create or allow to subsist, retain,
                      provide, prolong or renew any Security over any of its/their assets (whether present or future).

                

        

      

      
        
          	

                	(b)	
                  Paragraph (a) above does not apply to Security granted to secure any of the following:

                

        

      

      
        
          	

                	(i)	
                  Permitted Security;

                

        

      

      
        
          	

                	(ii)	
                  any netting or set-off arrangements entered into by the Issuer or any other Group Company (as the case may be) in the ordinary course of its banking arrangements
                      for the purposes of netting debt and credit balances of the Issuer (if applicable); and

                

        

      

      
        
          	

                	(iii)	
                  any lien arising by operation of law.

                

        

      

      
        
          	13.9	
                  Financial support

                

        

      

      
        
          	

                	(a)	
                  Except as permitted under paragraph (b) below, the Issuer shall not, and shall procure that no other Group Company shall, be a creditor in respect of any Financial
                      Support to or for the benefit of any third party or other Group Company.

                

        

      

      
        
          	

                	(b)	
                  Paragraph (a) above does not apply to any:

                

        

      

      
        46

        
          

      

      

      

      
        
          	

                	(i)	
                  Permitted Financial Indebtedness; and

                

        

      

      
        
          	

                	(ii)	
                  in the ordinary course of business.

                

        

      

      
        
          	13.10	
                  Distribution restrictions

                

        

      

      The Issuer shall not declare or make any Distributions if:

      
        
          	

                	(a)	
                  an Event of Default or an event or circumstance which, with the giving of any notice or the lapse of time, would constitute an Event of Default (a "Default") has occurred and is continuing;

                

        

      

      
        
          	

                	(b)	
                  an Event of Default or a Default would result therefrom;

                

        

      

      
        
          	

                	(c)	
                  the Issuer is not in compliance with the financial covenants set out in Clause 13.16 (Financial covenants);

                

        

      

      
        
          	

                	(d)	
                  the making of any Distribution by the Issuer or a Subsidiary would result in the Issuer not being in compliance with the financial covenants set out in Clause
                      13.16 (Financial covenants); or

                

        

      

      
        
          	

                	(e)	
                  as a result of a Distribution by the Issuer or a Subsidiary, except a Preferred Share Distribution, the Remaining Cash Position is less than the Remaining Cash
                      Requirement.

                

        

      

      
        
          	13.11	
                  Subsidiary restrictions

                

        

      

      Save for obligations under any Financial Indebtedness, the Issuer shall not permit any Subsidiary to
          create or permit to exist any contractual obligation (or encumbrance) restricting the right of any Subsidiary to:

      
        
          	

                	(a)	
                  pay dividends or make Distributions to its shareholders;

                

        

      

      
        
          	

                	(b)	
                  service any Financial Indebtedness to the Issuer;

                

        

      

      
        
          	

                	(c)	
                  make any loans to the Issuer; or

                

        

      

      
        
          	

                	(d)	
                  transfer any of its assets and properties to the Issuer;

                

        

      

      if the creation of such contractual obligation is reasonably likely to prevent the Issuer from complying
          with its payment obligations under these Bond Terms.

      
        
          	13.12	
                  Arm`s length transactions

                

        

      

      The Issuer shall not, and the Issuer shall procure that no other Group Company shall, enter into
          transactions with any person except on arm`s length terms and for fair market value.

      
        
          	13.13	
                  Disposal

                

        

      

      The Issuer shall not, and shall procure that other Group Companies shall not, sell or otherwise dispose of
          all or substantially all of the Group`s assets or operations to any person not being a member of the Group, unless such sale, transfer or disposal is carried out in the ordinary course of business and would not have a Material Adverse Effect.

      
        47

        
          

      

      

      

      
        
          	13.14	
                  Listing

                

        

      

      The Issuer shall ensure that its ordinary shares remain listed on the New York Stock Exchange or another
          recognised stock exchange.

      
        
          	13.15	
                  Insurances

                

        

      

      The Issuer shall, and the Issuer shall procure that each Group Company will, maintain with reputable
          insurance companies, funds or underwriters adequate insurance or captive arrangements with respect to its assets, equipment and business against such liabilities, casualties and contingencies and of such types and in such amounts as are
          consistent with prudent business practice in their relevant jurisdiction.

      
        
          	13.16	
                  Financial Covenants

                

        

      

      
        
          	

                	(a)	
                  The Issuer shall comply with the following:

                

        

      

      
        
          	

                	(i)	
                  Minimum Liquidity

                

        

      

      Minimum Liquidity shall not be less than USD 10,000,000.

      
        
          	

                	(ii)	
                  Tangible Net Worth

                

        

      

      Tangible Net Worth of the Group shall exceed 20% of Total Assets.

      
        
          	

                	(iii)	
                  Net Borrowings to Total Assets

                

        

      

      Net Borrowings to Total Assets shall not exceed 70%.

      
        
          	

                	(b)	
                  The Issuer undertakes to comply with the above financial covenants at all times, such compliance to be measured on each Quarter Date and certified by the Issuer by
                      delivery of a Compliance Certificate, setting out (in reasonably detail) computations evidencing compliance with the financial covenants, with the delivery of each Financial Report within the reporting dates set out in Clause 12.1 (Financial Reports). The financial covenants shall be calculated on a consolidated basis for the Group during the lifetime of the Bonds.

                

        

      

      
        
          	14.	
                  EVENTS OF DEFAULT AND ACCELERATION OF THE BONDS

                

        

      

      
        
          	14.1	
                  Events of Default

                

        

      

      Each of the events or circumstances set out in this Clause 14.1 shall constitute an Event of Default:

      
        
          	

                	(a)	
                  Non-payment

                

        

      

      The Issuer fails to pay any amount payable by it under the Finance Documents when such amount is due for
          payment, unless:

      
        
          	

                	(i)	
                  its failure to pay is caused by administrative or technical error in payment systems or the CSD and payment is made within five (5) Business Days following the
                      original due date; or

                

        

      

      
        48

        
          

      

      

      

      
        
          	

                	(ii)	
                  in the discretion of the Bond Trustee, the Issuer has substantiated that it is likely that such payment will be made in full within five (5) Business Days
                      following the original due date.

                

        

      

      
        
          	

                	(b)	
                  Breach of other obligations

                

        

      

      

        The Issuer does not comply with any provision of the Finance Documents other than set out under paragraph (a) (Non-payment) above, unless such failure is capable of being remedied and is remedied within twenty (20) Business Days after the earlier of the Issuer’s
          actual knowledge thereof, or notice thereof is given to the Issuer by the Bond Trustee

      

      
        
          	

                	(c)	
                  Misrepresentation

                

        

      

      

        Any representation, warranty or statement (including statements in Compliance Certificates) made under or in
          connection with any Finance Documents is or proves to have been incorrect, inaccurate or misleading in any material respect when made or deemed to have been made, unless the circumstances giving rise to the misrepresentation are capable of remedy
          and are remedied within twenty (20) Business Days of the earlier of the Bond Trustee giving notice to the Issuer or the Issuer becoming aware of such misrepresentation.

      

      
        
          	

                	(d)	
                  Cross default

                

        

      

      If for a Group Company:

      
        
          	

                	(i)	
                  any Financial Indebtedness is not paid when due nor within any applicable grace period; or

                

        

      

      
        
          	

                	(ii)	
                  any Financial Indebtedness is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however
                      described); or

                

        

      

      
        
          	

                	(iii)	
                  any commitment for any Financial Indebtedness is cancelled or suspended by a creditor as a result of an event of default (however described), or

                

        

      

      
        
          	

                	(iv)	
                  any creditor becomes entitled to declare any Financial Indebtedness due and payable prior to its specified maturity as a result of an event of default (however
                      described),

                

        

      

      provided however that the amount of such Financial Indebtedness or commitment for Financial Indebtedness
          falling within paragraphs (i) to (iv) above singly exceeds USD 20,000,000 (or the equivalent thereof in any other currency).

      
        
          	

                	(e)	
                  Insolvency and insolvency proceedings

                

        

      

      The Issuer, and in respect of a Group Company only if such event results in a Material Adverse Effect:

      
        
          	

                	(i)	
                  is Insolvent; or

                

        

      

      
        49

        
          

      

      

      

      
        
          	

                	(ii)	
                  is object of any corporate action or any legal proceedings is taken in relation to:

                

        

      

      
        
          	

                	(A)	
                  the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of
                      arrangement or otherwise) other than a solvent liquidation or reorganization; or

                

        

      

      
        
          	

                	(B)	
                  a composition, compromise, assignment or arrangement with any creditor which may materially impair its ability to perform its obligations under these Bond Terms;
                      or

                

        

      

      
        
          	

                	(C)	
                  the appointment of a liquidator (other than in respect of a solvent liquidation), receiver, administrative receiver, administrator, compulsory manager or other
                      similar officer of any of its assets; or

                

        

      

      
        
          	

                	(D)	
                  enforcement of any Security over any of its or their assets having an aggregate value exceeding the threshold amount set out in paragraph 14.1 (d) (Cross default) above; or

                

        

      

      
        
          	

                	(E)	
                  for (A) - (D) above, any analogous procedure or step is taken in any jurisdiction in respect of any such company,

                

        

      

      however this shall not apply to any petition which is frivolous or vexatious and is discharged, stayed or
          dismissed within twenty (20) Business Days of commencement.

      
        
          	

                	(f)	
                  Creditor’s process

                

        

      

      Any expropriation, attachment, sequestration, distress or execution affects any asset or assets of the
          Issuer and/or a Group Company, only if such event results in a Material Adverse Effect, having an aggregate value exceeding the threshold amount set out in paragraph 14.1 (d) (Cross default) above and is not discharged within twenty (20) Business Days.

      
        
          	

                	(g)	
                  Unlawfulness

                

        

      

      It is or becomes unlawful for the Issuer to perform or comply with any of its obligations under the
          Finance Documents to the extent this may materially impair:

      
        
          	

                	(i)	
                  the ability of the Issuer to perform its obligations under these Bond Terms; or

                

        

      

      
        
          	

                	(ii)	
                  the ability of the Bond Trustee to exercise any material right or power vested to it under the Finance Documents.

                

        

      

      
        
          	14.2	
                  Acceleration of the Bonds

                

        

      

      If an Event of Default has occurred and is continuing, the Bond Trustee may, in its discretion in order to
          protect the interests of the Bondholders, or upon instruction received from the Bondholders pursuant to Clause 14.3 (Bondholders’ instructions)
          below, by serving a Default Notice:

      
        50

        
          

      

      

      

      
        
          	

                	(a)	
                  declare that the Outstanding Bonds, together with accrued interest and all other amounts accrued or outstanding under the Finance Documents be immediately due and
                      payable, at which time they shall become immediately due and payable; and/or

                

        

      

      
        
          	

                	(b)	
                  exercise any or all of its rights, remedies, powers or discretions under the Finance Documents or take such further measures as are necessary to recover the
                      amounts outstanding under the Finance Documents.

                

        

      

      
        
          	14.3	
                  Bondholders’ instructions

                

        

      

      The Bond Trustee shall serve a Default Notice pursuant to Clause 14.2 (Acceleration of the Bonds) if:

      
        
          	

                	(a)	
                  the Bond Trustee receives a demand in writing from Bondholders representing a simple majority of the Voting Bonds, that an Event of Default shall be declared, and
                      a Bondholders' Meeting has not made a resolution to the contrary; or

                

        

      

      
        
          	

                	(b)	
                  the Bondholders' Meeting, by a simple majority decision, has approved the declaration of an Event of Default.

                

        

      

      
        
          	14.4	
                  Calculation of claim

                

        

      

      The claim derived from the Outstanding Bonds due for payment as a result of the serving of a Default
          Notice will be calculated at the prices set out in Clause 10.2 (Voluntary early redemption – Call Option) as applicable at the following dates (and
          regardless of the Default Repayment Date set out in the Default Notice):

      
        
          	

                	(i)	
                  for any Event of Default arising out of a breach of Clause 14.1 (Events
                        of Default) paragraph (a) (Non-payment), the claim will be calculated at the price applicable at the date when such Event of
                      Default occurred; and

                

        

      

      
        
          	

                	(ii)	
                  for any other Event of Default, the claim will be calculated at the price applicable at the date when the Default Notice was served by the Bond Trustee.

                

        

      

      
        
          	15.	
                  BONDHOLDERS’ DECISIONS

                

        

      

      
        
          	15.1	
                  Authority of the Bondholders' Meeting

                

        

      

      
        
          	

                	(a)	
                  A Bondholders' Meeting may, on behalf of the Bondholders, resolve to alter any of these Bond Terms, including, but not limited to, any reduction of principal or
                      interest and any conversion of the Bonds into other capital classes.

                

        

      

      
        
          	

                	(b)	
                  The Bondholders’ Meeting cannot resolve that any overdue payment of any instalment shall be reduced unless there is a pro rata reduction of the principal that has
                      not fallen due, but may resolve that accrued interest (whether overdue or not) shall be reduced without a corresponding reduction of principal.

                

        

      

      
        
          	

                	(c)	
                  The Bondholders' Meeting may not adopt resolutions which will give certain Bondholders an unreasonable advantage at the expense of other Bondholders.

                

        

      

      
        
          	

                	(d)	
                  Subject to the power of the Bond Trustee to take certain action as set out in Clause 16.1 (Power to represent the Bondholders), if a resolution by, or an approval of, the

                

        

      

      
        51

        
          

      

      

      

      Bondholders is required, such resolution may be passed at a Bondholders' Meeting. Resolutions passed at
          any Bondholders' Meeting will be binding upon all Bondholders.

      
        
          	

                	(e)	
                  At least 50 per cent. of the Voting Bonds must be represented at a Bondholders' Meeting for a quorum to be present.

                

        

      

      
        
          	

                	(f)	
                  Resolutions will be passed by simple majority of the Voting Bonds represented at the Bondholders' Meeting, unless otherwise set out in paragraph (g) below.

                

        

      

      
        
          	

                	(g)	
                  Save for any amendments or waivers which can be made without resolution pursuant to Clause 17.1 (Procedure for amendments and waivers) paragraph (a), section (i) and (ii), a majority of at least 2/3 of the Voting Bonds represented at the Bondholders' Meeting is required for approval of any
                      waiver or amendment of any provisions of these Bond Terms, including a change of Issuer and change of Bond Trustee.

                

        

      

      
        
          	15.2	
                  Procedure for arranging a Bondholders’ Meeting

                

        

      

      
        
          	

                	(a)	
                  A Bondholders' Meeting shall be convened by the Bond Trustee upon the request in writing of:

                

        

      

      
        
          	

                	(i)	
                  the Issuer;

                

        

      

      
        
          	

                	(ii)	
                  Bondholders representing at least 1/10 of the Voting Bonds;

                

        

      

      
        
          	

                	(iii)	
                  the Exchange, if the Bonds are listed and the Exchange is entitled to do so pursuant to the general rules and regulations of the Exchange; or

                

        

      

      
        
          	

                	(iv)	
                  the Bond Trustee.

                

        

      

      The request shall clearly state the matters to be discussed and resolved.

      
        
          	

                	(b)	
                  If the Bond Trustee has not convened a Bondholders' Meeting within ten (10) Business Days after having received a valid request for calling a Bondholders’ Meeting
                      pursuant to paragraph (a) above, then the re-questing party may itself call the Bondholders’ Meeting.

                

        

      

      
        
          	

                	(c)	
                  Summons to a Bondholders' Meeting must be sent no later than ten (10) Business Days prior to the proposed date of the Bondholders' Meeting. The Summons shall be
                      sent to all Bondholders registered in the CSD at the time the Summons is sent from the CSD. If the Bonds are listed, the Issuer shall ensure that the Summons is published in accordance with the applicable regulations of the Exchange.
                      The Summons shall also be published on the website of the Bond Trustee (alternatively by press release or other relevant information platform).

                

        

      

      
        
          	

                	(d)	
                  Any Summons for a Bondholders’ Meeting must clearly state the agenda for the Bondholders’ Meeting and the matters to be resolved. The Bond Trustee may include
                      additional agenda items to those requested by the person calling for the Bondholders’ Meeting in the Summons. If the Summons contains proposed amendments to these Bond Terms, a description of the proposed amendments must be set out in
                      the Summons.

                

        

      

      
        52

        
          

      

      

      

      
        
          	

                	(e)	
                  Items which have not been included in the Summons may not be put to a vote at the Bondholders' Meeting.

                

        

      

      
        
          	

                	(f)	
                  By written notice to the Issuer, the Bond Trustee may prohibit the Issuer from acquiring or dispose of Bonds during the period from the date of the Summons until
                      the date of the Bondholders' Meeting, unless the acquisition of Bonds is made by the Issuer pursuant to Clause 10 (Redemption and Repurchase of
                        Bonds).

                

        

      

      
        
          	

                	(g)	
                  A Bondholders' Meeting may be held on premises selected by the Bond Trustee, or if paragraph (b) above applies, by the person convening the Bondholders’ Meeting
                      (however to be held in the capital of the Relevant Jurisdiction). The Bondholders' Meeting will be opened and, unless otherwise decided by the Bondholders' Meeting, chaired by the Bond Trustee. If the Bond Trustee is not present, the
                      Bondholders' Meeting will be opened by a Bondholder and be chaired by a representative elected by the Bondholders' Meeting (the Bond Trustee or such other representative, the "Chairperson").

                

        

      

      
        
          	

                	(h)	
                  Each Bondholder, the Bond Trustee and, if the Bonds are listed, representatives of the Exchange, or any person or persons acting under a power of attorney for a
                      Bondholder, shall have the right to attend the Bondholders' Meeting (each a “Representative”). The Chairperson may grant access to the
                      meeting to other persons not being Representatives, unless the Bondholders' Meeting decides otherwise. In addition, each Representative has the right to be accompanied by an advisor. In case of dispute or doubt with regard to whether
                      a person is a Representative or entitled to vote, the Chairperson will decide who may attend the Bondholders' Meeting and exercise voting rights.

                

        

      

      
        
          	

                	(i)	
                  Representatives of the Issuer have the right to attend the Bondholders' Meeting. The Bondholders Meeting may resolve to exclude the Issuer’s representatives and/or
                      any person holding only Issuer's Bonds (or any representative of such person) from participating in the meeting at certain times, however, the Issuer’s representative and any such other person shall have the right to be present during
                      the voting.

                

        

      

      
        
          	

                	(j)	
                  Minutes of the Bondholders' Meeting must be recorded by, or by someone acting at the instruction of, the Chairperson. The minutes must state the number of Voting
                      Bonds represented at the Bondholders' Meeting, the resolutions passed at the meeting, and the results of the vote on the matters to be decided at the Bondholders' Meeting. The minutes shall be signed by the Chairperson and at least
                      one other person. The minutes will be deposited with the Bond Trustee who shall make available a copy to the Bondholders and the Issuer upon request.

                

        

      

      
        
          	

                	(k)	
                  The Bond Trustee will ensure that the Issuer, the Bondholders and the Exchange are notified of resolutions passed at the Bondholders' Meeting and that the
                      resolutions are published on the website of the Bond Trustee (or other relevant electronically platform or press release).

                

        

      

      
        
          	

                	(l)	
                  The Issuer shall bear the costs and expenses incurred in connection with convening a Bondholders' Meeting regardless of who has convened the Bondholders’ Meeting,
                      including any reasonable costs and fees incurred by the Bond Trustee.

                

        

      

      
        53

        
          

      

      

      

      
        
          	15.3	
                  Voting rules

                

        

      

      
        
          	

                	(a)	
                  Each Bondholder (or person acting for a Bondholder under a power of attorney) may cast one vote for each Voting Bond owned on the Relevant Record Date, ref. Clause
                      3.3 (Bondholders’ rights). The Chairperson may, in its sole discretion, decide on accepted evidence of ownership of Voting Bonds.

                

        

      

      
        
          	

                	(b)	
                  Issuer's Bonds shall not carry any voting rights. The Chairperson shall determine any question concerning whether any Bonds will be considered Issuer's Bonds.

                

        

      

      
        
          	

                	(c)	
                  For the purposes of this Clause 15 (Bondholders’ decisions), a
                      Bondholder that has a Bond registered in the name of a nominee will, in accordance with Clause 3.3 (Bondholders’ rights), be deemed to be
                      the owner of the Bond rather than the nominee. No vote may be cast by any nominee if the Bondholder has presented relevant evidence to the Bond Trustee pursuant to Clause 3.3 (Bondholders’ rights) stating that it is the owner of the Bonds voted for. If the Bondholder has voted directly for any of its nominee registered Bonds, the Bondholder’s votes shall take
                      precedence over votes submitted by the nominee for the same Bonds.

                

        

      

      
        
          	

                	(d)	
                  Any of the Issuer, the Bond Trustee and any Bondholder has the right to demand a vote by ballot. In case of parity of votes, the Chairperson will have the deciding
                      vote.

                

        

      

      
        
          	15.4	
                  Repeated Bondholders’ Meeting

                

        

      

      
        
          	

                	(a)	
                  Even if the necessary quorum set out in paragraph (d) of Clause 15.1 (Authority

                        of the Bondholders’ Meeting) is not achieved, the Bondholders’ Meeting shall be held and voting completed for the purpose of recording the voting results in the minutes of the Bondholders’ Meeting. The Bond Trustee or the
                      person who convened the initial Bondholders' Meeting may, within ten (10) Business Days of that Bondholders’ Meeting, convene a repeated meeting with the same agenda as the first meeting.

                

        

      

      
        
          	

                	(b)	
                  The provisions and procedures regarding Bondholders’ Meetings as set out in Clause 15.1 (Authority of the Bondholders’ Meeting), Clause 15.2 (Procedure for arranging a Bondholders’ Meeting) and
                      Clause 15.3 (Voting rules) shall apply mutatis
                        mutandis to a repeated Bondholders’ Meeting, with the exception that the quorum requirements set out in paragraph (d) of Clause 15.1 (Authority

                        of the Bondholders’ Meeting) shall not apply to a repeated Bondholders' Meeting. A Summons for a repeated Bondholders’ Meeting shall also contain the voting results obtained in the initial Bondholders’ Meeting.

                

        

      

      
        
          	

                	(c)	
                  A repeated Bondholders’ Meeting may only be convened once for each original Bondholders’ Meeting. A repeated Bondholders’ Meeting may be convened pursuant to the
                      procedures of a Written Resolution in accordance with Clause 15.5 (Written Resolutions), even if the initial meeting was held pursuant to
                      the procedures of a Bondholders’ Meeting in accordance with Clause 15.2 (Procedure for arranging a Bondholders’ Meeting) and vice versa.

                

        

      

      
        
          	15.5	
                  Written Resolutions

                

        

      

      
        
          	

                	(a)	
                  Subject to these Bond Terms, anything which may be resolved by the Bondholders in a Bondholders’ Meeting pursuant to Clause 15.1 (Authority of the Bondholders’

                

        

      

      
        54

        
          

      

      

      

      Meeting)
          may also be resolved by way of a Written Resolution. A Written Resolution passed with the relevant majority is as valid as if it had been passed by the Bondholders in a Bondholders’ Meeting, and any reference in any Finance Document to a
          Bondholders’ Meeting shall be construed accordingly.

      
        
          	

                	(b)	
                  The person requesting a Bondholders’ Meeting may instead request that the relevant matters are to be resolved by Written Resolution only, unless the Bond Trustee
                      decides otherwise.

                

        

      

      
        
          	

                	(c)	
                  The Summons for the Written Resolution shall be sent to the Bondholders registered in the CSD at the time the Summons is sent from the CSD and published at the
                      Bond Trustee’s web site, or other relevant electronic platform or via press release.

                

        

      

      
        
          	

                	(d)	
                  The provisions set out in Clause 15.1 (Authority of the Bondholders’
                        Meeting), 15.2 (Procedure for arranging a Bondholder’s Meeting), Clause 15.3 (Voting Rules) and Clause 15.4 (Repeated Bondholders’ Meeting) shall apply mutatis mutandis to a Written Resolution, except that:

                

        

      

      
        
          	

                	(i)	
                  the provisions set out in paragraphs (g), (h) and (i) of Clause 15.2 (Procedure

                        for arranging Bondholders Meetings); or

                

        

      

      
        
          	

                	(ii)	
                  provisions which are otherwise in conflict with the requirements of this Clause 15.5 (Written Resolution),

                

        

      

      shall not apply to a Written Resolution.

      
        
          	

                	(e)	
                  The Summons for a Written Resolution shall include:

                

        

      

      
        
          	

                	(i)	
                  instructions as to how to vote to each separate item in the Summons (including instructions as to how voting can be done electronically if relevant); and

                

        

      

      
        
          	

                	(ii)	
                  the time limit within which the Bond Trustee must have received all votes necessary in order for the Written Resolution to be passed with the requisite majority
                      (the “Voting Period”), such Voting Period to be at least three (3) Business Days but not more than fifteen (15) Business Days from the
                      date of the Summons, provided however that the Voting Period for a Written Resolution summoned pursuant to Clause 15.4 (Repeated Bondholders’
                        Meeting) shall be at least ten (10) Business Days but not more than fifteen (15) Business Days from the date of the Summons.

                

        

      

      
        
          	

                	(f)	
                  Only Bondholders of Voting Bonds registered with the CSD on the Relevant Record Date, or the beneficial owner thereof having presented relevant evidence to the
                      Bond Trustee pursuant to Clause 3.3 (Bondholders’ rights), will be counted in the Written Resolution.

                

        

      

      
        
          	

                	(g)	
                  A Written Resolution is passed when the requisite majority set out in paragraph (e) or paragraph (f) of Clause 15.1 (Authority of Bondholders’ Meeting) has been achieved, based on the total number of Voting Bonds, even if the Voting Period has not yet

                

        

      

      
        55

        
          

      

      

      

      expired. A Written Resolution may also be resolved if the sufficient numbers of negative votes are
          received prior to the expiry of the Voting Period.

      
        
          	

                	(h)	
                  The effective date of a Written Resolution passed prior to the expiry of the Voting Period is the date when the resolution is approved by the last Bondholder that
                      results in the necessary voting majority being achieved.

                

        

      

      
        
          	

                	(i)	
                  If no resolution is passed prior to the expiry of the Voting Period, the number of votes shall be calculated at the close of business on the last day of the Voting
                      Period, and a decision will be made based on the quorum and majority requirements set out in paragraphs (d) to (f) of Clause 15.1(Authority of
                        Bondholders’ Meeting).

                

        

      

      
        
          	16.	
                  THE BOND TRUSTEE

                

        

      

      
        
          	16.1	
                  Power to represent the Bondholders

                

        

      

      
        
          	

                	(a)	
                  The Bond Trustee has power and authority to act on behalf of, and/or represent, the Bondholders in all matters, including but not limited to taking any legal or
                      other action, including enforcement of these Bond Terms, and the commencement of bankruptcy or other insolvency proceedings against the Issuer, or others.

                

        

      

      
        
          	

                	(b)	
                  The Issuer shall promptly upon request provide the Bond Trustee with any such documents, information and other assistance (in form and substance satisfactory to
                      the Bond Trustee), that the Bond Trustee deems necessary for the purpose of exercising its and the Bondholders’ rights and/or carrying out its duties under the Finance Documents.

                

        

      

      
        
          	16.2	
                  The duties and authority of the Bond Trustee

                

        

      

      
        
          	

                	(a)	
                  The Bond Trustee shall represent the Bondholders in accordance with the Finance Documents, including, inter alia, by following up on the delivery of any Compliance
                      Certificates and such other documents which the Issuer is obliged to disclose or deliver to the Bond Trustee pursuant to the Finance Documents and, when relevant, in relation to accelerating and enforcing the Bonds on behalf of the
                      Bondholders.

                

        

      

      
        
          	

                	(b)	
                  The Bond Trustee is not obligated to assess or monitor the financial condition of the Issuer or any other Obligor unless to the extent expressly set out in these
                      Bond Terms, or to take any steps to ascertain whether any Event of Default has occurred. Until it has actual knowledge to the contrary, the Bond Trustee is entitled to assume that no Event of Default has occurred. The Bond Trustee is
                      not responsible for the valid execution or enforceability of the Finance Documents, or for any discrepancy between the indicative terms and conditions described in any marketing material presented to the Bondholders prior to issuance
                      of the Bonds and the provisions of these Bond Terms.

                

        

      

      
        
          	

                	(c)	
                  The Bond Trustee is entitled to take such steps that it, in its sole discretion, considers necessary or advisable to protect the rights of the Bondholders in all
                      matters pursuant to the terms of the Finance Documents. The Bond Trustee may submit any instructions received by it from the Bondholders to a Bondholders' Meeting before the Bond Trustee takes any action pursuant to the instruction.

                

        

      

      
        56

        
          

      

      

      

      
        
          	

                	(d)	
                  The Bond Trustee is entitled to engage external experts when carrying out its duties under the Finance Documents.

                

        

      

      
        
          	

                	(e)	
                  The Bond Trustee shall hold all amounts recovered on behalf of the Bondholders on separated accounts.

                

        

      

      
        
          	

                	(f)	
                  The Bond Trustee will ensure that resolutions passed at the Bondholders' Meeting are properly implemented, provided, however, that the Bond Trustee may refuse to
                      implement resolutions that may be in conflict with these Bond Terms, any other Finance Document, or any applicable law.

                

        

      

      
        
          	

                	(g)	
                  Notwithstanding any other provision of the Finance Documents to the contrary, the Bond Trustee is not obliged to do or omit to do anything if it would or might in
                      its reasonable opinion constitute a breach of any law or regulation.

                

        

      

      
        
          	

                	(h)	
                  If the cost, loss or liability which the Bond Trustee may incur (including reasonable fees payable to the Bond Trustee itself) in:

                

        

      

      
        
          	

                	(i)	
                  complying with instructions of the Bondholders; or

                

        

      

      
        
          	

                	(ii)	
                  taking any action at its own initiative,

                

        

      

      will not, in the reasonable opinion of the Bond Trustee, be covered by the Issuer or the relevant
          Bondholders pursuant to paragraphs (e) and (g) of Clause 16.4 (Expenses, liability and indemnity), the Bond Trustee may refrain from acting in
          accordance with such instructions, or refrain from taking such action, until it has received such funding or indemnities (or adequate security has been provided therefore) as it may reasonably require.

      
        
          	

                	(i)	
                  The Bond Trustee shall give a notice to the Bondholders before it ceases to perform its obligations under the Finance Documents by reason of the non-payment by the
                      Issuer of any fee or indemnity due to the Bond Trustee under the Finance Documents.

                

        

      

      
        
          	

                	(j)	
                  The Bond Trustee may instruct the CSD to split the Bonds to a lower nominal amount in order to facilitate partial redemptions, restructuring of the Bonds or other
                      situations.

                

        

      

      
        
          	16.3	
                  Equality and conflicts of interest

                

        

      

      
        
          	

                	(a)	
                  The Bond Trustee shall not make decisions which will give certain Bondholders an unreasonable advantage at the expense of other Bondholders. The Bond Trustee
                      shall, when acting pursuant to the Finance Documents, act with regard only to the interests of the Bondholders and shall not be required to have regard to the interests or to act upon or comply with any direction or request of any
                      other person, other than as explicitly stated in the Finance Documents.

                

        

      

      
        
          	

                	(b)	
                  The Bond Trustee may act as agent, trustee, representative and/or security agent for several bond issues relating to the Issuer notwithstanding potential conflicts
                      of interest. The Bond Trustee is entitled to delegate its duties to other professional parties.

                

        

      

      
        57

        
          

      

      

      

      
        
          	16.4	
                  Expenses, liability and indemnity

                

        

      

      
        
          	

                	(a)	
                  The Bond Trustee will not be liable to the Bondholders for damage or loss caused by any action taken or omitted by it under or in connection with any Finance
                      Document, unless directly caused by its gross negligence or wilful misconduct. The Bond Trustee shall not be responsible for any indirect or consequential loss. Irrespective of the foregoing, the Bond Trustee shall have no liability
                      to the Bondholders for damage caused by the Bond Trustee acting in accordance with instructions given by the Bondholders in accordance with these Bond Terms.

                

        

      

      
        
          	

                	(b)	
                  Any liability for the Bond Trustee for damage or loss is limited to the amount of the Outstanding Bonds. The Bond Trustee is not liable for the content of
                      information provided to the Bondholders by or on behalf of the Issuer or any other person.

                

        

      

      
        
          	

                	(c)	
                  The Bond Trustee shall not be considered to have acted negligently in:

                

        

      

      
        
          	

                	(i)	
                  acting in accordance with advice from or opinions of reputable external experts; or

                

        

      

      
        
          	

                	(ii)	
                  taking, delaying or omitting any action if acting with reasonable care and provided the Bond Trustee considers that such action is in the interests of the
                      Bondholders.

                

        

      

      
        
          	

                	(d)	
                  The Issuer is liable for, and will indemnify the Bond Trustee fully in respect of, all losses, expenses and liabilities incurred by the Bond Trustee as a result of
                      negligence by the Issuer (including its directors, management, officers, employees and agents) in connection with the performance of the Bond Trustee’s obligations under the Finance Documents, including losses incurred by the Bond
                      Trustee as a result of the Bond Trustee's actions based on misrepresentations made by the Issuer in connection with the issuance of the Bonds, the entering into or performance under the Finance Documents, and for as long as any
                      amounts are outstanding under or pursuant to the Finance Documents.

                

        

      

      
        
          	

                	(e)	
                  The Issuer shall cover all costs and expenses incurred by the Bond Trustee in connection with it fulfilling its obligations under the Finance Documents. The Bond
                      Trustee is entitled to fees for its work and to be indemnified for costs, losses and liabilities on the terms set out in the Finance Documents. The Bond Trustee's obligations under the Finance Documents are conditioned upon the due
                      payment of such fees and indemnifications. The fees of the Bond Trustee will be further set out in the Bond Trustee Fee Agreement.

                

        

      

      
        
          	

                	(f)	
                  The Issuer shall on demand by the Bond Trustee pay all costs incurred for external experts engaged after the occurrence of an Event of Default, or for the purpose
                      of investigating or considering (i) an event or circumstance which the Bond Trustee reasonably believes is or may lead to an Event of Default or (ii) a matter relating to the Issuer or any of the Finance Documents which the Bond
                      Trustee reasonably believes may constitute or lead to a breach of any of the Finance Documents or otherwise be detrimental to the interests of the Bondholders under the Finance Documents.

                

        

      

      
        58

        
          

      

      

      

      
        
          	

                	(g)	
                  Fees, costs and expenses payable to the Bond Trustee which are not reimbursed in any other way due to an Event of Default, the Issuer being Insolvent or similar
                      circumstances pertaining to any Obligors, may be covered by making an equal reduction in the proceeds to the Bondholders hereunder of any costs and expenses incurred by the Bond Trustee (or the Security Agent) in connection therewith.
                      The Bond Trustee may withhold funds from any escrow account (or similar arrangement) or from other funds received from the Issuer or any other person, irrespective of such funds being subject to Transaction Security, and to set-off
                      and cover any such costs and expenses from those funds.

                

        

      

      
        
          	

                	(h)	
                  As a condition to effecting any instruction from the Bondholders (including, but not limited to, instructions set out in Clause 14.3 (Bondholders’ instructions) or Clause 15.2 (Procedure for arranging a
                        Bondholders’ Meeting)), the Bond Trustee may require satisfactory Security, guarantees and/or indemnities for any possible liability and anticipated costs and expenses from those Bondholders who have given that instruction
                      and/or who voted in favour of the decision to instruct the Bond Trustee.

                

        

      

      
        
          	16.5	
                  Replacement of the Bond Trustee

                

        

      

      
        
          	

                	(a)	
                  The Bond Trustee may be replaced according to the procedures set out in Clause 15 (Bondholders’ Decisions), and the Bondholders may resolve to replace the Bond Trustee without the Issuer’s approval.

                

        

      

      
        
          	

                	(b)	
                  The Bond Trustee may resign by giving notice to the Issuer and the Bondholders, in which case a successor Bond Trustee shall be elected pursuant to this Clause
                      16.5 (Replacement of the Bond Trustee), initiated by the retiring Bond Trustee.

                

        

      

      
        
          	

                	(c)	
                  If the Bond Trustee is Insolvent, or otherwise is permanently unable to fulfil its obligations under these Bond Terms, the Bond Trustee shall be deemed to have
                      resigned and a successor Bond Trustee shall be appointed in accordance with this Clause 16.5 (Replacement of the Bond Trustee).The Issuer
                      may appoint a temporary Bond Trustee until a new Bond Trustee is elected in accordance with paragraph (a) above.

                

        

      

      
        
          	

                	(d)	
                  The change of Bond Trustee's shall only take effect upon execution of all necessary actions to effectively substitute the retiring Bond Trustee, and the retiring
                      Bond Trustee undertakes to co-operate in all reasonable manners without delay to such effect. The retiring Bond Trustee shall be discharged from any further obligation in respect of the Finance Documents from the change takes effect,
                      but shall remain liable under the Finance Documents in respect of any action which it took or failed to take whilst acting as Bond Trustee. The retiring Bond Trustee remains entitled to any benefits and any unpaid fees or expenses
                      under the Finance Documents before the change has taken place.

                

        

      

      
        
          	

                	(e)	
                  Upon change of Bond Trustee the Issuer shall co-operate in all reasonable manners without delay to replace the retiring Bond Trustee with the successor Bond
                      Trustee and release the retiring Bond Trustee from any future obligations under the Finance Documents and any other documents.

                

        

      

      
        59

        
          

      

      

      

      
        
          	17.	
                  AMENDMENTS AND WAIVERS

                

        

      

      
        
          	17.1	
                  Procedure for amendments and waivers

                

        

      

      
        
          	

                	(a)	
                  The Issuer and the Bond Trustee (acting on behalf of the Bondholders) may agree to amend the Finance Documents or waive a past default or anticipated failure to
                      comply with any provision in a Finance Document, provided that:

                

        

      

      
        
          	

                	(i)	
                  such amendment or waiver is not detrimental to the rights and benefits of the Bondholders in any material respect, or is made solely for the purpose of rectifying
                      obvious errors and mistakes; or

                

        

      

      
        
          	

                	(ii)	
                  such amendment or waiver is required by applicable law, a court ruling or a decision by a relevant authority; or

                

        

      

      
        
          	

                	(iii)	
                  such amendment or waiver has been duly approved by the Bondholders in accordance with Clause 15 (Bondholders’ Decisions).

                

        

      

      
        
          	

                	(b)	
                  Any changes to these Bond Terms necessary or appropriate in connection with the appointment of a Security Agent other than the Bond Trustee shall be documented in
                      an amendment to these Bond Terms, signed by the Bond Trustee (in its discretion). If so desired by the Bond Trustee, any or all of the Transaction Security Documents shall be amended, assigned or re-issued, so that the Security Agent
                      is the holder of the relevant Security (on behalf of the Bondholders). The costs incurred in connection with such amendment, assignment or re-issue shall be for the account of the Issuer.

                

        

      

      
        
          	17.2	
                  Authority with respect to documentation

                

        

      

      If the Bondholders have resolved the substance of an amendment to any Finance Document, without resolving
          on the specific or final form of such amendment, the Bond Trustee shall be considered authorised to draft, approve and/or finalise (as applicable) any required documentation or any outstanding matters in such documentation without any further
          approvals or involvement from the Bondholders being required.

      
        
          	17.3	
                  Notification of amendments or waivers

                

        

      

      The Bond Trustee shall as soon as possible notify the Bondholders of any amendments or waivers made in
          accordance with this Clause 17 (Amendments and waivers), setting out the date from which the amendment or waiver will be effective, unless such
          notice obviously is unnecessary. The Issuer shall ensure that any amendment to these Bond Terms is duly registered with the CSD.

      
        
          	18.	
                  MISCELLANEOUS

                

        

      

      
        
          	18.1	
                  Limitation of claims

                

        

      

      All claims under the Finance Documents for payment, including interest and principal, will be subject to
          the legislation regarding time-bar provisions of the Relevant Jurisdiction.

      
        
          	18.2	
                  Access to information

                

        

      

      
        
          	

                	(a)	
                  These Bond Terms will be made available to the public and copies may be obtained from the Bond Trustee or the Issuer. The Bond Trustee will not have any obligation
                      to distribute any other information to the Bondholders or any other person, and the

                

        

      

      
        60

        
          

      

      

      

      Bondholders have no right to obtain information from the Bond Trustee, other than as explicitly stated in
          these Bond Terms or pursuant to statutory provisions of law.

      
        
          	

                	(b)	
                  In order to carry out its functions and obligations under these Bond Terms, the Bond Trustee will have access to the relevant information regarding ownership of
                      the Bonds, as recorded and regulated with the CSD.

                

        

      

      
        
          	

                	(c)	
                  The information referred to in paragraph (b) above may only be used for the purposes of carrying out their duties and exercising their rights in accordance with
                      the Finance Documents and shall not disclose such information to any Bondholder or third party unless necessary for such purposes.

                

        

      

      
        
          	18.3	
                  Notices, contact information

                

        

      

      Written notices to the Bondholders made by the Bond Trustee will be sent to the Bondholders via the CSD
          with a copy to the Issuer and the Exchange (if the Bonds are listed). Any such notice or communication will be deemed to be given or made via the CSD, when sent from the CSD.

      
        
          	

                	(a)	
                  The Issuer’s written notifications to the Bondholders will be sent to the Bondholders via the Bond Trustee or through the CSD with a copy to the Bond Trustee and
                      the Exchange (if the Bonds are listed).

                

        

      

      
        
          	

                	(b)	
                  Unless otherwise specifically provided, all notices or other communications under or in connection with these Bond Terms between the Bond Trustee and the Issuer
                      will be given or made in writing, by letter, e-mail or fax. Any such notice or communication will be deemed to be given or made as follows:

                

        

      

      
        
          	

                	(i)	
                  if by letter, when delivered at the address of the relevant party;

                

        

      

      
        
          	

                	(ii)	
                  if by e-mail, when received; and

                

        

      

      
        
          	

                	(iii)	
                  if by fax, when received.

                

        

      

      
        
          	

                	(c)	
                  The Issuer and the Bond Trustee shall each ensure that the other party is kept informed of changes in postal address, e-mail address, telephone and fax numbers and
                      contact persons.

                

        

      

      
        
          	

                	(d)	
                  When determining deadlines set out in these Bond Terms, the following will apply (unless otherwise stated):

                

        

      

      
        
          	

                	(i)	
                  if the deadline is set out in days, the first day of the relevant period will not be included and the last day of the relevant period will be included;

                

        

      

      
        
          	

                	(ii)	
                  if the deadline is set out in weeks, months or years, the deadline will end on the day in the last week or the last month which, according to its name or number,
                      corresponds to the first day the deadline is in force. If such day is not a part of an actual month, the deadline will be the last day of such month; and

                

        

      

      
        61

        
          

      

      

      

      
        
          	

                	(iii)	
                  if a deadline ends on a day which is not a Business Day, the deadline is postponed to the next Business Day.

                

        

      

      
        
          	18.4	
                  Defeasance

                

        

      

      
        
          	

                	(a)	
                  Subject to paragraph (b) below and provided that:

                

        

      

      
        
          	

                	(i)	
                  an amount sufficient for the payment of principal and interest on the Outstanding Bonds to the Maturity Date (including, to the extent applicable, any premium
                      payable upon exercise of the Call Option), and always subject to paragraph (c) below (the “Defeasance Amount”) is credited by the Issuer
                      to an account in a financial institution acceptable to the Bond Trustee (the “Defeasance Account”);

                

        

      

      
        
          	

                	(ii)	
                  the Defeasance Account is irrevocably pledged and blocked in favour of the Bond Trustee on such terms as the Bond Trustee shall request (the “Defeasance Pledge”); and

                

        

      

      
        
          	

                	(iii)	
                  the Bond Trustee has received such legal opinions and statements reasonably required by it, including (but not necessarily limited to) with respect to the validity
                      and enforceability of the Defeasance Pledge, then the Issuer will be relieved from its obligations under Clause 12.2 (Requirements as to
                        Financial Reports) paragraph (a), Clause 12.3 (Put Option Event), Clause 12.4 (Information: Miscellaneous) and Clause 13 (General and financial undertakings);

                

        

      

      
        
          	

                	(b)	
                  The Bond Trustee shall be authorised to apply any amount credited to the Defeasance Account towards any amount payable by the Issuer under any Finance Document on
                      the due date for the relevant payment until all obligations of the Issuer and all amounts outstanding under the Finance Documents are repaid and discharged in full.

                

        

      

      
        
          	

                	(c)	
                  The Bond Trustee may, if the Defeasance Amount cannot be finally and conclusively determined, decide the amount to be deposited to the Defeasance Account in its
                      discretion, applying such buffer amount as it deems required.

                

        

      

      A defeasance established according to this Clause 18.4 may not be reversed.

      
        
          	19.	
                  GOVERNING LAW AND JURISDICTION

                

        

      

      
        
          	19.1	
                  Governing law

                

        

      

      These Bond Terms are governed by the laws of the Relevant Jurisdiction, without regard to its conflict of
          law provisions.

      
        
          	19.2	
                  Main jurisdiction

                

        

      

      The Bond Trustee and the Issuer agree for the benefit of the Bond Trustee and the Bondholders that Oslo
          District Court (No.: Oslo tingrett) shall have jurisdiction with respect to any dispute arising out of or in connection with these Bond Terms. The
          Issuer agrees for the benefit of the Bond Trustee and the Bondholders that any legal action or proceedings arising out of or in connection with these Bond Terms against the Issuer or any of its assets may be brought in such court.

      
        62

        
          

      

      

      

      
        
          	19.3	
                  Alternative jurisdiction

                

        

      

      Clause 19 (Governing

            law and jurisdiction) is for the exclusive benefit of the Bond Trustee and the Bondholders and the Bond Trustee have the right:

      
        
          	

                	(a)	
                  to commence proceedings against the Issuer or any of its assets in any court in any jurisdiction; and

                

        

      

      
        
          	

                	(b)	
                  to commence such proceedings, including enforcement proceedings, in any competent jurisdiction concurrently.

                

        

      

      
        
          	19.4	
                  Service of process

                

        

      

      
        
          	

                	(a)	
                  Without prejudice to any other mode of service allowed under any relevant law, the Issuer:

                

        

      

      
        
          	

                	(i)	
                  irrevocably appoints Advokatfirmaet Wiersholm AS as its agent for service of process in relation to any proceedings in connection with these Bond Terms; and

                

        

      

      
        
          	

                	(ii)	
                  agrees that failure by an agent for service of process to notify the Issuer of the process will not invalidate the proceedings concerned.

                

        

      

      
        
          	

                	(b)	
                  If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process, the Issuer must immediately (and in any
                      event within ten (10) Business Days of such event taking place) appoint another agent on terms acceptable to the Bond Trustee. Failing this, the Bond Trustee may appoint another agent for this purpose.

                

        

      

      

      

      -----000-----

      
        63

        
          

      

      
      
        These Bond Terms have been executed in two originals, of which the Issuer and the Bond Trustee shall
            retain one each.

        

        

        SIGNATURES:

        

        

        	
                The Issuer:

                 
                DIANA SHIPPING INC.

                 
                 

                /s/ Andreas Nikolaos Michalopoulos  /s/ Ioannis Zafirakis

                 
                ............................................................................

                 
                By:  Andreas Nikolaos Michalopoulos 

                  

                        and Ioannis Zafirakis

                  

                 
                Position:  Director, Chief Financial Officer & Treasurer

                  

                                and Director, Chief Strategy Officer & Secretary

                  

              	
                As Bond Trustee :

                NORDIC TRUSTEE AS

                 

                .................................................

                By:

                Position:

              

      

       

        

       

    
      64

      
        

    

    

      
       

        

      These Bond Terms have been executed in two originals, of which the Issuer and the Bond Trustee shall
          retain one each.

      

      

      SIGNATURES:

      

      

      	
              The Issuer:

              DIANA SHIPPING INC.

               

              .................................................

              By:

              Position:

            	
              As Bond Trustee :

              NORDIC TRUSTEE AS

               

               /s/ Joegen Andersen

              .................................................

              By:  Joegen Andersen

                

              Position:

            

      
        65

        
          

      

      

      

      

      

      SCHEDULE 1

          COMPLIANCE CERTIFICATE

      

      

      [date]

      Diana Shipping Inc. 9.50% bonds 2018/2023 ISIN NO0010832868[

      

      

      We refer to the Bond Terms for the above captioned Bonds made between Nordic Trustee AS as Bond Trustee on behalf of the
          Bondholders and the undersigned as Issuer. Pursuant to Clause 12.2 (Requirements as to Financial Reports) of the Bond Terms a Compliance Certificate
          shall be issued in connection with each delivery of Financial Statements to the Bond Trustee.

      This letter constitutes the Compliance Certificate for the period [●].

      Capitalised terms used herein will have the same meaning as in the Bond Terms.

      With reference to Clause 12.2 (Requirements

            as to Financial Reports) we hereby certify that all information delivered under cover of this Compliance Certificate is true and accurate and there has been no material adverse change to the financial condition of the Issuer since the
          date of the last accounts or the last Compliance Certificate submitted to you. Copies of our latest consolidated [Financial Statements] / [Interim Accounts] are enclosed.

      [The Financial Covenants set out in Clause 13.16 (Financial Covenants) are met, please see the calculations and figures in respect of the ratios attached hereto.]

      We confirm that, to the best of our knowledge, no Event of Default has occurred or is likely to occur.

      

      

      Yours faithfully,

      NX

      ___________________

      Name of authorised person

      Enclosure: Financial Statements; [and

                       any other written documentation]

      

      

    

  

  66Exhibit 4.36

    

    

    

    

    

    

    Registration Document

    Diana Shipping Inc.

    

    

    

    

    

    

    
      

      

      
        Registration number 13671

          (Marshall Islands)

        Listing on Oslo Stock Exchange

        

          Arrangers:

           

          

           

          

          

          

          

          

          
          

          

          

          

          

          

          
            This Registration Document does not constitute an offer to buy, subscribe or sell the securities described herein.

            

            

            This Registration Document combined with the relevant Securities Note and Summary serves as a listing Prospectus
                as required by applicable laws and no securities are being offered or sold pursuant to this Prospectus.

             

              

            
              
                

            

            

              

              

              IMPORTANT NOTICE

              This Registration Document (the “Registration Document”) has been
                  prepared by Diana Shipping Inc. (“Diana”, “the Company” or the “Issuer”) for use in connection with the listing of Company’s bonds on the Oslo Stock Exchange (the “Listing”).

              The Registration Document combined with the relevant Securities Note and
                  Summary constitutes a Prospectus (the “Prospectus”).

              This Registration Document has been prepared to comply with chapter 7 of
                  the Norwegian Securities Trading Act of 29 June 2007 No. 75 (Nw: Verdipapirhandelloven) (“Norwegian Securities Trading Act”) and
                  related secondary legislation including the Prospectus Directive (EC Commission Regulation EC/809/2004). The Financial Supervisory Authority of Norway (Nw: Finanstilsynet) (“NFSA”) has reviewed and approved this Registration Document in accordance with Section 7-7 and 7-8 of the Norwegian Securities Trading Act. The Prospectus is valid 12 months from the
                  Financial Supervisory Authority’s approval. The Norwegian FSA has not verified or approved the accuracy or completeness of the information provided in this Prospectus. The NFSAs control and approval solely relates to the issuers
                  descriptions according to a pre-defined list of requirements. The NFSA has not undertaken any form of control or approval of corporate matters described in, or in any way included in the prospectus. The Registration Document has been
                  prepared in the English language only.

              The information contained herein is as of the date of this Registration
                  Document and subject to change, completion or amendment without notice. In accordance with Section 7-15 of the Norwegian Securities Trading Act, any new factor, significant error or inaccuracy that might have an effect on the assessment
                  of the Bond Issue contemplated hereby and emerges between the time of approval of the Registration Document and the Listing, will be included in a supplement to the Registration Document. Neither the approval nor distribution or use of
                  this Registration Document shall under any circumstances create any implication that the information herein is correct as of any date subsequent to the date of the Registration Document.

              All inquiries relating to this Registration Document should be directed
                  to the Company. No other person has been authorized to give any information about, or make any representation on behalf of, the Company in connection with the Listing and, if given or made, such other information or representation must
                  not be relied upon as having been authorized by the Company.

              Unless otherwise indicated, the source of the information in this
                  Registration Document is the Company. The contents of this Registration Document are not to be construed as legal, business or tax advice. Each reader of the Registration Document should consult with its own professional advisors for
                  legal, business and tax advice. If you are in any doubt about the contents of this Registration Document, you should consult your stockbroker, bank manager, lawyer, accountant or other professional advisor.

              An investment in bonds involves inherent risks. Prospective investors in
                  Bonds issued by the Company should carefully consider the risks associated with the investment when reading the information contained in this Registration Document, and be aware of the risk of losing such investment in its entirety,
                  before deciding to invest. A summary of risk factors are set out in Section 1 “Risk Factors”. However, prospective investors should read the entire Registration Document before making any investment decision.

              

              

              Offering restrictions

              The distribution of this Registration Document may in certain
                  jurisdictions be restricted by law (including, but not limited to, the United States, Canada, Australia, Japan and South Africa). Persons in possession of this Registration Document are required to inform themselves about and to observe
                  any such restrictions. This Registration Document does not constitute an offer of, or an invitation to subscribe or purchase, any bonds or other securities.

              The securities described in this Registration Document have not been and
                  will not be registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) and may not be offered or sold absent registration or an applicable exemption from registration under the U.S. Securities Act.

              Furthermore, the bonds may not be offered or sold in or into Canada,
                  Japan, the Republic of South Africa or Australia.

              In relation to the United Kingdom, this Registration Document is only
                  directed at, and may only be distributed to, persons who fall within the scope of Article 19 (Investment Professionals) and 49 (High Net Worth Companies, Unincorporated Associations etc.) of the Financial Services and Markets Act 2000
                  (Financial Promotion) Order 2001 (as amended) or who are persons to whom the document may otherwise be lawfully distributed. This Registration Document may only be distributed in circumstances which do not result in an offer to the public
                  in the United Kingdom within the meaning of Public Offers of Securities Regulations 1995 (as amended). The distribution

              
                
                  

              

              

              

              

              

              (which term shall include any form of communication) of this Registration
                  Document may be restricted pursuant to Section 21 (Restrictions on Financial Promotion) of the Financial Services and Markets Act 2000 (as amended).

              Except for the approval by NFSA as described above, no action has been
                  taken or will be taken in any jurisdiction by the Company or the Manager that would permit a public offering of Bonds issued by the Company, or the possession or distribution of any documents relating to the Listing, or any amendment or
                  supplement thereto, hereunder but not limited to this Registration Document, in any country or jurisdiction where specific action for that purpose is required. Any person receiving this Registration Document is required by the Company and
                  the Manager to inform themselves about and to observe such restrictions.

              The restrictions and limitations listed and described herein are not
                  exhaustive, and other restrictions and limitations that are not known or identified by the Company or the Manager at the date of this Registration Document may apply in various jurisdictions as they relate to the Listing and the
                  Registration Document.

              This Registration Document is subject to Norwegian law, unless otherwise
                  indicated herein. Any dispute arising in respect of this Listing or this Registration Document is subject to the exclusive jurisdiction of the Norwegian courts, with Bergen District Court as exclusive venue.

            

          

          
            

            

            

            

            

            

            
              
                

            

            

            

            

            

            TABLE OF CONTENTS

            

            

            

            

            

            
              	
                      1

                    	
                      RISK FACTORS

                    	
                      4

                    
	
                      2

                    	
                      RESPONSIBILITY STATEMENT

                    	
                      7

                    
	
                      3

                    	
                      THIRD PARTY INFORMATION

                    	
                      8

                    
	
                      4

                    	
                      PRESENTATION OF THE GROUP

                    	
                      9

                    
	
                      5

                    	
                      BOARD OF DIRECTORS AND SENIOR MANAGEMENT

                    	
                      23

                    
	
                      6

                    	
                      FINANCIAL INFORMATION

                    	
                      28

                    
	
                      7

                    	
                      LEAD MANAGERS’ DISCLAIMER

                    	
                      40

                    
	
                      8

                    	
                      DEFINITIONS AND GLOSSARY

                    	
                      41

                    
	
                      APPENDIX A – ARTICLES OF INCORPORATION

                    	
                      42

                    
	
                      APPENDIX B – FINANCIAL STATEMENTS

                    	
                      51

                    

            

            

            

            

            

            

              

              

              

              

              

            

            
              
                

            

            

            

            

            

            
              

              

              1 RISK FACTORS

              Prior to any decision to invest in the Bonds, potential investors should carefully
                read and assess the following specific risks and the other information contained in this presentation. An investment in the bonds is suitable only for investors who understand the risk factors associated with this type of investment and who
                can afford a loss of all or part of their investment.

              If any of the risks presented below materializes, individually or
                  together with other circumstances, the business, financial position and operating results of the Issuer and the Group could be materially and adversely affected, and the price of the Bonds may decline, causing investors to lose all or
                  part of their invested capital.

              The primary risk factors in connection with an investment in the bonds
                  are described below. The description below is not exhaustive and the sequence of the risk factors is not set out according to importance. A prospective investor should carefully consider the factors set out below and elsewhere in this
                  Presentation, including but not limited to the cost structure for both the Issuer and the investors, as well as the investors' current and future tax position.

              The below described risk factors are supplemented by the risks
                  described under the heading “Risk Factors” in our Annual Report on Form 20-F for the year ended December 31, 2017 that summarize the risks that may materially affect the Issuer's business.

              Industry Specific Risk Factors

              
                
                  	·	
                          Charter hire rates for dry bulk carriers may remain at low levels or decrease in the future, which may adversely affect our earnings.

                        

                

              

              
                
                  	·	
                          The dry bulk carrier charter market remains significantly below its high in 2008, which has had and may continue to have an adverse effect on our
                              revenues, earnings and profitability, and may affect our ability to comply with our loan covenants.

                        

                

              

              
                
                  	·	
                          If economic conditions throughout the world decline, in particular in the EU, in China and the rest of the Asia-Pacific region, it could negatively
                              affect our earnings, financial condition and cash flows and may further adversely affect the market price of our common shares.

                        

                

              

              
                
                  	·	
                          A decrease in the level of China’s export of goods or an increase in trade protectionism could have a material adverse impact on our charterers’
                              business and, in turn, could cause a material adverse impact on our earnings, financial condition and cash flows.

                        

                

              

              
                
                  	·	
                          A decline in the state of global financial markets and economic conditions may adversely impact our ability to obtain additional financing or
                              refinance our existing loan and credit facilities on acceptable terms which may hinder or prevent us from expanding our business.

                        

                

              

              
                
                  	·	
                          An over-supply of dry bulk carrier capacity may prolong or further depress the current low charter rates and, in turn, adversely affect our
                              profitability.

                        

                

              

              
                
                  	·	
                          Risks associated with operating ocean-going vessels could affect our business and reputation, which could adversely affect our revenues and stock
                              price.

                        

                

              

              
                
                  	·	
                          World events could affect our earnings and financial condition.

                        

                

              

              
                
                  	·	
                          Acts of piracy on ocean-going vessels could adversely affect our business.

                        

                

              

              
                
                  	·	
                          Our operating results are subject to seasonal fluctuations, which could affect our operating results.

                        

                

              

              
                
                  	·	
                          An increase in the price of fuel, or bunkers, may adversely affect profits.

                        

                

              

              
                
                  	·	
                          We are subject to complex laws and regulations, including environmental regulations that can adversely affect the cost, manner or feasibility of
                              doing business.

                        

                

              

              
                
                  	·	
                          Increased inspection procedures, tighter import and export controls and new security regulations could increase costs and disrupt our business.

                        

                

              

              
                
                  

              

              

              

              

              

              
                
                  	·	
                          The operation of dry bulk carriers has certain unique operational risks which could affect our earnings and cash flow.

                        

                

              

              
                
                  	·	
                          Our vessels may call on ports located in countries that are subject to sanctions and embargoes imposed by the U.S. or other governments, which could
                              adversely affect our reputation and the market for our common stock.

                        

                

              

              
                
                  	·	
                          Maritime claimants could arrest or attach one or more of our vessels, which could interrupt our cash flows.

                        

                

              

              
                
                  	·	
                          We conduct business in China, where the legal system is not fully developed and has inherent uncertainties that could limit the legal protections
                              available to us.

                        

                

              

              
                
                  	·	
                          Governments could requisition our vessels during a period of war or emergency, resulting in a loss of earnings.

                        

                

              

              
                
                  	·	
                          Failure to comply with the U.S. Foreign Corrupt Practices Act could result in fines, criminal penalties and an adverse effect on our business.

                        

                

              

              
                
                  	·	
                          Changing laws and evolving reporting requirements could have an adverse effect on our business.

                        

                

              

              Company Specific Risk Factors

              
                
                  	·	
                          The market values of our vessels have declined in recent years and may further decline, which could limit the amount of funds that we can borrow and
                              could trigger breaches of certain financial covenants contained in our loan facilities, which could adversely affect our operating results, and we may incur a loss if we sell vessels following a decline in their market values.

                        

                

              

              
                
                  	·	
                          We charter some of our vessels on short-term time charters in a volatile shipping industry and a decline in charter hire rates could affect our
                              results of operations and our ability to pay dividends.

                        

                

              

              
                
                  	·	
                          Rising crew costs could adversely affect our results of operations.

                        

                

              

              
                
                  	·	
                          Our involvement with Diana Containerships Inc. may expose us to risks which may adversely affect our financial condition.

                        

                

              

              
                
                  	·	
                          Our investment in Diana Wilhelmsen Management Limited may expose us to additional risks.

                        

                

              

              
                
                  	·	
                          The effects of the recent Greek crisis could adversely affect the operations of our fleet manager, which has offices in Greece.

                        

                

              

              
                
                  	·	
                          A cyber-attack could materially disrupt our business.

                        

                

              

              
                
                  	·	
                          The Public Company Accounting Oversight Board inspection of our independent accounting firm, could lead to findings in our auditors’ reports and
                              challenge the accuracy of our published audited consolidated financial statements.

                        

                

              

              
                
                  	·	
                          Our earnings may be adversely affected if we are not able to take advantage of favorable charter rates.

                        

                

              

              
                
                  	·	
                          Investment in derivative instruments such as forward freight agreements could result in losses.

                        

                

              

              
                
                  	·	
                          We may have difficulty effectively managing any further growth, which may adversely affect our earnings.

                        

                

              

              
                
                  	·	
                          We cannot assure you that we will be able to borrow amounts under our loan facilities and restrictive covenants in our loan facilities impose
                              financial and other restrictions on us.

                        

                

              

              
                
                  	·	
                          We cannot assure you that we will be able to refinance indebtedness incurred under our loan facilities.

                        

                

              

              
                
                  	·	
                          Purchasing and operating secondhand vessels may result in increased operating costs and reduced operating days, which may adversely affect our
                              earnings.

                        

                

              

              
                
                  	·	
                          We are subject to certain risks with respect to our counterparties on contracts, and failure of such counterparties to meet their obligations could
                              cause us to suffer losses or otherwise adversely affect our business.

                        

                

              

              
                
                  	·	
                          In the highly competitive international shipping industry, we may not be able to compete for charters with new entrants or established companies
                              with greater resources, and as a result, we may be unable to employ our vessels profitably.

                        

                

              

              
                
                  

              

              

              

              

              

              
                
                  	·	
                          We may be unable to attract and retain key management personnel and other employees in the shipping industry, which may negatively impact the
                              effectiveness of our management and results of operations.

                        

                

              

              
                
                  	·	
                          The fiduciary duties of our officers and directors may conflict with those of the officers and director of Diana Containerships.

                        

                

              

              
                
                  	·	
                          We may not have adequate insurance to compensate us if we lose our vessels or to compensate third parties.

                        

                

              

              
                
                  	·	
                          Our vessels may suffer damage and we may face unexpected drydocking costs, which could adversely affect our cash flow and financial condition.

                        

                

              

              
                
                  	·	
                          The aging of our fleet may result in increased operating costs in the future, which could adversely affect our earnings.

                        

                

              

              
                
                  	·	
                          We are exposed to U.S. dollar and foreign currency fluctuations and devaluations that could harm our reported revenue and results of operations.

                        

                

              

              
                
                  	·	
                          Volatility in the London Interbank Offered Rate, could affect our profitability, earnings and cash flow.

                        

                

              

              
                
                  	·	
                          We depend upon a few significant customers for a large part of our revenues and the loss of one or more of these customers could adversely affect
                              our financial performance.

                        

                

              

              
                
                  	·	
                          We are a holding company, and we depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial obligations.

                        

                

              

              
                
                  	·	
                          Because we are organized under the laws of the Marshall Islands, it may be difficult to serve us with legal process or enforce judgments against us,
                              our directors or our management.

                        

                

              

              
                
                  	·	
                          The international nature of our operations may make the outcome of any bankruptcy proceedings difficult to predict.

                        

                

              

              
                
                  	·	
                          If we expand our business further, we may need to improve our operating and financial systems and will need to recruit suitable employees and crew
                              for our vessels.

                        

                

              

              
                
                  	·	
                          We may have to pay tax on U.S. source income, which would reduce our earnings.

                        

                

              

              
                
                  	·	
                          U.S. federal tax authorities could treat us as a “passive foreign investment company”, which could have adverse U.S. federal income tax consequences
                              to U.S. shareholders.

                        

                

              

              
                
                  

              

              

              

              
                
                  	2	
                          RESPONSIBILITY STATEMENT

                        

                

              

              

              

              

              

              

              

              

              

              

              

              

              

              

              

              

              
                
                  

              

              

              

              
                
                  	3	
                          THIRD PARTY INFORMATION

                        

                

              

              If not otherwise indicated, Diana Shipping Inc. is the source of information in this
                  Prospectus. Information which has been sourced from a third party has been accurately reproduced. As far as the Issuer is aware and able to ascertain from information published by such third parties, no facts have been omitted which would
                  render the reproduced information inaccurate or misleading.

              

              

              
                
                  

              

              

              

              
                
                  	4	
                          PRESENTATION OF THE GROUP

                        

                

              

              
                
                  	4.1	
                          Overview

                        

                

              

              Diana Shipping Inc. is a holding company incorporated under the laws of Liberia in March 1999
                  as Diana Shipping Investments Corp (registration number: 13671). In February 2005, the Company's articles of incorporation were amended. Under the amended and restated articles of incorporation, the Company was renamed Diana Shipping Inc.
                  and was re-domiciled from the Republic of Liberia to the Republic of the Marshall Islands. Please refer to appendix A for the full Articles of Incorporation. Our executive offices are located at Pendelis 16, 175 64 Palaio Faliro, Athens,
                  Greece. Our telephone number at this address is +30-210-947-0100. Our agent and authorized representative in the United States is our wholly-owned subsidiary, Bulk Carriers (USA) LLC, established in September 2006, in the State of
                  Delaware, which is located at 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808.

              Our purpose, as stated in our amended and restated articles of incorporation, is to engage in
                  any lawful act or activity for which corporations may now or hereafter be organized under the Business Corporations Act of the Marshall Islands, or the BCA.

              The objectives for which the Company is formed and incorporated are listed in the Company’s
                  Articles of Incorporation, which can be found in Appendix A.

              4.2 Business objectives and strategy

              Diana Shipping Inc. is a global provider of shipping transportation services through its
                  ownership of dry bulk vessels. As of  November 26, 2018 our fleet consists of 48 dry bulk vessels (4 Newcastlemax, 14 Capesize, 5 Post-Panamax, 5 Kamsarmax and 20 Panamax), as well as two Panamax dry bulk vessels, the ''Triton'' and
                  ''Alcyon'', that have been sold and expected to be delivered to their new owners at the latest by January 7, 2019. As of the same date, the combined carrying capacity of our fleet, including the m/v Triton and m/v Alcyon, is approximately
                  5.8 million dwt with a weighted average age of 9.26 years.

              We wholly own the subsidiaries which own the vessels that comprise our fleet. Our vessels
                  are employed primarily on medium to long-term time charters and transport a range of dry bulk cargoes, including such commodities as iron ore, coal, grain and other materials along worldwide shipping routes.

              The commercial and technical management of our fleet, as well as the provision of
                  administrative services relating to our fleet's operations, are carried out by Diana Shipping Services S.A., our wholly-owned subsidiary, and Diana Wilhelmsen Management Limited, a 50/50 joint venture with Wilhelmsen Ship Management.

              

              

              We focus on the ownership of dry bulk carriers with a capacity of 70,000 dwt and above. However, we will also consider purchasing
                  other classes of dry bulk vessels, if we determine that those vessels would, in our view, present favorable investment opportunities. The size of our fleet may change through acquisitions or sales of vessels, however the company has not
                  engaged in any new significant activities.

              Competitive position

              Among the distinguishing strengths that we believe provide us with a competitive advantage
                  in the dry bulk shipping industry are the following:

              
                
                  	·	
                          We own a modern, high quality fleet of dry bulk carriers.

                        

                

              

              
                
                  	·	
                          Our fleet includes groups of sister ships, providing operational and scheduling flexibility, as well as cost efficiencies.

                        

                

              

              
                
                  	·	
                          We have an experienced management team.

                        

                

              

              
                
                  	·	
                          We benefit from the experience and reputation of Diana Shipping Services S.A. and the relationship with Wilhelmsen Ship Management through the Diana
                              Wilhelmsen Management Limited joint venture.

                        

                

              

              
                
                  	·	
                          We benefit from strong relationships with members of the shipping and financial industries.

                        

                

              

              
                
                  	·	
                          We have a strong balance sheet and a low level of indebtedness.

                        

                

              

              

              

              During 2017, 2016 and 2015, we had a fleet utilization of 98.2%, 99.4% and 99.3%, respectively, our vessels achieved daily time
                  charter equivalent rates of $8,568, $6,106 and $9,739, respectively, and we generated revenues of $161.9 million, $114.3 million and $157.7 million, respectively.

              
                
                  

              

              

              

              

              

              

              

              

              

              

              

              

              

              

              

              

              

              The following table presents certain information concerning the dry bulk carriers in our fleet as of November 23, 2018:

              

              

              	 	
                      Vessel

                    	
                      Sister Ships*

                    	
                      Gross Rate (USD Per Day)

                    	
                      Com**

                    	
                      Charterers

                    	
                      Delivery Date to Charterers***

                    	
                      Redelivery Date to Owners****

                    	
                      Notes

                    	 
	 	
                      BUILT    DWT

                    	 
	 	
                      22 Panamax Bulk Carriers

                    	 
	
                      1 

                    	
                      DANAE

                    	
                      A

                    	
                      $10,000

                    	
                      5.00%

                    	
                      Phaethon International Company AG

                    	
                      22-Dec-17

                    	
                      22-Jan-19 - 7-May-19

                    	 	 
	 	
                      2001    75,106

                    	 	 	 	 	 	 	 
	
                      2 

                    	
                      DIONE

                    	
                      A

                    	
                      $10,350

                    	
                      5.00%

                    	
                      Ausca Shipping Limited, Hong Kong

                    	
                      23-Jan-18

                    	
                      23-Mar-19 - 8-Jul-19

                    	 	 
	 	
                      2001    75,172

                    	 	 	 	 	 	 	 	 
	
                      3 

                    	
                      NIREFS

                    	
                      A

                    	
                      $9,400

                    	
                      5.00%

                    	
                      Jaldhi Overseas Pte. Ltd., Singapore

                    	
                      5-May-17

                    	
                      11-Aug-18

                    	 	 
	 	 	 	
                      $10,750

                    	
                      3.75%

                    	
                      Hudson Shipping Lines Incorporated

                    	
                      11-Aug-18

                    	
                      11-Jul-19 - 11-Oct-19

                    	 	 
	 	
                      2001    75,311

                    	 	 	 	 	 	 	 	 
	
                      4 

                    	
                      ALCYON

                    	
                      A

                    	
                      $8,800

                    	
                      5.00%

                    	
                      Hudson Shipping Lines Incorporated

                    	
                      20-Jul-17

                    	
                      29-Nov-18 - 18-Dec-18

                    	
                      1,2,3

                    	 
	 	
                      2001    75,247

                    	 	 	 	 	 	 	 	 
	
                      5 

                    	
                      TRITON

                    	
                      A

                    	
                      $6,500

                    	
                      5.00%

                    	
                      Ausca Shipping Limited, Hong Kong

                    	
                      8-Jun-17

                    	
                      15-Oct-18

                    	
                      4 

                    	 
	 	 	 	
                      $11,000

                    	
                      5.00%

                    	
                      Tongli Shipping Pte. Ltd.

                    	
                      4-Nov-18

                    	
                      26-Nov-18

                    	
                      1,3

                    	 
	 	
                      2001    75,336

                    	 	 	 	 	 	 	 	 
	
                      6 

                    	
                      OCEANIS

                    	
                      A

                    	
                      $7,000

                    	
                      5.00%

                    	
                      Ausca Shipping Limited, Hong Kong

                    	
                      30-May-17

                    	
                      16-Nov-18

                    	 	 
	 	 	 	
                      $10,350

                    	
                      5.00%

                    	
                      16-Nov-18

                    	
                      1-Jan-20 - 31-Mar-20

                    	 	 
	 	
                      2001    75,211

                    	 	 	 	 	 	 	 	 
	
                      7 

                    	
                      THETIS

                    	
                      B

                    	
                      $8,350

                    	
                      5.00%

                    	
                      Ausca Shipping Limited, Hong Kong

                    	
                      14-Jul-17

                    	
                      19-Oct-18

                    	
                      5,6

                    	 
	 	 	 	
                      $10,650

                    	
                      3.75%

                    	
                      Hudson Shipping Lines Incorporated

                    	
                      16-Nov-18

                    	
                      16-Jan-20 - 16-Apr-20

                    	 	 
	 	
                      2004    73,583

                    	 	 	 	 	 	 	 	 
	
                      8 

                    	
                      PROTEFS

                    	
                      B

                    	
                      $7,900

                    	
                      5.00%

                    	
                      Hudson Shipping Lines Incorporated

                    	
                      24-Jun-17

                    	
                      19-Sep-18

                    	 	 
	 	 	 	
                      $11,000

                    	
                      3.75%

                    	
                      19-Sep-18

                    	
                      4-Sep-19 - 19-Dec-19

                    	 	 
	 	
                      2004    73,630

                    	 	 	 	 	 	 	 	 
	
                      9 

                    	
                      CALIPSO

                    	
                      B

                    	
                      $12,200

                    	
                      5.00%

                    	
                      Glencore Agriculture B.V., Rotterdam

                    	
                      12-Mar-18

                    	
                      28-May-19 - 12-Sep-19

                    	 	 
	 	
                      2005    73,691

                    	 	 	 	 	 	 	 	 
	
                      10 

                    	
                      CLIO

                    	
                      B

                    	
                      $8,550

                    	
                      5.00%

                    	
                      Phaethon International Company AG

                    	
                      9-Jul-17

                    	
                      10-Nov-18

                    	 	 
	 	 	 	
                      $10,600

                    	
                      5.00%

                    	
                      Ausca Shipping Limited, Hong Kong

                    	
                      10-Nov-18

                    	
                      10-Sep-19 - 10-Dec-19

                    	 	 
	 	
                      2005    73,691

                    	 	 	 	 	 	 	 	 
	
                      11 

                    	
                      NAIAS

                    	
                      B

                    	
                      $10,000

                    	
                      5.00%

                    	
                      Phaethon International Company AG

                    	
                      26-Nov-17

                    	
                      11-Feb-19 - 26-May-19

                    	 	 
	 	
                      2006    73,546

                    	 	 	 	 	 	 	 	 
	
                      12 

                    	
                      ARETHUSA

                    	
                      B

                    	
                      $12,600

                    	
                      5.00%

                    	
                      Glencore Agriculture B.V., Rotterdam

                    	
                      27-Apr-18

                    	
                      27-Apr-19 - 27-Jul-19

                    	 	 
	 	
                      2007     73,593

                    	 	 	 	 	 	 	 	 
	
                      13 

                    	
                      ERATO

                    	
                      C

                    	
                      $10,500

                    	
                      5.00%

                    	
                      Phaethon International Company AG

                    	
                      30-Dec-17

                    	
                      2-Mar-19 - 30-May-19

                    	 	 
	 	
                      2004    74,444

                    	 	 	 	 	 	 	 	 
	
                      14 

                    	
                      CORONIS

                    	
                      C

                    	
                      $9,000

                    	
                      5.00%

                    	
                      Narina Maritime Ltd

                    	
                      16-May-17

                    	
                      11-Aug-18

                    	
                      7 

                    	 
	 	 	 	
                      $8,300

                    	
                      5.00%

                    	
                      CJ International Italy Societa Per Azioni

                    	
                      11-Aug-18

                    	
                      10-Oct-18

                    	 	 
	 	 	 	
                      $11,300

                    	
                      5.00%

                    	
                      10-Oct-18

                    	
                      11-Aug-19 - 11-Nov-19

                    	 	 
	 	
                      2006    74,381

                    	 	 	 	 	 	 	 	 
	
                      15 

                    	
                      MELIA

                    	 	
                      $12,000

                    	
                      5.00%

                    	
                      United Bulk Carriers International S.A., Luxemburg

                    	
                      28-Apr-18

                    	
                      28-Sep-19 - 28-Dec-19

                    	
                      8 

                    
	 	
                      2005     76,225

                    	 	 	 	 	 	 	 
	
                      16 

                    	
                      ARTEMIS

                    	 	
                      $9,000

                    	
                      5.00%

                    	
                      Ausca Shipping Limited, Hong Kong

                    	
                      8-Jul-17

                    	
                      17-Sep-18

                    	 
	 	 	 	
                      $12,600

                    	
                      5.00%

                    	
                      17-Sep-18

                    	
                      17-Sep-19 - 17-Dec-19

                    	 
	 	
                      2006     76,942

                    	 	 	 	 	 	 	 

              
                
                  

              

              

              

              	
                      17 

                    	
                      LETO

                    	 	
                      $12,500

                    	
                      5.00%

                    	
                      Glencore Agriculture B.V., Rotterdam

                    	
                      10-Jan-18

                    	
                      10-May-19 - 25-Aug-19

                    	 
	 	
                      2010     81,297

                    	 	 	 	 	 	 	 
	
                      18 

                    	
                      SELINA

                    	
                      D

                    	
                      $12,250

                    	
                      5.00%

                    	
                      BG Shipping Co., Limited, Hong Kong

                    	
                      6-Feb-18

                    	
                      6-Jun-19 - 6-Sep-19

                    	 
	 	
                      2010     75,700

                    	 	 	 	 	 	 	 
	
                      19 

                    	
                      MAERA

                    	
                      D

                    	
                      $11,900

                    	
                      5.00%

                    	
                      Unico Logistics Co., Ltd., Seoul

                    	
                      19-Sep-17

                    	
                      4-Jul-18

                    	 
	 	 	 	
                      $11,750

                    	
                      5.00%

                    	
                      ST Shipping and Transport Pte. Ltd., Singpore

                    	
                      4-Jul-18

                    	
                      20-Jan-19 - 4-Apr-19

                    	
                      9 

                    
	 	
                      2013     75,403

                    	 	 	 	 	 	 	 
	
                      20 

                    	
                      ISMENE

                    	 	
                      $12,000

                    	
                      5.00%

                    	
                      DHL Project & Chartering Limited, Hong Kong

                    	
                      16-Sep-17

                    	
                      29-Nov-18 - 16-Dec-18

                    	
                      1 

                    
	 	
                      2013     77,901

                    	 	 	 	 	 	 	 
	
                      21 

                    	
                      CRYSTALIA

                    	
                      E

                    	
                      $11,100

                    	
                      5.00%

                    	
                      Glencore Agriculture B.V., Rotterdam

                    	
                      3-Oct-17

                    	
                      30-Nov-18 - 18-Jan-19

                    	
                      1 

                    
	 	
                      2014    77,525

                    	 	 	 	 	 	 	 
	
                      22 

                    	
                      ATALANDI

                    	
                      E

                    	
                      $13,500

                    	
                      5.00%

                    	
                      Uniper Global Commodities SE, Düsseldorf

                    	
                      27-Apr-18

                    	
                      27-Jun-19 - 27-Sep-19

                    	 
	 	
                      2014    77,529

                    	 	 	 	 	 	 	 
	 	
                      5 Kamsarmax Bulk Carriers

                    	 	 
	
                      23 

                    	
                      MAIA

                    	
                      F

                    	
                      $10,125

                    	
                      5.00%

                    	
                      Glencore Agriculture B.V., Rotterdam

                    	
                      27-Jul-17

                    	
                      5-Nov-18

                    	
                      10 

                    
	 	 	 	
                      $13,300

                    	
                      5.00%

                    	
                      12-Nov-18

                    	
                      1-Jan-20 - 31-Mar-20

                    	 
	 	
                      2009     82,193

                    	 	 	 	 	 	 	 
	
                      24 

                    	
                      MYRSINI

                    	
                      F

                    	
                      $8,650

                    	
                      5.00%

                    	
                      RWE Supply & Trading GmbH, Essen

                    	
                      8-Jun-17

                    	
                      1-Dec-18 - 31-Dec-18

                    	
                      1 

                    
	 	
                      2010     82,117

                    	 	 	 	 	 	 	 
	
                      25 

                    	
                      MEDUSA

                    	
                      F

                    	
                      $10,000

                    	
                      4.75%

                    	
                      Cargill International S.A., Geneva

                    	
                      6-Jul-17

                    	
                      3-Sep-18

                    	 
	 	 	 	
                      $14,000

                    	
                      4.75%

                    	
                      3-Sep-18

                    	
                      3-Oct-19 - 3-Dec-19

                    	 
	 	
                      2010     82,194

                    	 	 	 	 	 	 	 
	
                      26 

                    	
                      MYRTO

                    	
                      F

                    	
                      $14,000

                    	
                      4.75%

                    	
                      Cargill International S.A., Geneva

                    	
                      25-Apr-18

                    	
                      25-May-19 - 25-Jul-19

                    	 
	 	
                      2013     82,131

                    	 	 	 	 	 	 	 
	
                      27 

                    	
                      ASTARTE

                    	 	
                      $9,000

                    	
                      5.00%

                    	
                      Glencore Agriculture B.V., Rotterdam

                    	
                      12-Jun-17

                    	
                      16-Oct-18

                    	 
	 	 	 	
                      $14,250

                    	
                      5.00%

                    	
                      16-Oct-18

                    	
                      16-Dec-19 - 16-Mar-20

                    	 
	 	
                      2013     81,513

                    	 	 	 	 	 	 	 
	 	
                      5 Post-Panamax Bulk Carriers

                    	 	 
	
                      28 

                    	
                      ALCMENE

                    	 	
                      $8,000

                    	
                      4.75%

                    	
                      Cargill International S.A., Geneva

                    	
                      8-Jun-17

                    	
                      6-Oct-18

                    	 	 
	 	 	 	
                      $14,000

                    	
                      5.00%

                    	
                      Smart Gain Shipping Co., Limited, Hong Kong

                    	
                      6-Oct-18

                    	
                      9-Nov-18

                    	 	 
	 	 	 	
                      $11,500

                    	
                      5.00%

                    	
                      BG Shipping Co., Limited, Hong Kong

                    	
                      21-Nov-18

                    	
                      21-Oct-19 - 21-Jan-20

                    	 	 
	 	
                      2010     93,193

                    	 	 	 	 	 	 	 	 
	
                      29 

                    	
                      AMPHITRITE

                    	
                      G

                    	
                      $11,150

                    	
                      4.75%

                    	
                      Cargill International S.A., Geneva

                    	
                      28-Sep-17

                    	
                      1-Dec-18 - 28-Jan-19

                    	
                      1 

                    	 
	 	
                      2012     98,697

                    	 	 	 	 	 	 	 	 
	
                      30 

                    	
                      POLYMNIA

                    	
                      G

                    	
                      $10,100

                    	
                      4.75%

                    	
                      Cargill International S.A., Geneva

                    	
                      15-Mar-17

                    	
                      9-Jul-18

                    	 	 
	 	 	 	
                      $16,000

                    	
                      4.75%

                    	
                      9-Jul-18

                    	
                      9-Sep-19 - 9-Dec-19

                    	 	 
	 	
                      2012    98,704

                    	 	 	 	 	 	 	 	 
	
                      31 

                    	
                      ELECTRA

                    	
                      H

                    	
                      $8,000

                    	
                      5.00%

                    	
                      Uniper Global Commodities SE, Düsseldorf

                    	
                      11-Jun-17

                    	
                      19-Oct-18

                    	 	 
	 	 	 	
                      $13,500

                    	
                      5.00%

                    	
                      19-Oct-18

                    	
                      15-Sep-19 - 15-Dec-19

                    	 	 
	 	
                      2013    87,150

                    	 	 	 	 	 	 	 	 

              
                
                  

              

              

              

              	
                      32 

                    	
                      PHAIDRA

                    	
                      H

                    	
                      $12,700

                    	
                      5.00%

                    	
                      Uniper Global Commodities SE, Düsseldorf

                    	
                      13-Jan-18

                    	
                      13-Jan-19 - 13-Apr-19

                    	 
	 	
                      2013    87,146

                    	 	 	 	 	 	 	 
	 	
                      14 Capesize Bulk Carriers

                    
	
                      33 

                    	
                      NORFOLK

                    	 	
                      $13,250

                    	
                      5.00%

                    	
                      SwissMarine Services S.A., Geneva

                    	
                      1-Dec-17

                    	
                      1-Sep-19 - 1-Dec-19

                    	 
	 	
                      2002    164,218

                    	 	 	 	 	 	 	 
	
                      34 

                    	
                      ALIKI

                    	 	
                      $18,000

                    	
                      5.00%

                    	
                      SwissMarine Services S.A., Geneva

                    	
                      9-Apr-18

                    	
                      9-Dec-19 - 9-Feb-20

                    	 
	 	
                      2005    180,235

                    	 	 	 	 	 	 	 
	
                      35 

                    	
                      BALTIMORE

                    	 	
                      $18,050

                    	
                      5.00%

                    	
                      Koch Shipping Pte. Ltd., Singapore

                    	
                      6-Jun-18

                    	
                      22-May-19 - 21-Aug-19

                    	 
	 	
                      2005    177,243

                    	 	 	 	 	 	 	 
	
                      36 

                    	
                      SALT LAKE CITY

                    	 	
                      $16,250

                    	
                      4.75%

                    	
                      Cargill International S.A., Geneva

                    	
                      1-May-18

                    	
                      1-Jan-19 - 1-Mar-19

                    	 
	 	
                      2005    171,810

                    	 	 	 	 	 	 	 
	
                      37 

                    	
                      SIDERIS GS

                    	
                      I

                    	
                      $13,000

                    	
                      5.00%

                    	
                      Rio Tinto Shipping (Asia) Pte., Ltd., Singapore

                    	
                      21-Jun-17

                    	
                      15-Nov-18

                    	 
	 	 	 	
                      $8,500

                    	
                      5.00%

                    	
                      Berge Bulk Shipping Pte. Ltd., Singapore

                    	
                      15-Nov-18

                    	
                      15-Dec-18

                    	 
	 	 	 	
                      $15,350

                    	
                      5.00%

                    	
                      15-Dec-18

                    	
                      15-Dec-19 - 30-Mar-20

                    	 
	 	
                      2006    174,186

                    	 	 	 	 	 	 	 
	
                      38 

                    	
                      SEMIRIO

                    	
                      I

                    	
                      $14,150

                    	
                      5.00%

                    	
                      Koch Shipping Pte. Ltd., Singapore

                    	
                      21-May-17

                    	
                      1-Sep-18

                    	 
	 	 	 	
                      $20,050

                    	
                      5.00%

                    	
                      Pacific Bulk Cape Company Limited, Hong Kong

                    	
                      1-Sep-18

                    	
                      1-Jul-19 - 16-Sep-19

                    	 
	 	
                      2007    174,261

                    	 	 	 	 	 	 	 
	
                      39 

                    	
                      BOSTON

                    	
                      I

                    	
                      $17,000

                    	
                      5.00%

                    	
                      EGPN Bulk Carrier Co., Limited, Hong Kong

                    	
                      6-Dec-17

                    	
                      6-Apr-19 - 6-Jul-19

                    	 
	 	
                      2007    177,828

                    	 	 	 	 	 	 	 
	
                      40 

                    	
                      HOUSTON

                    	
                      I

                    	
                      $19,000

                    	
                      5.00%

                    	
                      SwissMarine Services S.A., Geneva

                    	
                      9-May-18

                    	
                      25-Jan-19 - 24-Apr-19

                    	 
	 	
                      2009    177,729

                    	 	 	 	 	 	 	 
	
                      41 

                    	
                      NEW YORK

                    	
                      I

                    	
                      $16,000

                    	
                      5.00%

                    	
                      DHL Project & Chartering Limited, Hong Kong

                    	
                      2-Feb-18

                    	
                      2-Jun-19 - 2-Sep-19

                    	 
	 	
                      2010    177,773

                    	 	 	 	 	 	 	 
	
                      42 

                    	
                      SEATTLE

                    	
                      J

                    	
                      $11,700

                    	
                      5.00%

                    	
                      Koch Shipping Pte. Ltd., Singapore

                    	
                      8-Feb-17

                    	
                      30-Jul-18

                    	
                      11 

                    
	 	 	 	
                      $24,000

                    	
                      5.00%

                    	
                      30-Jul-18

                    	
                      30-Nov-18 - 30-Jan-19

                    	 
	 	
                      2011     179,362

                    	 	 	 	 	 	 	 
	
                      43 

                    	
                      P. S. PALIOS

                    	
                      J

                    	
                      $17,350

                    	
                      5.00%

                    	
                      Koch Shipping Pte. Ltd., Singapore

                    	
                      24-May-18

                    	
                      9-Jun-19 - 24-Aug-19

                    	 
	 	
                      2013    179,134

                    	 	 	 	 	 	 	 
	
                      44 

                    	
                      G. P. ZAFIRAKIS

                    	
                      K

                    	
                      $15,000

                    	
                      5.00%

                    	
                      RWE Supply & Trading GmbH, Essen

                    	
                      14-Aug-17

                    	
                      30-Nov-18 - 14-Jan-19

                    	
                      1 

                    
	 	
                      2014    179,492

                    	 	 	 	 	 	 	 
	
                      45 

                    	
                      SANTA BARBARA

                    	
                      K

                    	
                      $20,250

                    	
                      4.75%

                    	
                      Cargill International S.A., Geneva

                    	
                      24-Apr-18

                    	
                      9-Oct-19 - 9-Dec-19

                    	 
	 	
                      2015     179,426

                    	 	 	 	 	 	 	 
	
                      46 

                    	
                      NEW ORLEANS

                    	 	
                      $21,000

                    	
                      5.00%

                    	
                      SwissMarine Services S.A., Geneva

                    	
                      24-Mar-18

                    	
                      24-Feb-19 - 24-Apr-19

                    	 
	 	
                      2015    180,960

                    	 	 	 	 	 	 	 

              
                
                  

              

              

              

              	 	
                      4 Newcastlemax Bulk Carriers

                    
	
                      47 

                    	
                      LOS ANGELES

                    	
                      L

                    	
                      $19,150

                    	
                      5.00%

                    	
                      SwissMarine Services S.A., Geneva

                    	
                      16-Apr-18

                    	
                      1-Jan-19 - 16-Apr-19

                    	 
	 	
                      2012    206,104

                    	 	 	 	 	 	 	 
	
                      48 

                    	
                      PHILADELPHIA

                    	
                      L

                    	
                      $20,000

                    	
                      5.00%

                    	
                      Koch Shipping Pte. Ltd., Singapore

                    	
                      18-Jun-18

                    	
                      3-Feb-20 - 18-May-20

                    	 
	 	
                      2012    206,040

                    	 	 	 	 	 	 	 
	
                      49 

                    	
                      SAN FRANCISCO

                    	
                      M

                    	
                      $24,000

                    	
                      5.00%

                    	
                      Koch Shipping Pte. Ltd., Singapore

                    	
                      14-May-18

                    	
                      4-Mar-19 - 24-May-19

                    	 
	 	
                      2017   208,006

                    	 	 	 	 	 	 	 
	
                      50 

                    	
                      NEWPORT NEWS

                    	
                      M

                    	
                      BCI_2014 5TCs AVG + 24%

                    	
                      5.00%

                    	
                      SwissMarine Services S.A., Geneva

                    	
                      10-Jan-17

                    	
                      1-Dec-18 - 10-Mar-19

                    	
                      1 

                    
	 	
                      2017   208,021

                    	 	 	 	 	 	 	 
	
                      * Each dry bulk carrier is a "sister ship", or closely similar, to other dry bulk carriers that have the same letter.

                    
	
                      ** Total commission percentage paid to third parties.

                    
	
                      *** In case of newly acquired vessel with time charter attached, this date refers to the expected/actual date of delivery of
                          the vessel to the Company.

                    
	
                      **** Range of redelivery dates, with the actual date of redelivery being at the Charterers’ option, but subject to the terms,
                          conditions, and exceptions of the particular charterparty.

                    
	 
	
                      1 Based on latest information.

                    
	
                      2 Vessel off hire for unscheduled maintenance from May 30, 2018 to July 10, 2018.

                    
	
                      3 Vessel sold and expected to be delivered to her new Owners at the latest by January 7, 2019.

                    
	
                      4 Vessel on scheduled drydocking from October 17, 2018 to November 1, 2018.

                    
	
                      5 Charterers have agreed to pay the weighted average of the Baltic Panamax 4 T/C routes, as published by the Baltic Exchange
                          on October 15, 2018, for the excess period commencing from October 14, 2018.

                    
	
                      6 Vessel on scheduled drydocking from October 22, 2018 to November 16, 2018.

                    
	
                      7 Charterers have agreed to pay the weighted average of the Baltic Panamax 4 T/C routes, as published by the Baltic Exchange
                          on August 6, 2018, for the excess period commencing from August 5, 2018, in case it is higher than the current rate of US$ 9,000.

                    
	
                      8 Vessel off hire from October 22, 2018 to October 25, 2018.

                    
	
                      9 Vessel off hire from August 9, 2018 to August 12, 2018.

                    
	
                      10 Charterers have agreed to pay the weighted average of the Baltic Panamax 4 T/C routes, as published by the Baltic Exchange
                          on October 26, 2018 plus 18%, only in case it is higher than the exsisting rate of US$10,125 which otherwise will continue to apply, for the excess period commencing from October 27, 2018.

                    
	
                      11 Charterers have agreed to pay the weighted average of the Baltic Capesize 5 T/C routes, as published by the Baltic Exchange
                          on July 23, 2018 plus 5%, for the excess period commencing from July 23, 2018.

                    

              

              

              

              

              Management of Our Fleet

              The commercial and technical management of our fleet, as well as the provision of administrative services relating to the fleet’s
                  operations, are carried out by our wholly-owned subsidiary, Diana Shipping Services S.A., and out 50/50 joint venture Diana Wilhelmsen Management Limited, pursuant to a management agreement between the management company and each ship
                  owning company whose vessel is managed by it. All management agreements are not for a specific time period and may be terminated by either party by giving three months prior notice in writing unless the ship is sold or becomes a total
                  loss, or with immediate effect, against payment to the Managers of damages. In exchange for providing us with commercial and technical services, personnel and office space, we pay Diana Shipping Services S.A., a commission, which is a
                  percentage of the managed vessels’ gross revenues, a fixed monthly fee per managed vessel and an additional monthly fee for the administrative services provided to Diana Shipping Inc. Such services may include budgeting, reporting,
                  monitoring of bank accounts, compliance with banks, payroll services and any other possible service that Diana Shipping Inc. would require to perform its operations. Similarly, in exchange for providing us with commercial and technical
                  services, we pay Diana Wilhelmsen Management Limited a commission which is a percentage of the managed vessels’ gross revenues and a fixed management monthly fee for each managed vessel. The amounts deriving from the agreements with Diana
                  Shipping Services S.A. are considered inter-company transactions and, therefore, are eliminated from our consolidated financial statements. The management fees deriving from the agreements with Diana Wilhelmsen Management Limited are
                  included in our statement of operations as “Management fees to related party”, whereas commercial fees are included in “Voyage expenses”. Since June 1, 2010, Diana Enterprises Inc., renamed to Steamship Shipbroking Enterprises Inc., or
                  Steamship, a related party controlled by our Chief Executive Officer and Chairman of the Board, Mr. Simeon Palios, provides brokerage

              
                
                  

              

              

              

              services to us. Brokerage fees are included in “General and Administrative expenses” in our statement of operations. The terms of
                  this relationship are currently governed by a Brokerage Services Agreement dated April 1, 2017.

              

              

              Our Customers

              Our customers include national, regional and international companies, such as Cargill International S.A., Glencore Grain B.V., EDF
                  Trading Ltd, RWE Supply and Trading Gmbh, Clearlake Shipping Pte Ltd, Koch Shipping Pte Ltd and Swissmarine Services S.A. During 2017, three of our charterers accounted for 43% of our revenues: Koch (17%), Swissmarine (14%), and Cargill
                  (12%). During 2016, four of our charterers accounted for 54% of our revenues: RWE Supply (19%), Swissmarine (15%), Cargill (10%) and Glencore (10%). During 2015, four of our charterers accounted for 66% of our revenues: EDF Trading (10%),
                  Glencore (20%), RWE Supply (24%) and Clearlake (12%).

              

              

              We charter our dry bulk carriers to customers pursuant to time charters. Under our time charters, the charterer typically pays us a
                  fixed daily charter hire rate and bears all voyage expenses, including the cost of bunkers (fuel oil) and canal and port charges. We remain responsible for paying the chartered vessel’s operating expenses, including the cost of crewing,
                  insuring, repairing and maintaining the vessel. In 2017, we paid commissions that ranged from 4.75% to 5.0% of the total daily charter hire rate of each charter to unaffiliated ship brokers and to in-house brokers associated with the
                  charterer, depending on the number of brokers involved with arranging the charter.

              

              

              We strategically monitor developments in the dry bulk shipping industry on a regular basis and, subject to market demand, seek to
                  adjust the charter hire periods for our vessels according to prevailing market conditions. In order to take advantage of relatively stable cash flow and high utilization rates, we fix some of our vessels on long-term time charters.
                  Currently, the majority of our vessels are employed on short to medium-term time charters, which provides us with flexibility in esponding to market developments. We continuously evaluate our balance of short- and long-term charters and
                  extend or reduce the charter hire periods of the vessels in our fleet according to the developments in the dry bulk shipping industry.

              

              

              The Dry Bulk Shipping Industry

              The global dry bulk carrier fleet could be divided into seven categories based on a vessel’s carrying capacity. These categories
                  consist of:

              

              

              > Very Large Ore Carriers. Very large ore carriers, or VLOCs, have a carrying capacity of more than 200,000 dwt and are a
                  comparatively new sector of the dry bulk carrier fleet. VLOCs are built to exploit economies of scale on long-haul iron ore routes.

              

              

              > Capesize. Capesize vessels have a carrying capacity of 110,000-199,999 dwt. Only the largest ports around the world possess
                  the infrastructure to accommodate vessels of this size. Capesize vessels are primarily used to transport iron ore or coal and, to a much lesser extent, grains, primarily on long-haul routes.

              

              

              > Post-Panamax. Post-Panamax vessels have a carrying capacity of 80,000-109,999 dwt. These vessels tend to have a shallower
                  draft and larger beam than a standard Panamax vessel with a higher cargo capacity. These vessels have been designed specifically for loading high cubic cargoes from draught restricted ports, although they cannot transit the Panama Canal.

              

              

              > Panamax. Panamax vessels have a carrying capacity of 60,000-79,999 dwt. These vessels carry coal, iron ore, grains, and, to a
                  lesser extent, minor bulks, including steel products, cement and fertilizers. Panamax vessels are able to pass through the Panama Canal, making them more versatile than larger vessels with regard to accessing different trade routes. Most
                  Panamax and Post-Panamax vessels are “gearless,” and therefore must be served by shore-based cargo handling equipment. However, there are a small number of geared vessels with onboard cranes, a feature that enhances trading flexibility
                  and enables operation in ports which have poor infrastructure in terms of loading and unloading facilities.

              

              

              > Handymax/Supramax. Handymax vessels have a carrying capacity of 40,000-59,999 dwt. These vessels operate in a large number of
                  geographically dispersed global trade routes, carrying primarily grains and minor bulks. Within the Handymax category there is also a sub-sector known as Supramax. Supramax bulk carriers are ships between 50,000 to 59,999 dwt, normally
                  offering cargo loading and unloading flexibility with on-board cranes, or “gear,” while at the same time possessing the cargo carrying capability approaching conventional Panamax bulk carriers.

              

              

              > Handysize. Handysize vessels have a carrying capacity of up to 39,999 dwt. These vessels are primarily involved in carrying
                  minor bulk cargoes. Increasingly, ships of this type operate within regional trading routes, and may serve as trans-shipment feeders for larger vessels. Handysize vessels are well suited for small ports with length and draft restrictions.
                  Their cargo gear enables them to service ports lacking the infrastructure for cargo loading and unloading.

              

              

              Other size categories occur in regional trade, such as Kamsarmax, with a maximum length of 229 meters, the maximum length that can
                  load in the port of Kamsar in the Republic of Guinea. Other terms such as Seawaymax, Setouchmax, Dunkirkmax, and Newcastlemax also appear in regional trade.

              
                
                  

              

              

              

              

              

              

              

              The supply of dry bulk carriers is dependent on the delivery of new vessels and the removal of vessels from the global fleet,
                  either through scrapping or loss. The level of scrapping activity is generally a function of scrapping prices in relation to current and prospective charter market conditions, as well as operating, repair and survey costs. The average age
                  at which a vessel is scrapped was 25 years in 2017, 23 years in 2016 and 25 years in 2015.

              

              

              The demand for dry bulk carrier capacity is determined by the underlying demand for commodities transported in dry bulk carriers,
                  which in turn is influenced by trends in the global economy. Demand for dry bulk carrier capacity is also affected by the operating efficiency of the global fleet, along with port congestion, which has been a feature of the market since
                  2004, absorbing tonnage and therefore leading to a tighter balance between supply and demand. In evaluating demand factors for dry bulk carrier capacity, the Company believes that dry bulk carriers can be the most versatile element of the
                  global shipping fleets in terms of employment alternatives.

              

              

              Charter Hire Rates

              Charter hire rates fluctuate by varying degrees among dry bulk carrier size categories. The volume and pattern of trade in a small
                  number of commodities (major bulks) affect demand for larger vessels. Therefore, charter rates and vessel values of larger vessels often show greater volatility. Conversely, trade in a greater number of commodities (minor bulks) drives
                  demand for smaller dry bulk carriers. Accordingly, charter rates and vessel values for those vessels are usually subject to less volatility.

              

              

              Charter hire rates paid for dry bulk carriers are primarily a function of the underlying balance between vessel supply and demand,
                  although at times other factors may play a role. Furthermore, the pattern seen in charter rates is broadly mirrored across the different charter types and the different dry bulk carrier categories. In the time charter market, rates vary
                  depending on the length of the charter period and vessel-specific factors such as age, speed and fuel consumption.

              

              

              In the voyage charter market, rates are, among other things, influenced by cargo size, commodity, port dues and canal transit fees,
                  as well as commencement and termination regions. In general, a larger cargo size is quoted at a lower rate per ton than a smaller cargo size. Routes with costly ports or canals generally command higher rates than routes with low port dues
                  and no canals to transit. Voyages with a load port within a region that includes ports where vessels usually discharge cargo or a discharge port within a region with ports where vessels load cargo also are generally quoted at lower rates,
                  because such voyages generally increase vessel utilization by reducing the unloaded portion (or ballast leg) that is included in the calculation of the return charter to a loading area.

              

              

              Within the dry bulk shipping industry, the charter hire rate references most likely to be monitored are the freightrate indices
                  issued by the Baltic Exchange. These references are based on actual charter hire rates under charters entered into by market participants as well as daily assessments provided to the Baltic Exchange by a panel of major shipbrokers. The
                  Baltic Panamax Index is the index with the longest history. The Baltic Capesize Index and Baltic Handymax Index are of more recent origin.

              

              

              The Baltic Dry Index, or BDI, a daily average of charter rates in 20 shipping routes measured on a time charter and voyage basis
                  and covering Capesize, Panamax, Supramax, and Handysize dry bulk carriers declined from a high of 11,793 in May 2008 to a low of 663 in December 2008. In 2015, the BDI ranged from a high of 1,222 in August to a low of 471 in December. In
                  2016, the BDI ranged from a record low of 290 in February to a high of 1,257 in November. In 2017, the BDI ranged from a low of 685 in February to a high of 1,743 in December (Source: Clarksons Research).

              

              

              Vessel Prices

              Dry bulk vessel values increased in 2017 as compared to 2016 and 2015. Consistent with these trends, the market value of our dry
                  bulk carriers had also increased. As charter rates and vessel values remain at relatively low levels, there can be no assurance as to how long charter rates and vessel values will remain at their current levels or whether they will
                  decrease or improve to any significant degree in the near future.

              

              

              Competition

              Our business fluctuates in line with the main patterns of trade of the major dry bulk cargoes and varies according to changes in
                  the supply and demand for these items. We operate in markets that are highly competitive and based primarily on supply and demand. We compete for charters on the basis of price, vessel location, size, age and condition of the vessel, as
                  well as on our reputation as an owner and operator. We compete with other owners of dry bulk carriers in the Panamax,

              Post-Panamax and smaller class sectors and with owners of Capesize and Newcastlemax dry bulk carriers. Ownership of dry bulk
                  carriers is highly fragmented.

              

              

              We believe that we possess a number of strengths that provide us with a competitive advantage in the dry bulk shipping industry:

              

              

              > We own a modern, high quality fleet of dry bulk carriers. We believe that owning a modern, high quality fleet reduces
                  operating costs, improves safety and provides us with a competitive advantage in securing favorable time charters. We

              
                
                  

              

              

              

              maintain the quality of our vessels by carrying out regular inspections, both while in port and at sea, and adopting a
                  comprehensive maintenance program for each vessel.

              

              

              > Our fleet includes thirteen groups of sister ships. We believe that maintaining a fleet that includes sister ships enhances
                  the revenue generating potential of our fleet by providing us with operational and scheduling flexibility. The uniform nature of sister ships also improves our operating efficiency by allowing our fleet manager to apply the technical
                  knowledge of one vessel to all vessels of the same series and creates economies of scale that enable us to realize cost savings when maintaining, supplying and crewing our vessels.

              

              

              > We have an experienced management team. Our management team consists of experienced executives who have, on average, more than
                  30 years of operating experience in the shipping industry and has demonstrated ability in managing the commercial, technical and financial areas of our business. Our management team is led by Mr. Simeon Palios, a qualified naval architect
                  and engineer who has more than 40 years of experience in the shipping industry.

              

              

              > We benefit from the experience and reputation of Diana Shipping Services S.A. and the relationship with Wilhelmsen Ship
                  Management through the Diana Wilhelmsen Management Limited joint venture.

              

              

              > We benefit from strong relationships with members of the shipping and financial industries. We have developed strong
                  relationships with major international charterers, shipbuilders and financial institutions that we believe are the result of the quality of our operations, the strength of our management team and our reputation for dependability.

              

              

              > We have a strong balance sheet and a relatively low level of indebtedness. We believe that our strong balance sheet and
                  relatively low level of indebtedness provide us with the flexibility to increase the amount of funds that we may draw under our loan facilities in connection with any future acquisitions or otherwise and enable us to use cash flow that
                  would otherwise be dedicated to debt service for other purposes.

              4.3 Organizational structure

              

              

              Diana Shipping Inc. is the sole owner of all of the issued and outstanding shares of its subsidiaries. Each of the vessels is owned
                  through a separate wholly-owned subsidiary. Subsidiaries without a vessel are dormant and do not have any operations. Bulk Carriers (USA) LLC, our agent
                  and authorized representative in the United States is also our wholly-owned subsidiary. Diana Shipping Inc., as parent company, is dependent upon its
                  subsidiaries, as a significant part of the cash flow generation required to service the parent company’s obligations originate from these subsidiaries.

              

              

              Below is the organizational chart of the DSI Group of companies:

              

              

            

            

            
              

              

            

            
              
                

            

             

          

            

            

            4.4 Fleet list

            Diana Shipping Inc. wholly owns the subsidiaries which own the vessels that comprise our fleet below:

            

            

            	
                    Diana Shipping Inc. Fleet List

                  
	
                    Panamax Gearless Bulk Carriers

                  
	
                    Name of Vessel

                  	
                    Size (deadweight tons)

                  	
                    Year Built

                  	
                    Company

                  	
                    Flag

                  	
                    Management Company

                  
	
                    Danae

                  	
                    75,106

                  	
                    2001

                  	
                    EATON MARINE S.A.

                  	
                    Greek

                  	
                    DSS

                  
	
                    Dione

                  	
                    75,172

                  	
                    2001

                  	
                    CHORRERA COMPAÑIA ARMADORA S.A.

                  	
                    Greek

                  	
                    DSS

                  
	
                    Nirefs

                  	
                    75,311

                  	
                    2001

                  	
                    SKYVAN SHIPPING COMPANY S.A.

                  	
                    Bahamas

                  	
                    DWM

                  
	
                    Alcyon*

                  	
                    75,247

                  	
                    2001

                  	
                    BUENOS AIRES COMPAÑIA ARMADORA S.A.

                  	
                    Bahamas

                  	
                    DWM

                  
	
                    Triton*

                  	
                    75,336

                  	
                    2001

                  	
                    HUSKY TRADING, S.A.

                  	
                    Bahamas

                  	
                    DWM

                  
	
                    Oceanis

                  	
                    75,211

                  	
                    2001

                  	
                    PANAMA COMPAÑIA ARMADORA S.A.

                  	
                    Bahamas

                  	
                    DSS

                  
	
                    Thetis

                  	
                    73,583

                  	
                    2004

                  	
                    CHANGAME COMPAÑIA ARMADORA S.A.

                  	
                    Bahamas

                  	
                    DSS

                  
	
                    Protefs

                  	
                    73,630

                  	
                    2004

                  	
                    CYPRES ENTERPRISES CORP.

                  	
                    Bahamas

                  	
                    DWM

                  
	
                    Calipso

                  	
                    73,691

                  	
                    2005

                  	
                    DARIEN COMPAÑIA ARMADORA S.A.

                  	
                    Bahamas

                  	
                    DWM

                  
	
                    Clio

                  	
                    73,691

                  	
                    2005

                  	
                    TEXFORD MARITIME S.A.

                  	
                    Bahamas

                  	
                    DWM

                  
	
                    Naias

                  	
                    73,546

                  	
                    2006

                  	
                    AILUK SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DWM

                  
	
                    Arethusa

                  	
                    73,593

                  	
                    2007

                  	
                    BIKAR SHIPPING COMPANY INC.

                  	
                    Greek

                  	
                    DSS

                  
	
                    Erato

                  	
                    74,444

                  	
                    2004

                  	
                    URBINA BAY TRADING, S.A.

                  	
                    Bahamas

                  	
                    DSS

                  
	
                    Coronis

                  	
                    74,381

                  	
                    2006

                  	
                    VESTA COMMERCIAL, S.A.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Melia

                  	
                    76,225

                  	
                    2005

                  	
                    MANDARINGINA INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Artemis

                  	
                    76,942

                  	
                    2006

                  	
                    FAYO SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Leto

                  	
                    81,297

                  	
                    2010

                  	
                    JEMO SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Selina

                  	
                    75,700

                  	
                    2010

                  	
                    KABEN SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Maera

                  	
                    75,403

                  	
                    2013

                  	
                    WAKE SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Ismene

                  	
                    77,901

                  	
                    2013

                  	
                    TAROA SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Crystalia

                  	
                    77,525

                  	
                    2014

                  	
                    ERIKUB SHIPPING COMPANY INC.

                  	
                    Greek

                  	
                    DSS

                  
	
                    Atalandi

                  	
                    77,529

                  	
                    2014

                  	
                    WOTHO SHIPPING COMPANY INC.

                  	
                    Greek

                  	
                    DSS

                  
	
                    Kamsarmax Bulk Carriers

                  
	
                    Name of Vessel

                  	
                    Size (deadweight tons)

                  	
                    Year Built

                  	
                    Company

                  	
                    Flag

                  	
                    Management Company

                  
	
                    Maia

                  	
                    82,193

                  	
                    2009

                  	
                    JABAT SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Myrsini

                  	
                    82,117

                  	
                    2010

                  	
                    MAKUR SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Medusa

                  	
                    82,194

                  	
                    2010

                  	
                    RAIROK SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Myrto

                  	
                    82,131

                  	
                    2013

                  	
                    TUVALU SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Astarte

                  	
                    81,513

                  	
                    2013

                  	
                    EBADON SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  

            
              
                

            

            

            

            	
                    Post-Panamax Bulk Carriers

                  
	
                    Name of Vessel

                  	
                    Size (deadweight tons)

                  	
                    Year Built

                  	
                    Company

                  	
                    Flag

                  	
                    Management Company

                  
	
                    Alcmene

                  	
                    93,193

                  	
                    2010

                  	
                    MAJURO SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DWM

                  
	
                    Amphitrite

                  	
                    98,697

                  	
                    2012

                  	
                    GUAM SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Polymnia

                  	
                    98,704

                  	
                    2012

                  	
                    PALAU SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Electra

                  	
                    87,150

                  	
                    2013

                  	
                    RAKARU SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Phaidra

                  	
                    87,146

                  	
                    2013

                  	
                    MEJATO SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Capesize Bulk Carriers

                  
	
                    Name of Vessel

                  	
                    Size (deadweight tons)

                  	
                    Year Built

                  	
                    Company

                  	
                    Flag

                  	
                    Management Company

                  
	
                    Norfolk

                  	
                    164,218

                  	
                    2002

                  	
                    SILVER CHANDRA SHIPPING COMPANY LIMITED

                  	
                    Cyprus

                  	
                    DSS

                  
	
                    Aliki

                  	
                    180,235

                  	
                    2005

                  	
                    KNOX SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Baltimore

                  	
                    177,243

                  	
                    2005

                  	
                    BOKAK SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Salt Lake City

                  	
                    171,810

                  	
                    2005

                  	
                    MARFORT NAVIGATION COMPANY LIMITED

                  	
                    Cyprus

                  	
                    DWM

                  
	
                    Sideris GS

                  	
                    174,186

                  	
                    2006

                  	
                    JALUIT SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Semirio

                  	
                    174,261

                  	
                    2007

                  	
                    KILI SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DWM

                  
	
                    Boston

                  	
                    177,828

                  	
                    2007

                  	
                    LIB SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Houston

                  	
                    177,729

                  	
                    2009

                  	
                    GALA PROPERTIES INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    New York

                  	
                    177,773

                  	
                    2010

                  	
                    BIKINI SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Seattle

                  	
                    179,362

                  	
                    2011

                  	
                    TOKU SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    P. S. Palios

                  	
                    179,134

                  	
                    2013

                  	
                    PULAP SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    G. P. Zafirakis

                  	
                    179,492

                  	
                    2014

                  	
                    WENO SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Santa Barbara

                  	
                    179,426

                  	
                    2015

                  	
                    LELU SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    New Orleans

                  	
                    180,960

                  	
                    2015

                  	
                    UJAE SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Newcastlemax Bulk Carriers

                  
	
                    Name of Vessel

                  	
                    Size (deadweight tons)

                  	
                    Year Built

                  	
                    Company

                  	
                    Flag

                  	
                    Management Company

                  
	
                    Los Angeles

                  	
                    206,104

                  	
                    2012

                  	
                    LAE SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Philadelphia

                  	
                    206,040

                  	
                    2012

                  	
                    NAMU SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    San Francisco

                  	
                    208,006

                  	
                    2017

                  	
                    ASTER SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Newport News

                  	
                    208,021

                  	
                    2017

                  	
                    AERIK SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  

            *Vessel sold and expected to be delivered to her new Owners at the latest by January 7, 2019.

            

            

            
              
                

            

            

            

            4.5 Selected financial information

            

            

            The following tables set forth our selected consolidated financial data as of and for the years ended December 31, 2017, 2016, 2015,
                2014 and 2013 and the three months and nine months ended September 30, 2018 and 2017. The selected consolidated financial data as of and for the years ended December 31, 2017, 2016, 2015, 2014 and 2013 are derived from our audited
                consolidated financial statements and notes thereto which have been prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP.

            

            

            

            

            

            

            

            

            

            

            

            

            
              
                

            

            

            

            4.6 Financing

            

            

            As at December 31, 2017, we had $604.8 million of long term debt outstanding under our facilities and Notes and consisted of the
                agreements described below.

            

            

            Secured Term Loans:

            

            

            On October 22, 2009, our wholly-owned subsidiary Gala Properties Inc. entered into a $40.0 million loan agreement with Bremer
                Landesbank ("Bremer") to partly finance the acquisition cost of the Houston. The loan is repayable in 40 quarterly installments of $0.9 million plus one balloon installment of $4.0 million to be paid together with the last installment on
                November 12, 2019. The loan bears interest at LIBOR plus a margin of 2.15% per annum.

            

            

            On October 2, 2010, our wholly-owned subsidiaries Lae Shipping Company Inc. ("Lae") and Namu Shipping Company Inc., ("Namu") entered
                into a loan agreement with Export-Import Bank of China ("CEXIM Bank") and DnB NOR Bank ASA ("DnB") to finance part of the construction cost of the Los Angeles, and the Philadelphia, for an amount of up to $82.6 million, of which $72.1
                million was drawn, being 70% of the vessels' market value on delivery. The Lae advance is repayable in 40 quarterly installments of approximately $0.6 million and a balloon of $12.3 million payable together with the last installment on
                February 15, 2022. The Namu advance is repayable in 40 quarterly installments of approximately $0.6 million and a balloon of $11.4 million payable together with the last installment on May 18, 2022. Pursuant to an amendment of the loan
                agreement dated May 18, 2017, each of the individual banks are allowed to demand repayment in full of such bank's contribution in any or all advances on August 16, 2019. If one or more banks (acting through the agent) exercise such right in
                respect of an advance, the borrowers shall be obliged to repay each such bank's contribution in that advance in full on such date. The loan bears interest at LIBOR plus a margin of 2.50% per annum.

            

            

            On September 13, 2011, our wholly-owned subsidiary Bikar Shipping Company Inc. ("Bikar") entered into a loan agreement with Emporiki
                Bank of Greece S.A. ("Emporiki") for a loan of up to $15.0 million to refinance part of the acquisition cost of the Arethusa. On December 13, 2012, Bikar, the Company, DSS and Credit Agricole Corporate and Investment Bank ("Credit
                Agricole") entered into a supplemental loan agreement to transfer the outstanding loan balance, the ISDA master swap agreement and the existing security documents from Emporiki to Credit Agricole. The loan is repayable in 20 equal
                semiannual installments of $0.5 million each and a balloon payment of $5.0 million to be paid together with the last installment on September 15, 2021. The loan bears interest at LIBOR plus a margin of 2.5% per annum, or 1% for such loan
                amount that is equivalently secured by cash pledge in favor of the bank.

            

            

            On May 24, 2013, our wholly-owned subsidiaries Erikub Shipping Company Inc. ("Erikub") and Wotho Shipping Company Inc. ("Wotho")
                entered into a loan agreement with CEXIM Bank and DnB to finance part of the construction cost of Crystalia and Atalandi for an amount of up to $15.0 million for each vessel, drawn on May 22, 2014. Each advance is repayable in 19 quarterly
                installments of $250,000 and a balloon of $10.3 million payable together with the last installment on February 22, 2019. The loan bears interest at LIBOR plus a margin of 3.0% per annum.

            

            

            On January 9, 2014, our wholly-owned subsidiaries Taka Shipping Company Inc. and Fayo Shipping Company Inc. entered into a loan
                agreement with Commonwealth Bank of Australia, London Branch, for a loan facility of up to $18.0 million to finance part of the acquisition cost of the Melite and Artemis. The loan bears interest at LIBOR plus a margin of 2.25%. The loan
                was drawn in two tranches, one of $8.5 million assigned to Melite and one of $9.5 million assigned to Artemis. Tranche A is repayable in 24 equal consecutive quarterly installments of $195,833 each; and a balloon of $3.8 million payable on
                January 13, 2020. Tranche B is repayable in 32 equal consecutive quarterly installments of $156,250 each and a balloon of $4.5 million payable on January 13, 2022. As a result of the grounding incident of the Melite and the subsequent sale
                of the vessel, Tranche A was repaid in full in October 2017.

            

            

            On December 18, 2014, our wholly-owned subsidiaries Weno Shipping Company Inc. ("Weno") and Pulap Shipping Company Inc. ("Pulap")
                entered into a loan agreement with BNP Paribas ("BNP"), for a loan facility of up to $55.0 million to finance part of the acquisition cost of the G. P. Zafirakis and the P. S. Palios, of which $53.5 million was drawn. The loan bears
                interest at LIBOR plus a margin of 2%, and is repayable in 14 equal semi-annual installments of approximately $1.6 million and a balloon of $31.5 million, payable on November 30, 2021.

            

            

            On March 17, 2015, eight of our wholly-owned subsidiaries entered into a loan facility with Nordea to refinance the existing
                agreements with the bank and to add additional vessels. On March 19, 2015, after repaying in full all outstanding indebtedness with the bank, we drew down the amount of $93.1 million. The loan is repayable in 24 equal consecutive quarterly
                installments of approximately $1.9 million and a balloon of $48.4 million payable together with the last installment on March 19, 2021. The loan bears interest plus a margin of 2.1% of LIBOR.

            
              
                

            

            

            

            

            

            

            

            On March 26, 2015, three of our wholly-owned subsidiaries entered into a loan agreement with ABN AMRO Bank N.V. for a secured term
                loan facility of up to $53.0 million, to refinance part of the acquisition cost of the vessels New York, Myrto and Maia of which $50.2 million was drawn on March 30, 2015. The loan is repayable in 24 equal consecutive quarterly installments
                of about $1.0 million and a balloon of $26.3 million payable together with the last installment on March 30, 2021. The loan bears interest at LIBOR plus a margin of 2.0%.

            

            

            On April 29, 2015, our wholly-owned subsidiary Lelu Shipping Company Inc. ("Lelu") entered into a term loan agreement with Danish
                Ship Finance A/S for a loan facility of $30.0 million, drawn on April 30, 2015 to partly finance the acquisition cost of the Santa Barbara, which was delivered in January 2015. The loan is repayable in 28 equal consecutive quarterly
                installments of $0.5 million each and a balloon of $16.0 million payable together with the last installment on April 30, 2022. The loan bears interest at LIBOR plus a margin of 2.15%.

            

            

            On July 22, 2015, we entered into a term loan agreement with BNP Paribas for a loan of $165.0 million drawn on July 24, 2015. The
                loan is repayable in 20 consecutive quarterly installments, the first eight installments in an amount of $2.5 million, followed by four installments in an amount of $5.0 million; eight installments in an amount of $7.0 million; and a
                balloon installment of $69.0 million payable together with the last installment on July 24, 2020. The loan bears interest at LIBOR plus a margin of 2.35% per annum for the first two years; 2.3% per annum for the third year and 2.25% per
                annum until the final maturity of the loan.

            

            

            On September 30, 2015, our wholly-owned subsidiaries, Ujae Shipping Company Inc. ("Ujae") and Rairok Shipping Company Inc. ("Rairok")
                entered into a term loan agreement with ING Bank N.V. for a loan of up to $39.7 million, available in two advances to finance part of the acquisition cost of the New Orleans and the Medusa. Advance A of about $28.0 million was drawn on
                November 19, 2015 and is repayable in 28 consecutive quarterly installments of about $0.5 million and a balloon installment of about $15.0 million payable together with the last installment on November 19, 2022. Advance B of about $11.7
                million was drawn on October 6, 2015 and is repayable in 28 consecutive quarterly installments of about $0.3 million and a balloon installment of about $3.5 million payable together with the last installment on October 6, 2022. The loan
                bears interest at LIBOR plus a margin of 1.65%.

            

            

            On January 7, 2016, three of our wholly-owned subsidiaries entered into a secured loan agreement with the CEXIM Bank for a loan of up
                to $75.7 million in order to finance part of the construction cost of three vessels. On January 4, 2017, we drew down $57.24 million to finance part of the construction cost of San Francisco and Newport News, both delivered on January 4,
                2017. The balance of the committed loan amount, including the tranche for Hull DY6006 whose shipbuilding contract was cancelled on October 31, 2016, was cancelled. On February 6, 2017, we also entered into a Deed of Release with the CEXIM
                Bank in order to release the owner of Hull DY6006 of all of its obligations under the loan agreement as borrower. The loan is payable in 60 equal quarterly installments of $954,000 each, the last of which is payable by March 12, 2032, and
                bears interest at LIBOR plus a margin of 2.3%.

            

            

            On March 29, 2016, two of our wholly-owned subsidiaries entered into a term loan agreement with ABN AMRO Bank N.V. for a loan of
                $25.755 million, drawn on March 30, 2016, to finance the acquisition cost of the Selina and the Ismene. The loan is payable in eight consecutive quarterly installments of $855,000 each and a balloon installment of $18.9 million payable
                together with the last installment by June 30, 2019. The first repayment installment was repaid on September 30, 2017. The loan bears interest at LIBOR plus a margin of 3%.

            

            

            On May 10, 2016, one of our wholly-owned subsidiaries entered into a term loan agreement with DNB Bank ASA and the CEXIM Bank for a
                loan of $13.51 million, drawn on the same date, being the purchase price of the Maera. The loan is payable in seven equal consecutive quarterly installments of $19,775 each, four equal consecutive quarterly installments of $282,500 each and
                a balloon of about $12.2 million payable together with the last installment on January 4, 2019. The loan bears interest at LIBOR plus a margin of 3% per annum. Subsequently to December 31, 2017, and according to the terms of the loan
                agreement, we prepaid an additional amount of $289,177 which will be deducted from the balloon and which was reclassified as current in the consolidated balance sheet as at December 31, 2017.

            

            

            Under the secured term loans outstanding as of December 31, 2017, 46 vessels of the Company's fleet were mortgaged with first
                preferred or priority ship mortgages. Additional securities required by the banks include first priority assignment of all earnings, insurances, first assignment of time charter contracts with duration that exceeds a certain period, pledge
                over the shares of the borrowers, manager's undertaking and subordination and requisition compensation and either a corporate guarantee by Diana Shipping Inc. (the "Guarantor") or a guarantee by the ship owning companies (where applicable),
                financial covenants, as well as operating account assignments. The lenders may also require additional security in the future in the event the borrowers breach certain covenants under the loan agreements. The secured term loans generally
                include restrictions as to changes in management and ownership of the vessels, additional indebtedness, as well as minimum requirements regarding hull cover ratio and minimum liquidity per vessel owned by the borrowers, or the guarantor,
                maintained in the bank accounts of the borrowers, or the guarantor. Furthermore, the secured term loans contain cross default provisions and additionally the Company is not permitted to pay any dividends following the occurrence of an event
                of default.

            
              
                

            

            

            

            

            

            

            

            As at December 31, 2016, we were not in compliance with the minimum security cover requirement, under our $165.0 million loan
                facility with BNP Paribas. We estimated the shortfall to be $25.7 million and as such an amount of $19.7 million, representing the amount which would have to be paid to the bank, was reclassified as current in the consolidated balance sheet
                as at December 31, 2016. In addition, we received a waiver from the Commonwealth Bank, valid until December 31, 2016, for the non-compliance with the minimum required security cover, which was amended to a lower level than the one stated in
                the loan agreement. On January 13, 2017, the bank extended its consent for the use of the lower minimum required security cover until June 30, 2017. As of December 31, 2017 and the date of this report, we were in compliance with all of our
                loan covenants.

            

            

            Senior Notes due 2020

            

            

            On May 28, 2015, we issued $55.0 million aggregate principal amount of our 8.5% senior unsecured notes due 2020, or our Notes, in a
                registered public offering and on June 5, 2015, we issued an additional $8.25 million aggregate principal amount of the Notes, pursuant to the underwriters' option to purchase additional Notes. The Notes will mature on May 15, 2020, and
                effective May 15, 2017 may be redeemed in whole or in part at any time at a redemption price equal to 100% of the principal amount to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. The Notes bear
                interest at a rate of 8.500% per annum, payable quarterly on each February 15, May 15, August 15 and November 15, commencing on August 15, 2015. The Notes commenced trading on the NYSE on May 29, 2015 under the symbol "DSXN."

            

            

            
              
                

            

            

            

            5 BOARD OF DIRECTORS AND SENIOR MANAGEMENT

            5.1 Board of Directors

            Overview

            Set forth below are the names, ages and positions of our directors and executive officers. Our board of directors is elected annually
                on a staggered basis, and each director elected holds office for a three-year term and until his or her successor is elected and has qualified, except in the event of such director’s death, resignation, removal or the earlier termination of
                his or her term of office. Officers are appointed from time to time by our board of directors and hold office until a successor is appointed or their employment is terminated.

            

            

            	
                    Name of director

                  	
                    Position

                  
	
                    Simeon P. Palios

                  	
                    Class I Director, Chief Executive Officer and Chairman of the Board

                  
	
                    Anastasios C. Margaronis

                  	
                    Class I Director and President

                  
	
                    Andreas Michalopoulos

                  	
                    Class III Director, Chief Financial Officer and Treasurer

                  
	
                    Ioannis G. Zafirakis

                  	
                    Class I Director, Chief Strategy Officer and Secretary

                  
	
                    Semiramis Paliou

                  	
                    Class III Director and Chief Operating Officer

                  
	
                    William (Bill) Lawes

                  	
                    Class II Director

                  
	
                    Apostolos Kontoyannis

                  	
                    Class III Director

                  
	
                    Konstantinos Fotiadis

                  	
                    Class III Director

                  
	
                    Konstantinos Psaltis

                  	
                    Class II Director

                  
	
                    Kyriacos Riris

                  	
                    Class II Director

                  
	
                    Christos Glavanis

                  	
                    Class I Director

                  

            

            

            The term of our Class I directors expires in 2021, the term of our Class II directors expires in 2019, and the term of our Class III
                directors expires in 2020.

            

            

            The business address of each officer and director is the address of our principal executive offices, which are located at Pendelis
                16, 175 64 Palaio Faliro, Athens, Greece.

            5.2 Senior Management

            Overview

            The Senior Management of the Company consists of five individuals. The names of the members of the Senior Management as at the date
                of this Prospectus, and their respective positions, are presented in the table below:

            

            

            	
                    Name of officer

                  	
                    Position

                  
	
                    Simeon Palios

                  	
                    Chief Executive officer

                  
	
                    Anastasios Margaronis

                  	
                    President

                  
	
                    Ioannis Zafirakis

                  	
                    Chief Strategy Officer and Secretary

                  
	
                    Semiramis Paliou

                  	
                    Chief Operating Officer

                  
	
                    Andreas Michalopoulos

                  	
                    Chief Financial Officer and Treasurer

                  

            

            

            All members of the Senior Management are employed by Diana Shipping Services S.A.

            

            

            The Company's principal executive office, Pendelis 16, 175 64 Palaio Faliro, Athens, Greece, serves as the business address for the
                members of Senior Management in relation to their positions in the Company.

            

            

            Biographies of the members of the Senior Management:

            Set out below are brief biographies of the members of the Senior Management, including their relevant management expertise and
                experience, an indication of any significant principal activities performed  by them outside the Company and names of companies and partnerships of which a member of the Senior Management is or has been a member of the administrative,
                management or supervisory bodies or partner the previous five years (not including directorships and management positions in subsidiaries of the Company).

            Simeon P. Palios - Director, Chief Executive Officer
                and Chairman of the Board

            
              
                

            

            

            

            

            

            Simeon P. Palios has served as the Chief Executive Officer and Chairman of Diana Shipping Inc. since February 21, 2005 and as a
                Director since March 9, 1999 and has served as the Chief Executive Officer and Chairman of Diana Containerships Inc. since January 13, 2010. Mr. Palios also serves currently as the President of Diana Shipping Services S.A., our management
                company. Prior to November 12, 2004, Mr. Palios was the Managing Director of Diana Shipping Agencies S.A. Since 1972, when he formed Diana Shipping Agencies S.A., Mr. Palios has had overall responsibility for its activities. Mr. Palios has
                experience in the shipping industry since 1969 and expertise in technical and operational issues. He has served as an ensign in the Greek Navy for the inspection of passenger boats on behalf of Ministry of Merchant Marine and is qualified
                as a naval architect and marine engineer. Mr. Palios is a member of various leading classification societies worldwide and he is a member of the board of directors of the United Kingdom Freight Demurrage and Defense Association Limited. Mr.
                Palios has also served as President of the Association "Friends of Biomedical Research Foundation, Academy of Athens" since 2015. He holds a bachelor's degree in Marine Engineering from Durham University.

            Anastasios C. Margaronis - Director and President 

            Anastasios C. Margaronis has served as our President and as a Director since February 21, 2005 and has served as the Director and
                President of Diana Containerships Inc. since January 13, 2010. Mr. Margaronis is a Deputy President of Diana Shipping Services S.A., where he also serves as a Director and Secretary. Prior to February 21, 2005, Mr. Margaronis was employed
                by Diana Shipping Agencies S.A. and performed on our behalf the services he now performs as President. He joined Diana Shipping Agencies S.A. in 1979 and has been responsible for overseeing our vessels' insurance matters, including hull and
                machinery, protection and indemnity and war risks insurances. Mr. Margaronis has experience in the shipping industry, including in ship finance and insurance, since 1980. He is a member of the Greek National Committee of the American Bureau
                of Shipping and a member of the board of directors of the United Kingdom Mutual Steam Ship Assurance Association (Europe) Limited. He holds a bachelor's degree in Economics from the University of Warwick and a master's of science degree in
                Maritime Law from the Wales Institute of Science and Technology.

            Andreas Michalopoulos - Director, Chief Financial
                Officer and Treasurer

            Andreas Michalopoulos has served as the Company’s Chief Financial Officer and Treasurer since March 8, 2006 and also has served in
                these positions with Diana Containerships Inc. since January 13, 2010. Mr. Michalopoulos started his career in 1993 when he joined Merrill Lynch Private Banking in Paris. In 1995, he became an International Corporate Auditor with Nestle SA
                based in Vevey, Switzerland and moved in 1998 to the position of Trade Marketing and Merchandising Manager. From 2000 to 2002, he worked for McKinsey and Company in Paris, France, as an Associate Generalist Consultant before joining a major
                Greek Pharmaceutical Group with U.S. R&D activity as a Vice President of International Business Development and Member of the Executive Committee in 2002 where he remained until 2005. From 2005 to 2006, he joined Diana Shipping Agencies
                S.A. as a Project Manager. Mr. Michalopoulos graduated from Paris IX Dauphine University with Honors in 1993 obtaining an MSc in Economics and a master's degree in Management Sciences specialized in Finance. In 1995, he also obtained a
                master's degree in Business Administration from Imperial College, University of London. Mr. Andreas Michalopoulos is married to the youngest daughter of Mr. Simeon Palios, the Company’s Chief Executive Officer and Chairman.

            Ioannis G. Zafirakis - Director, Chief Strategy Officer
                and Secretary

            Ioannis G. Zafirakis has served as our Director, Chief Strategy Officer and Secretary since August 2018. Under his capacity as Chief
                Strategy Officer, Mr. Zafirakis is responsible for establishing and reviewing key strategic priorities and translating them into a comprehensive strategic plan, monitoring the execution of the plan, facilitating and driving key strategic
                initiatives through inception phase. He is also responsible for communicating the Company's strategy and overall goals internally and externally. In addition, Mr. Zafirakis is the Chief Strategy Officer of Diana Shipping Services S.A.,
                where he also serves as Director and Treasurer. Since February 2005, Mr. Zafirakis served for the same companies in various positions such as Chief Operating Officer, Executive Vice-President and Vice-President. From June 1997 to February
                2005, Mr. Zafirakis was employed by Diana Shipping Agencies S.A. where he held a number of positions in its finance and accounting department. He currently also serves as Director, Chief Strategy Officer and Secretary of Diana
                Containerships Inc. Mr. Zafirakis is a member of the Business Advisory Committee of the Shipping Programs of ALBA Graduate Business School at The American College of Greece. He holds a bachelor's degree in Business Studies from City
                University Business School in London and a master's degree in International Transport from the University of Wales in Cardiff.

            Semiramis Paliou - Director and Chief Operating Officer

            Semiramis Paliou has served as a Director of Diana Shipping Inc. since March 2015.  Mrs. Paliou has almost 20 years of experience in
                shipping operations, technical management and crewing.  Mrs. Paliou began her career at Lloyd’s Register of Shipping from 1996 to 1998 as a trainee ship surveyor.  She was then employed by Diana Shipping Agencies S.A. From 2007 to 2010 she
                was employed as a Director and President of Alpha Sigma Shipping Corp. From February 2010 to November 2015 she was the Head of the Operations, Technical and Crew department of Diana Shipping Services S.A. From November 2015 to October 2016
                she served as Vice President of the same company. From November 2016 to the end of July 2018, she served as Managing Director and Head of the Technical, Operations, Crew and Supply department of Unitized Ocean Transport Limited. As of
                August 2018, she is the Chief Operating Officer of Diana Shipping Inc. and Diana Shipping Services S.A. As of November 2018, she is the Chief Operating Officer of Diana Containerships Inc. Mrs. Paliou obtained her BSc in Mechanical
                Engineering from Imperial College, London and her MSc in Naval Architecture from University College, London.  She is the

            
              
                

            

            

            

            daughter of Simeon Palios, our Chief Executive Officer and Chairman, and is a member of the Greek committee of Det Norske Veritas -
                Germanischer Lloyd, a member of the Greek committee of Nippon Kaiji Kyokai and a member of the Greek committee of Bureau Veritas.

            5.3 Conflicts of interest

            Certain of our officers and directors are officers and directors of Diana Containerships Inc. and have fiduciary duties to manage our
                business in a manner beneficial to us and our shareholders, as well as a duty to the shareholders of Diana Containerships Inc. Consequently, these officers and directors may encounter situations in which their fiduciary obligations to Diana
                Containerships and to us are in conflict. The resolution of these conflicts may not always be in our best interest or that of our shareholders and could have a material adverse effect on our business, results of operations, cash flows and
                financial condition.

            

            

            5.4 Corporate Governance

            Pursuant to an exception for foreign private issuers, Diana, as a Marshall Islands company, is not required to comply with the
                corporate governance practices followed by U.S. companies under the NYSE listing standards. We believe that our established practices in the area of corporate governance are in line with the spirit of the NYSE standards and provide adequate
                protection to our shareholders. In fact, we have voluntarily adopted NYSE required practices, such as (a) having a majority of independent directors, (b) establishing audit, compensation and nominating committees and (c) adopting a Code of
                Ethics. The significant differences between our corporate governance practices and the NYSE standards are set forth below.

            Executive Sessions

            The NYSE requires that non-management directors meet regularly in executive sessions without management. The NYSE also requires that
                all independent directors meet in an executive session at least once a year. As permitted under Marshall Islands law and our bylaws, our non-management directors do not regularly hold executive sessions without management and we do not
                expect them to do so in the future.

            Shareholder Approval of Equity Compensation Plans

            The NYSE requires listed companies to obtain prior shareholder approval to adopt or materially revise any equity compensation plan.
                As permitted under Marshall Islands law and our amended and restated bylaws, we do not need prior shareholder approval to adopt or revise equity compensation plans, including our equity incentive plan.

            Corporate Governance Guidelines

            The NYSE requires companies to adopt and disclose corporate governance guidelines. The guidelines must address, among other things:
                director qualification standards, director responsibilities, director access to management and independent advisers, director compensation, director orientation and continuing education, management succession and an annual performance
                evaluation. We are not required to adopt such guidelines under Marshall Islands law and we have not adopted such guidelines.

            

            

            5.5 Compensation and Equity incentive plan

            Compensation

            Aggregate executive compensation (including amounts paid to Steamship Shipbroking Enterprises Inc. (or “Steamship”, formerly Diana Enterprises Inc.) pursuant to Brokerage Services Agreements) for 2017 was $3.7 million. Since June 1, 2010, Steamship, a related party company, has
                provided to us brokerage services. Under the Brokerage Services Agreements in effect during 2017, fees for 2017 amounted to $1.8 million. We consider fees under these agreements to be part of our executive compensation due to the
                affiliation with Steamship. We expect such fees to remain the same in 2018.

            

            

            Non-employee directors receive annual compensation in the amount of $52,000 plus reimbursement of out-of-pocket expenses. In
                addition, each non-executive serving as chairman or member of a committee receives additional annual compensation of $26,000 or $13,000, respectively, plus reimbursement of out-of-pocket expenses. Since August 2018, the annual compensation
                of the chairman of the audit and compensation committee increased to $40,000 and the annual compensation of the member of the audit committee increased to $26,000. For 2017, 2016 and 2015, fees and expenses of our non-executive directors amounted to $0.4 million, $0.4 million and $0.4 million, respectively.

            

            

            Since 2008 and until the date of this prospectus, our board of directors has awarded an aggregate amount of 11,675,241 shares of
                restricted common stock, of which 9,654,657 shares were awarded to senior management and 2,020,584 shares were awarded to non-employee directors. All restricted shares vest ratably over three years, except for 600,000 shares awarded in 2008
                which vested ratably over a period of six years until 2014 and 1,314,000 shares awarded in 2014 which will

            
              
                

            

            

            

            vest ratably over a period of six years until 2022. The restricted shares are subject to forfeiture until they become vested. Unless
                they forfeit their shares, grantees have the right to vote, to receive and retain all dividends paid and to exercise all other rights, powers and privileges of a holder of shares

            

            

            In 2017, compensation costs relating to the aggregate amount of restricted stock awards amounted to $8.2 million. We do not have a
                retirement plan for our officers or directors.

            Equity incentive plan

            In November 2014, our board of directors approved, and the Company adopted the 2014 Equity Incentive Plan, or the 2014 Plan, for
                5,000,000 common shares, of which, currently, 1,124,759 shares remain reserved for issuance.

            

            

            Under the 2014 Plan, the Company’s employees, officers and directors are entitled to receive options to acquire the Company’s common
                stock. The 2014 Plan is administered by the Compensation Committee of the Company’s Board of Directors or such other committee of the Board as may be designated by the Board. Under the terms of the 2014 Plan, the Company’s Board of
                Directors is able to grant a) incentive stock options, b) non-qualified stock options, c) stock appreciation rights, d) dividend equivalent rights, e) restricted stock, f) unrestricted stock, g) restricted stock units, and h) performance
                shares. No options, stock appreciation rights or restricted stock units can be exercisable prior to the first anniversary or subsequent to the tenth anniversary of the date on which such award was granted. Under the 2014 Plan, the
                Administrator may waive or modify the application of forfeiture of awards of restricted stock and performance shares in connection with cessation of service with the Company.

            5.6 Compensation committee

            We have established a Compensation Committee comprised of two members, which, as directed by its written charter, is responsible for
                setting the compensation of executive officers of the Company, reviewing the Company’s incentive and equity-based compensation plans, and reviewing and approving employment and severance agreements. The members of the Compensation Committee
                are Mr. Apostolos Kontoyannis (Chairman) and Mr. Konstantinos Psaltis (member).

            5.7 Nominating committee

            We have established a Nominating Committee comprised of two members, which, as directed by its written charter, is responsible for
                identifying, evaluating and making recommendations to the board of directors concerning individuals for selections as director nominees for the next annual meeting of stockholders or to otherwise fill board of director vacancies. The
                members of the Nominating Committee are Mr. Konstantinos Psaltis (Chairman) and Mr. Kyriacos Riris (member).

            5.8 Audit committee

            We have established an Audit Committee, comprised of two board members, which is responsible for reviewing our accounting controls,
                recommending to the board of directors the engagement of our independent auditors, and pre-approving audit and audit-related services and fees. Each member has been determined by our board of directors to be “independent” under the rules of
                the NYSE and the rules and regulations of the SEC. As directed by its written charter, the Audit Committee is responsible for appointing, and overseeing the work of the independent auditors, including reviewing and approving their
                engagement letter and all fees paid to our auditors, reviewing the adequacy and effectiveness of the Company’s accounting and internal control procedures and reading and discussing with management and the independent auditors the annual
                audited financial statements. The members of the Audit Committee are Mr. William Lawes (Chairman and financial expert) and Mr. Apostolos Kontoyannis (member and financial expert).

            5.9 Executive committee

            We have established an Executive Committee comprised of the five executive directors, Mr. Simeon Palios (Chairman), Mr. Anastasios
                Margaronis (member), Mr. Ioannis Zafirakis (member), Mr. Andreas Michalopoulos (Member) and Mrs. Semiramis Paliou (Member). The Executive Committee has, to the extent permitted by law, the powers of the Board of Directors in the management
                of the business and affairs of the Company.

            We also maintain directors’ and officers’ insurance, pursuant to which we provide insurance coverage against certain liabilities to
                which our directors and officers may be subject, including liability incurred under U.S. securities law. Our executive directors have employment agreements, which, if terminated without cause, entitle them to continue receiving their basic
                salary through the date of the agreement’s expiration.

            5.10 Employees

            We crew our vessels primarily with Greek officers and Filipino officers and seamen and may also employ seamen from Poland, Rumania
                and Ukraine. DSS and DWM are responsible for identifying the appropriate officers and seamen mainly through crewing agencies. The crewing agencies handle each seaman’s training, travel and payroll. The management companies ensure that all
                our seamen have the qualifications and licenses required to comply with international regulations and shipping conventions. Additionally, our seafaring employees perform most commissioning work and supervise work at shipyards and drydock
                facilities. We typically man our vessels with more crew members than are required by the country of the vessel’s flag

            
              
                

            

            

            

            in order to allow for the performance of routine maintenance duties. The following table presents the number of shoreside personnel
                employed by DSS and the number of seafaring personnel employed by our vessel-owning subsidiaries as at December 31, 2017, 2016 and 2015.

            

            

            

            
              
                

            

            

            

            6 FINANCIAL INFORMATION

            6.1 Introduction

            The tables set out in this section present selected financial information derived from the Group's audited consolidated annual
                financial statements for the years ended 31 December 2017 and 2016 (both available on the Company’s web page).

            

            

            The consolidated financial statements of Diana Shipping Inc. appearing in Diana Shipping Inc.'s Annual Report for the year ended
                December 31, 2017 and the effectiveness of Diana Shipping Inc.'s internal control over financial reporting as of December 31, 2017 have been audited by Ernst & Young (Hellas) Certified Auditors-Accountants S.A., independent registered
                public accounting firm, as set forth in their reports thereon, included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such reports given on the
                authority of such firm as experts in accounting and auditing. Ernst & Young (Hellas) Certified Auditors-Accountants S.A. is located at Chimarras 8B, 15125, Maroussi, Athens, Greece and is registered as a corporate body with the public
                register for company auditors-accountants kept with the Body of Certified-Auditors-Accountants ("SOEL"), Greece with registration number 107. No auditor have resigned, been removed or not been re-appointed during the period covered by the
                historical financial information.

            6.2 Audit report of historical annual financial information

            

            

            REPORT OF INDEPENDENT

            REGISTERED PUBLIC ACCOUNTING FIRM

            To the Stockholders and the Board of Directors of Diana Shipping Inc.

            Opinion on Internal Control over Financial Reporting

            We have audited Diana Shipping Inc.’s internal control over financial reporting as of December 31, 2017, based on criteria
                established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Diana Shipping Inc. (the Company) maintained, in all
                material respects, effective internal control over financial reporting as of December 31, 2017, based on the COSO criteria.

            

            

            We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the
                consolidated balance sheets of Diana Shipping Inc. as of December 31, 2017 and 2016, and the related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for each of the three years in the period
                ended December 31, 2017, and the related notes and our report dated March 16, 2018, expressed an unqualified opinion thereon.

            Basis for Opinion

            The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of
                the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal
                control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
                applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

            

            

            We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to
                obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

            

            

            Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
                weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit
                provides a reasonable basis for our opinion.

            Definition and Limitations on Internal Control over Financial Reporting

            A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability
                of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and
                procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are
                recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of
                management and directors of

            
              
                

            

            

            

            the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
                disposition of the company’s assets that could have a material effect on the financial statements.

            

            

            Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
                projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

            

            

            /s/ Ernst & Young (Hellas) Certified Auditors-Accountants S.A.

            Athens, Greece

            March 16, 2018

            

            

            6.3 Financial Information

            The following tables set forth our consolidated financial data as of and for the years ended December 31, 2017 and 2016, and the
                three months nine months ended September 30, 2018 and 2017. The consolidated financial data as of and for the years ended December 31, 2017 and 2016 are derived from our audited consolidated financial statements and notes thereto which have
                been prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP. The following data should be read in conjunction with the consolidated financial statements, related notes and other financial information
                included in the 2017 annual report.

            

            

            
              
                

            

            

            

            6.4 Consolidated statements of operations and comprehensive loss

            The tables below set out our consolidated statements of operations and comprehensive loss for the years ended 2017, 2016 and 2015 and
                for the three months and nine months ended September 30, 2018 and 2017 (unaudited).

            

            

            

            

            

            

            

            
              
                

            

            

            

            

            

            

            

            

            

            

            

            

            

            

            

            

            

            

            

            Interim (unaudited)

            

            

            

            

            

            

            

            

            

            
              
                

            

            

            

            

            
              

              

              6.5 Consolidated statements of financial position

              The tables below set out our consolidated statements of financial position as of the years ended 2017 and 2016 and the condensed unaudited
                consolidated statement of financial position for the nine months ended September 30, 2018.

              

              

              Annual

              

              

              

              

              

              

              

              
                
                  

              

              

              

              Interim (unaudited)

              

              

              

              

              

              

              

              
                
                  

              

              

              

              6.6 Consolidated statements of cash flow

              The tables below set out our audited consolidated statements of cash flows for the years ended December 31, 2017, 2016 and 2015 and
                  our interim unaudited cash flow data for the three months and nine months ended September 30, 2018 and 2017.

              

              

              Annual

              

              

              

              
                
                  

              

              

              

              

              

              

               

              

              Interim (unaudited)

              

              

              

              
                
                  

              

              

              

              

              

              

              

              

              

              

              

              

              

              

              

              6.7 Consolidated statements of changes in equity

              The table below sets out our selected data from the Group’s audited consolidated statements of changes in equity for the years
                  ended 2017, 2016 and 2015

              

              

              

              6.8 Holders and share capital

              The following table shows the 20 largest public shareholders as per 2 October 2018. Countries of incorporation among the
                  shareholders include among other United States, United Kingdom and Greece.

              

              

              

              Source: Bloomberg

              
                
                  

              

              

              

              

              

              

              

              Major shareholders

              The following table sets forth information regarding ownership of our common stock of which we are aware as of November 20, 2018,
                  for (i) beneficial owners of five percent or more of our common stock and (ii) our officers and directors, individually and as a group. All of our shareholders, including the shareholders listed in this table, are entitled to one vote for
                  each share of common stock held.

              	
                      Title of Class

                    	
                      Identity of Person or Group

                    	
                      Number of

                      Shares Owned

                    	
                      Percent of Class*

                    	 
	
                      Common Stock, par value $0.01

                    	
                      Simeon Palios (1)

                    	
                      24,964,707

                    	
                       

                    	
                      23.1

                    
	
                       

                    	
                       

                    	
                      Franklin Resources Inc. (2)

                    	
                      12,833,190

                    	
                       

                    	
                      11.9

                    
	
                       

                    	
                       

                    	
                      Kopernik Global Investors, LLC (3)

                    	
                       5,573,381

                    	
                       

                    	
                      5.2

                    
	
                       

                    	
                       

                    	
                      All officers and directors as a group (4)

                    	
                      29,658,208

                    	
                       

                    	
                      27.5

                    

              
                

                

              

              
                * Based on 107,931,017 common shares outstanding as of November 20, 2018.

              

              
                

                

              

              	
                      (1)

                    	
                      Mr. Simeon Palios indirectly may be deemed to beneficially own 9,524,360 shares beneficially owned by Ironwood Trading
                          Corp. and 15,440,347 shares beneficially owned by Steamship Shipbroking Enterprises Inc. (formerly Diana Enterprises Inc.), including 4,762,180 shares beneficially owned through Corozal Compania Naviera S.A., as the result of his
                          ability to control the vote and disposition of such entities, for an aggregate of 24,964,707 shares. As of December 31, 2015, 2016 and 2017, Mr. Simeon Palios owned indirectly 20.6%, 22.2% and 22.5%, respectively, of our
                          outstanding common stock.

                    
	
                      (2)

                    	
                      This information is derived from a Schedule 13G/A filed with the SEC on February 6, 2018.

                    
	
                      (3)

                    	
                      This information is derived from a Schedule 13G/A filed with the SEC on February 9, 2018.

                    
	
                      (4)

                    	
                      Mr. Simeon Palios is our only director or officer that beneficially owns 5% or more of our outstanding common stock. Mr.
                          Anastasios Margaronis, our President and a member of our board of directors is indirect shareholder through ownership of stock held among others in Corozal Compania Naviera S.A., and Ironwood Trading Corp. Mr. Margaronis does not
                          have dispositive or voting power with regard to shares held by Corozal Compania Naviera S.A. and Ironwood Trading Corp. and, accordingly, is not considered to be beneficial owner of our common shares held through Corozal Compania
                          Naviera S.A. and Ironwood Trading Corp. Mr. Anastasios Margaronis also owns indirectly 3.2% of our outstanding common stock. All other officers and directors each owns less than 1% of our outstanding common stock. In addition,
                          Steamship Shipbroking Enterprises Inc. (formerly Diana Enterprises Inc.) owns indirectly 100,390, or 3.9% of the outstanding Series B Preferred Shares and Mr. Anastasios Margaronis owns indirectly 28,025, or 1.1% of the
                          outstanding Series B Preferred Shares. All officers and directors as a group own 133,575, or 5.1% of our outstanding Series B Preferred Shares.

                    

              

              

              Share capital

              Under our amended and restated articles of incorporation, as of the date of this prospectus, our authorized capital stock consists
                  of 200,000,000 shares of common stock, par value $0.01 per share, of which 107,931,017 shares are issued and outstanding, and 25,000,000 shares of preferred stock, par value $0.01 per share, of which (i) 1,000,000 shares are designated
                  Series A Participating Preferred Stock, none of which is issued and outstanding, and (ii) 5,000,000 shares are designated Series B Preferred Stock, 2,600,000 shares of which are issued and outstanding.  All of our shares of stock are in
                  registered form.

              Common Stock

              Each outstanding share of common stock entitles the holder to one vote on all matters submitted to a vote of stockholders. Subject
                  to preferences that may be applicable to any outstanding shares of preferred stock, holders of shares of common stock are entitled to receive ratably all dividends, if any, declared by our board of directors out of funds legally available
                  for dividends. Upon our dissolution or liquidation or the sale of all or substantially all of our assets, after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation
                  preferences, if any, the holders of our common stock will be entitled to receive pro rata our remaining assets available for distribution. Holders of common stock do not have conversion, redemption or preemptive rights to subscribe to any
                  of our securities. The rights, preferences and privileges of holders of common stock are subject to the rights of the holders of our preferred stock.

              Preferred Stock

              Our board of directors is authorized to provide for the issuance of preferred stock in one or more series with designations as may
                  be stated in the resolution or resolutions providing for the issue of such preferred stock.  At the time that any series of our preferred stock is authorized, our board of directors will fix the dividend rights, any conversion rights, any
                  voting rights, redemption provisions, liquidation preferences and any other rights, preferences, privileges and restrictions of that series, as well as the number of shares constituting that series and their designation.  Our board of
                  directors could, without shareholder approval, cause us to issue preferred stock which has voting, conversion and other rights and preferences that could adversely affect the voting power and other rights of holders of our common stock,
                  Series A Participating Preferred Stock and Series B Preferred Stock, or make it more difficult to effect a change in control.  In addition, preferred stock could be used to dilute the share ownership of persons seeking to obtain control
                  of us and thereby hinder a possible takeover attempt which, if our shareholders were offered a premium over the market value of their shares, might be viewed as being beneficial to our

              
                
                  

              

              

              

              shareholders. The material terms of any series of preferred stock that we offer through a prospectus supplement will be described
                  in that prospectus supplement.

              Series B Cumulative Redeemable Perpetual Preferred Stock

              Our Series B Preferred Stock is senior in rank to our Series A Participating Preferred Stock.  Holders of our Series B Preferred
                  Stock have no voting rights other than the ability, subject to certain exceptions, to elect one director if dividends for six quarterly dividend periods (whether or not consecutive) are in arrears and certain other limited protective
                  voting rights.  Holders of our Series B Preferred Stock rank prior to the holders of our common stock with respect to dividends, distributions and payments upon liquidation.  Dividends on our Series B Preferred Stock are cumulative from
                  the date of original issue and are payable on the 15th day of January, April, July and October of each year at the dividend rate of 8.875% per annum, or $2.21875 per annum per share. At any time on or after February 14, 2019, we may
                  redeem, in whole or in part, the Series B Preferred Stock at a redemption price of $25.00 per share plus an amount equal to all accumulated and unpaid dividends thereon to the date of redemption, whether or not declared.

              6.9 Capital expenditures

              We make capital expenditures from time to time in connection with vessel acquisitions and constructions, which we finance among
                  others with cash from operations, debt under loan facilities at terms acceptable to us, with funds from equity issuances and senior unsecured notes. Our main uses of funds have been capital expenditures for the acquisition and
                  construction of new vessels, expenditures incurred in connection with ensuring that our vessels comply with international and regulatory standards, repayments of bank loans and payment of our preferred dividends. Since the date of the
                  last published financial statements of December 31, 2017, we do not have capital expenditures for vessel acquisitions or constructions, but we incur capital expenditures when our vessels undergo surveys and to comply with new regulatory
                  standards. This process of recertification or vessel improvements may require us to reposition these vessels from a discharging port to shipyard facilities, which will reduce our operating days during the period. The loss of earnings
                  associated with the decrease in operating days together with the capital needs for repairs and upgrades result in increased cash flow needs. We expect to cover such capital expenditures and cash flow needs with cash from operations and
                  cash on hand. Since the date of the last published financial statements of December 31, 2017 and as of the date of this prospectus, the Company has not made any principal investments or any firm commitments on future investments.

              6.10 Significant changes, trends and other factors affecting results

              Since the date of the Company’s last published audited financial statements of December 31, 2017, the following material events
                  have taken place:

              
                
                  	

                        	(i)	
                          The Company has received the outstanding balance of a loan receivable from a related party amounting to $82.7 million as of December 31, 2017, and
                              as such the loan receivable has been reduced to zero.

                        

                

              

              
                
                  	

                        	(ii)	
                          On July 13, 2018, the Company entered into a term loan facility with BNP Paribas for an amount of up to $75.0 million to refinance an existing loan
                              facility with the bank having an outstanding balance of $130.0 million at the date of refinancing. The loan of $130.0 million was repaid in full on July 16, 2018 by using the $75.0 million loan proceeds and cash on hand.

                        

                

              

              
                
                  	

                        	(iii)	
                          On October 29, 2018, the Company redeemed in full its senior notes amounting to $63.25 million, which until the date of redemption were trading on
                              the NYSE under the symbol "DSXN".

                        

                

              

              
                
                  	

                        	(iv)	
                          On November 5, 2018, the Company through a wholly owned subsidiary entered into a Memorandum of Agreement to sell the vessel “Triton” to an
                              unaffiliated third party, for a sale price of $7.35 million before commissions.

                        

                

              

              
                
                  	

                        	(v)	
                          On November 9, 2018 the Company through a wholly owned subsidiary entered into a Memorandum of Agreement to sell the vessel “Alcyon” to an
                              unaffiliated third party, for a sale price of $7.45 million before commissions.

                        

                

              

              
                
                  	

                        	(vi)	
                          On November 21, 2018 the Company announced the commencement of a tender offer to purchase up to 4,166,666 shares, or about 3.86%, of its outstanding
                              common stock using funds available from cash and cash equivalents at a price of US$3.60 per share. The tender offer will expire at the end of the day, 5:00 P.M., Eastern Time, on December 20, 2018, unless extended or
                              withdrawn.

                        

                

              

              Since the date of the Company’s last published audited financial statements of December
                  31, 2017, and as of the date of this prospectus there has been no material adverse change in the prospects of the issuer and there has been no significant change in the financial or trading position of the Group other than as disclosed in
                  this prospectus that would have a material extent relevant to the evaluation of the issuer’s solvency.

              

              

              
                
                  

              

              

              

              

              

              6.11 Legal and arbitration proceedings

              The Company is not aware of any ongoing, pending or threatened governmental, legal or arbitration proceedings during the previous
                  12 months that may have or have had in the recent past a significant effect on the Company and/or the Group’s financial position or profitability.

              6.12 Material contracts

              There are no material contracts that are entered into outside the ordinary course of the Issuer’s business, which could result in
                  any group member being under an obligation or entitlement that is material to the Issuer’s ability to meet its obligation to security holders in respect of the securities being issued.

              6.13 Documents on display

              The following documents (or copies thereof) may be inspected for twelve months from the date of this Registration Document at the
                  Company’s corporate office16 Pendelis Str., 175 64 Palaio Faliro, Athens, Greece, during normal business hours from Monday through Friday each week (except public holidays):

              

              

              
                
                  	

                        	a)	
                          the Articles of Incorporation and Bylaws of the Company;

                        

                

              

              
                
                  	

                        	b)	
                          all reports, letters, and other documents, historical financial information, valuations and statements prepared by any expert at the Company’s
                              request any part of which is included or referred to in the Registration Document;

                        

                

              

              
                
                  	

                        	c)	
                          the historical financial information of the Company and its subsidiary undertakings for each of the two financial years preceding the publication of
                              the Registration Document.

                        

                

              

              

              

              
                
                  

              

              

              

              7 LEAD MANAGERS’ DISCLAIMER

              

              

              Fearnley Securities AS and Nordea Bank Abp, filial i Norge (the Lead Managers) has assisted the Company in preparing this
                  Registration Document. The Lead Managers has not verified the information contained herein. Accordingly, no representation, warranty or undertaking, express or implied, is made and the Lead Manager expressively disclaim any legal or
                  financial liability as to the accuracy or completeness of the information contained in this Registration Document or any other information supplied in connection with bonds issued by Diana Shipping Inc. or their distribution. The
                  statements made in this paragraph are without prejudice to the responsibility of the Company. Each person receiving this Registration Document acknowledges that such person has not relied on the Lead Managers nor any person affiliated
                  with it in connection with its investigation of the accuracy of such information or its investment decision.

              

              

              Confidentiality rules and internal rules restricting the exchange of information between different parts of the Lead Managers may
                  prevent employees of the Lead Managers who are preparing this Registration Document from utilizing or being aware of information available to the Lead Managers and/ or any of their affiliated companies and which may be relevant to the
                  recipient’s decisions

              

              

              

              

              3 December 2018 Oslo, Norway

              

              

              Fearnley Securities AS and Nordea Bank Abp, filial i Norge

              

              

              
                
                  

              

              

              

              8 DEFINITIONS AND GLOSSARY

              
                
                  	·	
                          Bulk Carriers - Vessels which are specially designed and built to carry large volumes of cargo in bulk cargo form.

                        

                

              

              
                
                  	·	
                          Bunkers - Heavy fuel oil used to power a vessel's engines.

                        

                

              

              
                
                  	·	
                          Capesize - A dry bulk carrier having a carrying capacity of 110,000 dwt to 199,999 dwt.

                        

                

              

              
                
                  	·	
                          Charter - The hire of a vessel for a specified period of time to carry a cargo for a fixed fee from a loading port to a discharging port. The
                              contract for a charter is called a charterparty.

                        

                

              

              
                
                  	·	
                          Charterer - The individual or company hiring a vessel.

                        

                

              

              
                
                  	·	
                          Charter Hire Rate - A sum of money paid to the vessel owner by a charterer under a time charterparty for the use of a vessel.

                        

                

              

              
                
                  	·	
                          Classification Society - An independent organization which certifies that a vessel has been built and maintained in accordance with the rules of
                              such organization and complies with the applicable rules and regulations of the country of such vessel and the international conventions of which that country is a member.

                        

                

              

              
                
                  	·	
                          Deadweight Ton-"dwt" - A unit of a vessel's capacity for cargo, fuel oil, stores and crew, measured in metric tons of 1,000 kilograms. A vessel's
                              DWT or total deadweight is the total weight the vessel can carry when loaded to a particular load line.

                        

                

              

              
                
                  	·	
                          Draft - Vertical distance between the waterline and the bottom of the vessel's keel.

                        

                

              

              
                
                  	·	
                          Dry Bulk - Non-liquid cargoes of commodities shipped in an unpackaged state.

                        

                

              

              
                
                  	·	
                          Drydocking - The removal of a vessel from the water for inspection and/or repair of submerged parts.

                        

                

              

              
                
                  	·	
                          Hull - The shell or body of a vessel.

                        

                

              

              
                
                  	·	
                          International Maritime Organization-"IMO" - A United Nations agency that issues international trade standards for shipping.

                        

                

              

              
                
                  	·	
                          Metric Ton - A metric ton of 1,000 kilograms.

                        

                

              

              
                
                  	·	
                          Newbuilding - A newly constructed vessel.

                        

                

              

              
                
                  	·	
                          Panamax - A dry bulk carrier of approximately 60,000 to 79,999 dwt of maximum length, depth and draft capable of passing fully loaded through the
                              Panama Canal.

                        

                

              

              
                
                  	·	
                          Post-Panamax - A dry bulk carrier having a carrying capacity of 80,000 dwt to 109,999 dwt.

                        

                

              

              
                
                  	·	
                          Protection and Indemnity Insurance - Insurance obtained through a mutual association formed by shipowners to provide liability insurance protection
                              from large financial loss to one member through contributions towards that loss by all members.

                        

                

              

              
                
                  	·	
                          Short-Term Time Charter - A time charter which lasts less than approximately 12 months.

                        

                

              

              
                
                  	·	
                          Sister Ships - Vessels of the same class and specification which were built by the same shipyard.

                        

                

              

              
                
                  	·	
                          Time Charter - Contract for hire of a ship. A charter under which the ship-owner is paid charter hire rate on a per day basis for a certain period
                              of time, the shipowner being responsible for providing the crew and paying operating costs while the charterer is responsible for paying the voyage costs. Any delays at port or during the voyages are the responsibility of the
                              charterer, save for certain specific exceptions such as loss of time arising from vessel breakdown and routine maintenance.

                        

                

              

              
                
                  	·	
                          Ton - A metric ton of 1,000 kilograms.

                        

                

              

              

              

              
                
                  

              

              

              

              APPENDIX A – ARTICLES OF INCORPORATION

              

              

            

            

            

            

            

            

            

            

            

            

            

            

            

            

            

              

              

              

              

              

              

              

              

              
                
                  

              

              

                

                

                

                

                

                  

                  

                  
                    

                    
                      
                        

                    

                    

                    

                    

                    

                    

                    

                    

                    

                      

                      

                      

                      

                      

                      

                      

                      

                      
                        
                          

                      

                      

                      

                      

                      

                      

                    

                  

                  

                    

                    

                    

                    

                    

                    

                    

                    

                    

                      

                      

                      
                        
                          

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      

                    

                    

                  

                  

                    

                    

                    

                    

                    

                    

                    

                    

                    

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      

                    

                    

                  

                  
                    
                      

                  

                  

                    

                    

                    

                    

                    

                    

                    

                    

                      

                      

                      

                      

                      

                      

                      

                      

                      
                        
                          

                      

                      

                      

                      

                      

                      

                    

                    

                  

                  
                    

                    

                    

                    

                    

                    

                    

                    

                    

                      

                      

                      

                      

                      

                      

                      

                      

                      
                        
                          

                      

                      

                      

                      

                      

                      

                    

                    

                  

                  

                    

                    

                    

                    
                      
                        

                    

                    

                    

                    

                    

                    

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      
                        
                          

                      

                      

                      

                      

                      

                      

                      APPENDIX B – FINANCIAL STATEMENTS

                      

                      

                      The full 2017 annual report is set out on the following pages while the Company’s
                          previous annual and quarterly report can be found on: http://www.dianashippinginc.com/investors/annual-and-quarterly-reports/

                      

                      

                      2017 Annual report direct link:

                      http://www.dianashippinginc.com/userfiles/bc94f6aa-05ac-4df6-ae9a-a307010b2cf7/DSI_Annual_Report_2017.pdf

                      2016 Annual report direct link:

                      http://www.dianashippinginc.com/userfiles/bc94f6aa-05ac-4df6-ae9a-a307010b2cf7/DSI_Annual_Report_2016.pdf

                      2015 Annual report direct link:

                      http://www.dianashippinginc.com/userfiles/bc94f6aa-05ac-4df6-ae9a-a307010b2cf7/DSI_Annual_Report_2015.pdf

                      

                      

                      2018 3rd quarter report:

                      http://www.dianashippinginc.com/userfiles/Reports/quarterly/DSX_earnings_release_300918.pdf

                      2018 2nd quarter report:

                      http://www.dianashippinginc.com/userfiles/Reports/quarterly/DSX_Earnings_Release_300618.pdf

                      2018 1st quarter report:

                      http://www.dianashippinginc.com/userfiles/Reports/quarterly/DSI_Earnings_Release_310318.pdf

                      

                      

                      

                      

                    

                    

                  

                  

                    

                    

                    

                    

                    

                    

                    

                    

                    

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      

                    

                    

                  

                  
                    
                      

                  

                  

                    

                    

                    
                      

                      

                      2017 Annual report

                      

                      

                      DIANA SHIPPING INC.

                      

                      

                      INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                      

                      

                      	
                               

                            	
                               

                            	
                              Page

                            
	
                               

                            	
                               

                            	
                               

                            
	
                              Report of Independent Registered Public Accounting Firm          

                            	
                               

                            	
                              F-2

                            
	
                               

                            	
                               

                            	
                               

                            
	
                              Report of Independent Registered Public Accounting Firm          

                            	
                               

                            	
                              F-3

                            
	
                               

                            	
                               

                            	
                               

                            
	
                              Consolidated Balance Sheets as of December 31, 2017 and 2016          

                            	
                               

                            	
                              F-4

                            
	
                               

                            	
                               

                            	
                               

                            
	
                              Consolidated Statements of Operations for the years ended December 31, 2017, 2016 and 2015

                            	
                               

                            	
                              F-5

                            
	
                               

                            	
                               

                            	
                               

                            
	
                              Consolidated Statements of Comprehensive Loss for the years ended December 31, 2017, 2016 and 2015

                            	
                               

                            	
                              F-5

                            
	
                               

                            	
                               

                            	
                               

                            
	
                              Consolidated Statements of Stockholders' Equity for the years ended December 31, 2017, 2016 and 2015

                            	
                               

                            	
                              F-6

                            
	
                               

                            	
                               

                            	
                               

                            
	
                              Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 2015

                            	
                               

                            	
                              F-7

                            
	
                               

                            	
                               

                            	
                               

                            
	
                              Notes to Consolidated Financial Statements          

                            	
                               

                            	
                              F-8

                            
	
                               

                            	
                               

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            

                      

                      

                      
                        
                          

                      

                      
                      

                      

                      Report of Independent Registered Public Accounting Firm

                      

                      

                      To the Stockholders and the Board of Directors of Diana Shipping Inc.

                      

                      

                      Opinion on the Financial Statements

                      We have audited the accompanying consolidated balance sheets of Diana Shipping Inc. (the Company) as
                          of December 31, 2017 and 2016, the related consolidated statements of operations, comprehensive loss, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2017, and the related notes
                          (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2017 and
                          2016, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.

                      We also have audited, in accordance with the standards of the Public Company Accounting Oversight
                          Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring
                          Organizations of the Treadway Commission (2013 framework) and our report dated March 16, 2018, expressed an unqualified opinion thereon.

                      Basis for Opinion

                      These financial statements are the responsibility of the Company's management. Our responsibility is
                          to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
                          federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

                      We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we
                          plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
                          material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and
                          disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
                          We believe that our audits provide a reasonable basis for our opinion.

                      /s/ Ernst & Young (Hellas) Certified Auditors-Accountants S.A.

                      We have served as the Company's auditor since 2004.

                      Athens, Greece

                          March 16, 2018

                      

                      

                      
                        F-2

                        
                          

                      

                      

                      

                      

                      

                      Report of Independent Registered Public Accounting Firm

                      

                      

                      To the Stockholders and the Board of Directors of Diana Shipping Inc.

                      Opinion on Internal Control over Financial Reporting

                      We have audited Diana Shipping Inc.'s internal control over financial reporting as of December 31,
                          2017, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Diana Shipping Inc.
                          (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on the COSO criteria.

                      We also have audited, in accordance with the standards of the Public Company Accounting Oversight
                          Board (United States) (PCAOB), the consolidated balance sheets of Diana Shipping Inc. as of December 31, 2017 and 2016, and the related consolidated statements of operations, comprehensive loss, stockholders' equity and cash flows
                          for each of the three years in the period ended December 31, 2017, and the related notes and our report dated March 16, 2018, expressed an unqualified opinion thereon.

                      Basis for Opinion

                      The Company's management is responsible for maintaining effective internal control over financial
                          reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to
                          express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in
                          accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

                      We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we
                          plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

                      Our audit included obtaining an understanding of internal control over financial reporting, assessing
                          the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the
                          circumstances. We believe that our audit provides a reasonable basis for our opinion.

                      Definition and Limitations on Internal Control over Financial Reporting

                      A company's internal control over financial reporting is a process designed to provide reasonable
                          assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial
                          reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide
                          reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
                          being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
                          company's assets that could have a material effect on the financial statements.

                      Because of its inherent limitations, internal control over financial reporting may not prevent or
                          detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the
                          policies or procedures may deteriorate.

                      

                      

                      /s/ Ernst & Young (Hellas) Certified Auditors-Accountants S.A.

                      Athens, Greece

                          March 16, 2018

                      

                      

                      
                        F-3

                        
                          

                      

                      

                      

                      

                      

                      	
                              DIANA SHIPPING INC.

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              CONSOLIDATED BALANCE SHEETS

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              December 31, 2017 and 2016

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              (Expressed in thousands of U.S. Dollars – except for share and per share data)

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                               

                            	
                               

                            	
                              2017

                            	
                               

                            	
                               

                            	
                              2016

                            	
                               

                            
	
                              ASSETS

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              CURRENT ASSETS:

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Cash and cash equivalents  (Note 2(e))

                            	
                               

                            	
                              $

                            	
                              40,227

                            	
                               

                            	
                               

                            	
                              $

                            	
                              98,142

                            	
                               

                            
	
                              Accounts receivable, trade (Note 2(f))

                            	
                               

                            	
                               

                            	
                              4,937

                            	
                               

                            	
                               

                            	
                               

                            	
                              5,903

                            	
                               

                            
	
                              Due from related parties (Notes  2(g) and 4(b))

                            	
                               

                            	
                               

                            	
                              82,660

                            	
                               

                            	
                               

                            	
                               

                            	
                              102

                            	
                               

                            
	
                              Inventories (Note 2(h))

                            	
                               

                            	
                               

                            	
                              5,770

                            	
                               

                            	
                               

                            	
                               

                            	
                              5,860

                            	
                               

                            
	
                              Prepaid expenses and other assets

                            	
                               

                            	
                               

                            	
                              5,167

                            	
                               

                            	
                               

                            	
                               

                            	
                              5,309

                            	
                               

                            
	
                              Total current assets

                            	
                               

                            	
                               

                            	
                              138,761

                            	
                               

                            	
                               

                            	
                               

                            	
                              115,316

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              FIXED ASSETS:

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Advances for vessels under construction and acquisitions and other vessel costs

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              46,863

                            	
                               

                            
	
                              Vessels net book value (Note 5)

                            	
                               

                            	
                               

                            	
                              1,053,578

                            	
                               

                            	
                               

                            	
                               

                            	
                              1,403,912

                            	
                               

                            
	
                              Property and equipment, net (Note 6)

                            	
                               

                            	
                               

                            	
                              22,650

                            	
                               

                            	
                               

                            	
                               

                            	
                              23,114

                            	
                               

                            
	
                              Total fixed assets

                            	
                               

                            	
                               

                            	
                              1,076,228

                            	
                               

                            	
                               

                            	
                               

                            	
                              1,473,889

                            	
                               

                            
	
                              OTHER NON-CURRENT ASSETS:

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Restricted cash (Notes 2(e) and 7)

                            	
                               

                            	
                               

                            	
                              25,582

                            	
                               

                            	
                               

                            	
                               

                            	
                              23,000

                            	
                               

                            
	
                              Due from related parties, non-current (Notes 2(g) and 4(b))

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              45,417

                            	
                               

                            
	
                              Investments in related parties (Notes 2(v) and 3)

                            	
                               

                            	
                               

                            	
                              3,249

                            	
                               

                            	
                               

                            	
                               

                            	
                              6,014

                            	
                               

                            
	
                              Deferred charges, net (Notes 2(m), 2(n) and 5)

                            	
                               

                            	
                               

                            	
                              2,902

                            	
                               

                            	
                               

                            	
                               

                            	
                              5,027

                            	
                               

                            
	
                              Total assets

                            	
                               

                            	
                              $

                            	
                              1,246,722

                            	
                               

                            	
                               

                            	
                              $

                            	
                              1,668,663

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              LIABILITIES AND
                                    STOCKHOLDERS' EQUITY

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              CURRENT LIABILITIES:

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Current portion of long-term debt, net of deferred financing costs, current (Note 7)

                            	
                               

                            	
                              $

                            	
                              60,763

                            	
                               

                            	
                               

                            	
                              $

                            	
                              65,072

                            	
                               

                            
	
                              Accounts payable, trade and other

                            	
                               

                            	
                               

                            	
                              7,954

                            	
                               

                            	
                               

                            	
                               

                            	
                              6,572

                            	
                               

                            
	
                              Due to related parties (Note 4(a) and 4(d))

                            	
                               

                            	
                               

                            	
                              271

                            	
                               

                            	
                               

                            	
                               

                            	
                              25

                            	
                               

                            
	
                              Accrued liabilities

                            	
                               

                            	
                               

                            	
                              8,246

                            	
                               

                            	
                               

                            	
                               

                            	
                              5,734

                            	
                               

                            
	
                              Deferred revenue

                            	
                               

                            	
                               

                            	
                              3,207

                            	
                               

                            	
                               

                            	
                               

                            	
                              822

                            	
                               

                            
	
                              Total current liabilities

                            	
                               

                            	
                               

                            	
                              80,441

                            	
                               

                            	
                               

                            	
                               

                            	
                              78,225

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Long-term debt, net of current portion and deferred financing costs, non-current (Note 7)

                            	
                               

                            	
                               

                            	
                              540,621

                            	
                               

                            	
                               

                            	
                               

                            	
                              533,109

                            	
                               

                            
	
                              Other non-current liabilities

                            	
                               

                            	
                               

                            	
                              902

                            	
                               

                            	
                               

                            	
                               

                            	
                              740

                            	
                               

                            
	
                              Commitments and contingencies (Note 8)

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              STOCKHOLDERS' EQUITY:

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Preferred stock (Note 9(a))

                            	
                               

                            	
                               

                            	
                              26

                            	
                               

                            	
                               

                            	
                               

                            	
                              26

                            	
                               

                            
	
                              Common stock, $0.01 par value; 200,000,000 shares authorized and 106,131,017 and 84,696,017 issued and outstanding at
                                  December 31, 2017 and 2016, respectively (Note 9(b) and (c))

                            	
                               

                            	
                               

                            	
                              1,061

                            	
                               

                            	
                               

                            	
                               

                            	
                              847

                            	
                               

                            
	
                              Additional paid-in capital

                            	
                               

                            	
                               

                            	
                              1,070,500

                            	
                               

                            	
                               

                            	
                               

                            	
                              985,171

                            	
                               

                            
	
                              Accumulated other comprehensive income

                            	
                               

                            	
                               

                            	
                              294

                            	
                               

                            	
                               

                            	
                               

                            	
                              185

                            	
                               

                            
	
                              Retained earnings/(Accumulated deficit)

                            	
                               

                            	
                               

                            	
                              (447,123

                            	
                              )

                            	
                               

                            	
                               

                            	
                              70,360

                            	
                               

                            
	
                              Total stockholders' equity

                            	
                               

                            	
                               

                            	
                              624,758

                            	
                               

                            	
                               

                            	
                               

                            	
                              1,056,589

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Total liabilities and stockholders' equity

                            	
                               

                            	
                              $

                            	
                              1,246,722

                            	
                               

                            	
                               

                            	
                              $

                            	
                              1,668,663

                            	
                               

                            
	
                              The accompanying notes are an integral part of these consolidated financial statements.

                            	
                               

                            
	
                               

                            	
                               

                            

                      
                        F-4

                        
                          

                      

                      

                      

                      

                      

                      

                      

                      	
                              DIANA SHIPPING INC.

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              CONSOLIDATED STATEMENTS OF OPERATIONS

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              For the years ended December 31, 2017, 2016 and 2015

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              (Expressed in thousands of U.S. Dollars – except for share and per share data)

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                               

                            	
                               

                            	
                              2017

                            	
                               

                            	
                               

                            	
                              2016

                            	
                               

                            	
                               

                            	
                              2015

                            	
                               

                            
	
                              REVENUES:

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Time charter revenues

                            	
                               

                            	
                              $

                            	
                              161,897

                            	
                               

                            	
                               

                            	
                              $

                            	
                              114,259

                            	
                               

                            	
                               

                            	
                              $

                            	
                              157,712

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              EXPENSES:

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Voyage expenses

                            	
                               

                            	
                               

                            	
                              8,617

                            	
                               

                            	
                               

                            	
                               

                            	
                              13,826

                            	
                               

                            	
                               

                            	
                               

                            	
                              15,528

                            	
                               

                            
	
                              Vessel operating expenses

                            	
                               

                            	
                               

                            	
                              90,358

                            	
                               

                            	
                               

                            	
                               

                            	
                              85,955

                            	
                               

                            	
                               

                            	
                               

                            	
                              88,272

                            	
                               

                            
	
                              Depreciation and amortization of deferred charges  (Notes 2(l) and 2(m))

                            	
                               

                            	
                               

                            	
                              87,003

                            	
                               

                            	
                               

                            	
                               

                            	
                              81,578

                            	
                               

                            	
                               

                            	
                               

                            	
                              76,333

                            	
                               

                            
	
                              General and administrative expenses

                            	
                               

                            	
                               

                            	
                              26,332

                            	
                               

                            	
                               

                            	
                               

                            	
                              25,510

                            	
                               

                            	
                               

                            	
                               

                            	
                              25,335

                            	
                               

                            
	
                              Management fees to related party (Notes 3(b) and 4(d))

                            	
                               

                            	
                               

                            	
                              1,883

                            	
                               

                            	
                               

                            	
                               

                            	
                              1,464

                            	
                               

                            	
                               

                            	
                               

                            	
                              405

                            	
                               

                            
	
                              Impairment loss (Note 5)

                            	
                               

                            	
                               

                            	
                              442,274

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            
	
                              Insurance recoveries, net of other loss (Note 5)

                            	
                               

                            	
                               

                            	
                              (10,879

                            	
                              )

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            
	
                              Gain on contract termination

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (5,500

                            	
                              )

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            
	
                              Other loss/(income)

                            	
                               

                            	
                               

                            	
                              296

                            	
                               

                            	
                               

                            	
                               

                            	
                              (253

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (984

                            	
                              )

                            
	
                              Operating loss

                            	
                               

                            	
                              $

                            	
                              (483,987

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (88,321

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (47,177

                            	
                              )

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              OTHER INCOME / (EXPENSES):

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Interest and finance costs (Note 10)

                            	
                               

                            	
                               

                            	
                              (26,628

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (21,949

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (15,555

                            	
                              )

                            
	
                              Interest and other income (Note 4(b))

                            	
                               

                            	
                               

                            	
                              4,508

                            	
                               

                            	
                               

                            	
                               

                            	
                              2,410

                            	
                               

                            	
                               

                            	
                               

                            	
                              3,152

                            	
                               

                            
	
                              Loss from equity method investments (Note 3)

                            	
                               

                            	
                               

                            	
                              (5,607

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (56,377

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (5,133

                            	
                              )

                            
	
                              Total other expenses, net

                            	
                               

                            	
                              $

                            	
                              (27,727

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (75,916

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (17,536

                            	
                              )

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Net loss

                            	
                               

                            	
                              $

                            	
                              (511,714

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (164,237

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (64,713

                            	
                              )

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Dividends on series B preferred shares (Notes 9(a) and 11)

                            	
                               

                            	
                               

                            	
                              (5,769

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (5,769

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (5,769

                            	
                              )

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Net loss attributed to common stockholders

                            	
                               

                            	
                              $

                            	
                              (517,483

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (170,006

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (70,482

                            	
                              )

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Loss per common share,
                                    basic and diluted (Note 11)

                            	
                               

                            	
                              $

                            	
                              (5.41

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (2.11

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (0.89

                            	
                              )

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Weighted average
                                    number of common shares, basic and diluted (Note 11)

                            	
                               

                            	
                               

                            	
                              95,731,093

                            	
                               

                            	
                               

                            	
                               

                            	
                              80,441,517

                            	
                               

                            	
                               

                            	
                               

                            	
                              79,518,009

                            	
                               

                            

                      

                      

                      	
                              DIANA SHIPPING INC.

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              For the years ended December 31, 2017, 2016 and 2015

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              (Expressed in thousands of U.S. Dollars)

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                               

                            	
                               

                            	
                              2017

                            	
                               

                            	
                               

                            	
                              2016

                            	
                               

                            	
                               

                            	
                              2015

                            	
                               

                            
	
                              Net loss

                            	
                               

                            	
                              $

                            	
                              (511,714

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (164,237

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (64,713

                            	
                              )

                            
	
                              Other comprehensive income/(loss) (Actuarial gain/(loss))

                            	
                               

                            	
                               

                            	
                              109

                            	
                               

                            	
                               

                            	
                               

                            	
                              (84

                            	
                              )

                            	
                               

                            	
                               

                            	
                              1,016

                            	
                               

                            
	
                              Comprehensive loss

                            	
                               

                            	
                              $

                            	
                              (511,605

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (164,321

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (63,697

                            	
                              )

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              The accompanying notes are an integral part of these consolidated financial statements.

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            

                      
                        F-5

                        
                          

                      

                      

                      

                      	
                              DIANA SHIPPING INC.

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                            	
                               

                            
	
                              For the years ended December 31, 2017, 2016 and 2015

                            	
                               

                            
	
                              (Expressed in thousands of U.S. Dollars – except for share and per share data)

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                                

                            	
                               

                            	
                              Preferred Stock

                            	
                               

                            	
                               

                            	
                              Common Stock

                            	
                               

                            	
                               

                            	
                              Additional Paid-in Capital

                            	
                               

                            	
                               

                            	
                              Other Comprehensive Income / (Loss)

                            	
                               

                            	
                               

                            	
                              Retained Earnings/

                              (Accumulated Deficit)

                            	
                               

                            	
                               

                            	
                              Total Equity

                            	
                               

                            
	
                               

                            
	
                                

                            	
                               

                            	
                              # of Shares

                            	
                               

                            	
                               

                            	
                              Par Value

                            	
                               

                            	
                               

                            	
                              # of Shares

                            	
                               

                            	
                               

                            	
                              Par Value

                            	
                               

                            
	
                              BALANCE, December 31,  2014

                            	
                               

                            	
                               

                            	
                              2,600,000

                            	
                               

                            	
                               

                            	
                              $

                            	
                              26

                            	
                               

                            	
                               

                            	
                               

                            	
                              81,859,821

                            	
                               

                            	
                               

                            	
                              $

                            	
                              819

                            	
                               

                            	
                               

                            	
                              $

                            	
                              971,280

                            	
                               

                            	
                               

                            	
                              $

                            	
                              (747

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              310,848

                            	
                               

                            	
                               

                            	
                              $

                            	
                              1,282,226

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Net loss

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              (64,713

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (64,713

                            	
                              )

                            
	
                              Issuance of restricted stock and compensation cost (Note 9(d))

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              1,100,000

                            	
                               

                            	
                               

                            	
                               

                            	
                              10

                            	
                               

                            	
                               

                            	
                               

                            	
                              8,269

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              8,279

                            	
                               

                            
	
                              Dividends on series B preferred stock (Note 9(a))

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (5,769

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (5,769

                            	
                              )

                            
	
                              Stock repurchased and retired (Note 9(e))

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (413,804

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (4

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (2,669

                            	
                              )

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (2,673

                            	
                              )

                            
	
                              Other comprehensive income

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              1,016

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              1,016

                            	
                               

                            
	
                              BALANCE, December 31,  2015

                            	
                               

                            	
                               

                            	
                              2,600,000

                            	
                               

                            	
                               

                            	
                              $

                            	
                              26

                            	
                               

                            	
                               

                            	
                               

                            	
                              82,546,017

                            	
                               

                            	
                               

                            	
                              $

                            	
                              825

                            	
                               

                            	
                               

                            	
                              $

                            	
                              976,880

                            	
                               

                            	
                               

                            	
                              $

                            	
                              269

                            	
                               

                            	
                               

                            	
                              $

                            	
                              240,366

                            	
                               

                            	
                               

                            	
                              $

                            	
                              1,218,366

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Net loss

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              (164,237

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (164,237

                            	
                              )

                            
	
                              Issuance of restricted stock and compensation cost (Note 9(d))

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              2,150,000

                            	
                               

                            	
                               

                            	
                               

                            	
                              22

                            	
                               

                            	
                               

                            	
                               

                            	
                              8,291

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              8,313

                            	
                               

                            
	
                              Dividends on series B preferred stock (Note 9(a))

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (5,769

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (5,769

                            	
                              )

                            
	
                              Other comprehensive loss

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (84

                            	
                              )

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (84

                            	
                              )

                            
	
                              BALANCE, December 31,  2016

                            	
                               

                            	
                               

                            	
                              2,600,000

                            	
                               

                            	
                               

                            	
                              $

                            	
                              26

                            	
                               

                            	
                               

                            	
                               

                            	
                              84,696,017

                            	
                               

                            	
                               

                            	
                              $

                            	
                              847

                            	
                               

                            	
                               

                            	
                              $

                            	
                              985,171

                            	
                               

                            	
                               

                            	
                              $

                            	
                              185

                            	
                               

                            	
                               

                            	
                              $

                            	
                              70,360

                            	
                               

                            	
                               

                            	
                              $

                            	
                              1,056,589

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Net loss

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              (511,714

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (511,714

                            	
                              )

                            
	
                              Issuance of common stock (Note 9(c))

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              20,125,000

                            	
                               

                            	
                               

                            	
                               

                            	
                              201

                            	
                               

                            	
                               

                            	
                               

                            	
                              77,110

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              77,311

                            	
                               

                            
	
                              Issuance of restricted stock and compensation cost (Note 9(d))

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              1,310,000

                            	
                               

                            	
                               

                            	
                               

                            	
                              13

                            	
                               

                            	
                               

                            	
                               

                            	
                              8,219

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              8,232

                            	
                               

                            
	
                              Dividends on series B preferred stock (Note 9(a))

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (5,769

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (5,769

                            	
                              )

                            
	
                              Other comprehensive income

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              109

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              109

                            	
                               

                            
	
                              BALANCE, December 31,  2017

                            	
                               

                            	
                               

                            	
                              2,600,000

                            	
                               

                            	
                               

                            	
                              $

                            	
                              26

                            	
                               

                            	
                               

                            	
                               

                            	
                              106,131,017

                            	
                               

                            	
                               

                            	
                              $

                            	
                              1,061

                            	
                               

                            	
                               

                            	
                              $

                            	
                              1,070,500

                            	
                               

                            	
                               

                            	
                              $

                            	
                              294

                            	
                               

                            	
                               

                            	
                              $

                            	
                              (447,123

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              624,758

                            	
                               

                            
	
                              The accompanying notes are an integral part of these consolidated financial statements.

                            	
                               

                            

                      

                      

                      
                        F-6

                        
                          

                      

                      

                      

                      

                      

                      	
                              DIANA SHIPPING INC.

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              CONSOLIDATED STATEMENTS OF CASH FLOWS

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              For the years ended December 31, 2017 , 2016 and 2015

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              (Expressed in thousands of U.S. Dollars)

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                               

                            	
                               

                            	
                              2017

                            	
                               

                            	
                               

                            	
                              2016

                            	
                               

                            	
                               

                            	
                              2015

                            	
                               

                            
	
                               Cash Flows
                                  from Operating Activities:

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Net loss

                            	
                               

                            	
                              $

                            	
                              (511,714

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (164,237

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (64,713

                            	
                              )

                            
	
                              Adjustments to reconcile net loss to net cash from operating activities:

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Depreciation and amortization of deferred charges

                            	
                               

                            	
                               

                            	
                              87,003

                            	
                               

                            	
                               

                            	
                               

                            	
                              81,578

                            	
                               

                            	
                               

                            	
                               

                            	
                              76,333

                            	
                               

                            
	
                              Impairment loss (Note 5)

                            	
                               

                            	
                               

                            	
                              442,274

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            
	
                              Amortization of financing costs (Note 10)

                            	
                               

                            	
                               

                            	
                              1,455

                            	
                               

                            	
                               

                            	
                               

                            	
                              1,503

                            	
                               

                            	
                               

                            	
                               

                            	
                              1,364

                            	
                               

                            
	
                              Amortization of free lubricants benefit

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (15

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (85

                            	
                              )

                            
	
                              Compensation cost on restricted stock (Note 9(d))

                            	
                               

                            	
                               

                            	
                              8,232

                            	
                               

                            	
                               

                            	
                               

                            	
                              8,313

                            	
                               

                            	
                               

                            	
                               

                            	
                              8,279

                            	
                               

                            
	
                              Actuarial gain/(loss)

                            	
                               

                            	
                               

                            	
                              109

                            	
                               

                            	
                               

                            	
                               

                            	
                              (84

                            	
                              )

                            	
                               

                            	
                               

                            	
                              1,016

                            	
                               

                            
	
                              Gain from insurance recoveries, net of other loss (Note 5)

                            	
                               

                            	
                               

                            	
                              (10,879

                            	
                              )

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            
	
                              Gain on shipbuilding contract termination

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (278

                            	
                              )

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            
	
                              Loss from equity method investments, net of dividends (Note 3)

                            	
                               

                            	
                               

                            	
                              5,607

                            	
                               

                            	
                               

                            	
                               

                            	
                              56,377

                            	
                               

                            	
                               

                            	
                               

                            	
                              5,133

                            	
                               

                            
	
                               (Increase) / Decrease in:

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Receivables

                            	
                               

                            	
                               

                            	
                              966

                            	
                               

                            	
                               

                            	
                               

                            	
                              (1,391

                            	
                              )

                            	
                               

                            	
                               

                            	
                              1,871

                            	
                               

                            
	
                              Due from related parties

                            	
                               

                            	
                               

                            	
                              (141

                            	
                              )

                            	
                               

                            	
                               

                            	
                              3,334

                            	
                               

                            	
                               

                            	
                               

                            	
                              2,070

                            	
                               

                            
	
                              Inventories

                            	
                               

                            	
                               

                            	
                              90

                            	
                               

                            	
                               

                            	
                               

                            	
                              391

                            	
                               

                            	
                               

                            	
                               

                            	
                              1,062

                            	
                               

                            
	
                              Prepaid expenses and other assets

                            	
                               

                            	
                               

                            	
                              142

                            	
                               

                            	
                               

                            	
                               

                            	
                              620

                            	
                               

                            	
                               

                            	
                               

                            	
                              (349

                            	
                              )

                            
	
                               Increase / (Decrease) in:

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Accounts payable

                            	
                               

                            	
                               

                            	
                              1,382

                            	
                               

                            	
                               

                            	
                               

                            	
                              (2,391

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (739

                            	
                              )

                            
	
                              Due to related parties

                            	
                               

                            	
                               

                            	
                              246

                            	
                               

                            	
                               

                            	
                               

                            	
                              (39

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (217

                            	
                              )

                            
	
                              Accrued liabilities, net of accrued preferred dividends

                            	
                               

                            	
                               

                            	
                              2,512

                            	
                               

                            	
                               

                            	
                               

                            	
                              (715

                            	
                              )

                            	
                               

                            	
                               

                            	
                              437

                            	
                               

                            
	
                              Deferred revenue

                            	
                               

                            	
                               

                            	
                              2,385

                            	
                               

                            	
                               

                            	
                               

                            	
                              (1,592

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (865

                            	
                              )

                            
	
                              Other liabilities

                            	
                               

                            	
                               

                            	
                              162

                            	
                               

                            	
                               

                            	
                               

                            	
                              117

                            	
                               

                            	
                               

                            	
                               

                            	
                              (643

                            	
                              )

                            
	
                              Drydock costs

                            	
                               

                            	
                               

                            	
                              (6,418

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (2,489

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (6,009

                            	
                              )

                            
	
                               Net cash
                                  provided by / (used in) Operating Activities

                            	
                               

                            	
                              $

                            	
                              23,413

                            	
                               

                            	
                               

                            	
                              $

                            	
                              (20,998

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              23,945

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                               Cash Flows
                                  from Investing Activities:

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Payments for vessel acquisitions, improvements and construction (Note 5)

                            	
                               

                            	
                               

                            	
                              (125,781

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (50,911

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (155,352

                            	
                              )

                            
	
                              Proceeds from vessel sale, net of expenses (Note 5)

                            	
                               

                            	
                               

                            	
                              2,032

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            
	
                              Proceeds from insurance contract, net of expenses (Note 5)

                            	
                               

                            	
                               

                            	
                              11,362

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            
	
                              Proceeds from sale of investment (Note 3)

                            	
                               

                            	
                               

                            	
                              158

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            
	
                              Proceeds from shipbuilding contract termination (Notes 5)

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              9,413

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            
	
                              Cash dividends from investment in Diana Containerships Inc. (Note 3(a))

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              96

                            	
                               

                            	
                               

                            	
                               

                            	
                              193

                            	
                               

                            
	
                              Loan to Diana Containerships Inc. (Note 4(b))

                            	
                               

                            	
                               

                            	
                              (40,000

                            	
                              )

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            
	
                              Joint venture investment (Note 3(b))

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (267

                            	
                              )

                            
	
                              Payments for plant, property and equipment (Note 6)

                            	
                               

                            	
                               

                            	
                              (104

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (217

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (211

                            	
                              )

                            
	
                               Net cash
                                  used in Investing Activities

                            	
                               

                            	
                              $

                            	
                              (152,333

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (41,619

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (155,637

                            	
                              )

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                               Cash Flows
                                  from Financing Activities:

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Proceeds from long-term debt (Note 7)

                            	
                               

                            	
                               

                            	
                              57,240

                            	
                               

                            	
                               

                            	
                               

                            	
                              39,265

                            	
                               

                            	
                               

                            	
                               

                            	
                              441,173

                            	
                               

                            
	
                              Proceeds from issuance of common stock, net of expenses (Note 9(c))

                            	
                               

                            	
                               

                            	
                              77,311

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            
	
                              Cash dividends on preferred stock

                            	
                               

                            	
                               

                            	
                              (5,769

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (5,769

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (5,769

                            	
                              )

                            
	
                              Payments for repurchase of common stock (Note 9(e))

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (2,673

                            	
                              )

                            
	
                              Financing costs

                            	
                               

                            	
                               

                            	
                              (31

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (466

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (5,482

                            	
                              )

                            
	
                              Loan payments (Note 7)

                            	
                               

                            	
                               

                            	
                              (55,164

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (42,489

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (321,240

                            	
                              )

                            
	
                               Net cash
                                  provided by / (used in) Financing Activities

                            	
                               

                            	
                              $

                            	
                              73,587

                            	
                               

                            	
                               

                            	
                              $

                            	
                              (9,459

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              106,009

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                               Net 
                                  decrease in cash, cash equivalents and restricted cash

                            	
                               

                            	
                               

                            	
                              (55,333

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (72,076

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (25,683

                            	
                              )

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                               Cash, cash
                                  equivalents and restricted cash at beginning of the year

                            	
                               

                            	
                               

                            	
                              121,142

                            	
                               

                            	
                               

                            	
                               

                            	
                              193,218

                            	
                               

                            	
                               

                            	
                               

                            	
                              218,901

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                               Cash, cash
                                  equivalents and restricted cash at end of the year

                            	
                               

                            	
                              $

                            	
                              65,809

                            	
                               

                            	
                               

                            	
                              $

                            	
                              121,142

                            	
                               

                            	
                               

                            	
                              $

                            	
                              193,218

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Cash and cash equivalents

                            	
                               

                            	
                              $

                            	
                              40,227

                            	
                               

                            	
                               

                            	
                              $

                            	
                              98,142

                            	
                               

                            	
                               

                            	
                               

                            	
                              171,718

                            	
                               

                            
	
                              Restricted cash

                            	
                               

                            	
                               

                            	
                              25,582

                            	
                               

                            	
                               

                            	
                               

                            	
                              23,000

                            	
                               

                            	
                               

                            	
                               

                            	
                              21,500

                            	
                               

                            
	
                              Cash, cash equivalents and restricted cash

                            	
                               

                            	
                              $

                            	
                              65,809

                            	
                               

                            	
                               

                            	
                              $

                            	
                              121,142

                            	
                               

                            	
                               

                            	
                               

                            	
                              193,218

                            	
                               

                            
	
                              SUPPLEMENTAL CASH FLOW INFORMATION

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Related party loan reduction in exchange for preferred shares  (Note 4(b))

                            	
                               

                            	
                              $

                            	
                              3,000

                            	
                               

                            	
                               

                            	
                              $

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              -

                            	
                               

                            
	
                              Interest, net of amounts capitalized

                            	
                               

                            	
                              $

                            	
                              24,503

                            	
                               

                            	
                               

                            	
                              $

                            	
                              19,265

                            	
                               

                            	
                               

                            	
                              $

                            	
                              13,048

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              The accompanying notes are an integral part of these consolidated financial statements.

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            

                      
                        F-7

                        
                          

                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      1.  Basis of Presentation and General Information

                      

                      

                      The accompanying consolidated financial statements include the accounts of Diana
                          Shipping Inc., or DSI, and its wholly-owned and beneficially-owned subsidiaries (collectively, the "Company"). DSI was formed on March 8, 1999 as Diana Shipping Investment Corp. under the laws of the Republic of Liberia. In
                          February 2005, the Company's articles of incorporation were amended. Under the amended articles of incorporation, the Company was renamed Diana Shipping Inc. and was re-domiciled from the Republic of Liberia to the Republic of the
                          Marshall Islands.

                      

                      

                      The consolidated statements of cash flows for the years ended December 31, 2016 and
                          2015 have been derived from the audited consolidated financial statements for those years, as adjusted to conform to current period presentation for restricted cash following the adoption of ASU No. 2016-18.

                      

                      

                      The Company is engaged in the ocean transportation of dry bulk cargoes worldwide
                          mainly through the ownership of dry bulk carrier vessels. The Company also operates the majority of its own fleet through Diana Shipping Services S.A., or DSS, a wholly-owned subsidiary and a limited number of vessels through a
                          50% owned joint venture (Notes 3 and 4).

                      

                      

                      Diana Shipping Services S.A., or DSS, provides the Company and its vessels with management services since November 12, 2004, pursuant to management agreements and since October 1,
                          2013 administrative services with regards to services related to DSI's operations and its subsidiaries. Such costs are eliminated in consolidation. As at December 31, 2017, DSS does not provide management services to ten vessels
                          in the Company's fleet whose management has been transferred progressively since August 2015 to Diana Wilhelmsen Management Limited, or DWM, (Notes 3(b) and 4(d)).

                      

                      

                      During 2017, 2016, and 2015 charterers that individually accounted for 10% or more of
                          the Company's time charter revenues were as follows:

                      

                      

                      	
                              Charterer  

                            	
                               

                            	
                              2017

                            	
                               

                            	
                               

                            	
                              2016

                            	
                               

                            	
                               

                            	
                              2015

                            	
                               

                            
	
                              A

                            	
                               

                            	
                               

                            	
                              17

                            	
                              %

                            	
                               

                            	
                               

                            	
                               

                            	 	
                               

                            	
                               

                            	
                               

                            	 
	
                              B

                            	
                               

                            	
                               

                            	
                              14

                            	
                              %

                            	
                               

                            	
                               

                            	
                              15

                            	
                              %

                            	
                               

                            	
                               

                            	
                               

                            	 
	
                              C

                            	 	 	
                              12

                            	
                              %

                            	 	 	
                              10

                            	
                              %

                            	 	 	 	 
	
                              D

                            	
                               

                            	
                               

                            	
                               

                            	 	
                               

                            	
                               

                            	
                              19

                            	
                              %

                            	
                               

                            	
                               

                            	
                              24

                            	
                              %

                            
	
                              E

                            	
                               

                            	
                               

                            	
                               

                            	 	
                               

                            	
                               

                            	
                              10

                            	
                              %

                            	
                               

                            	
                               

                            	
                              20

                            	
                              %

                            
	
                              F

                            	
                               

                            	
                               

                            	
                               

                            	 	
                               

                            	
                               

                            	
                               

                            	 	
                               

                            	
                               

                            	
                              12

                            	
                              %

                            
	
                              G

                            	
                               

                            	
                               

                            	
                               

                            	 	
                               

                            	
                               

                            	
                               

                            	 	
                               

                            	
                               

                            	
                              10

                            	
                              %

                            

                      

                      

                      

                      

                      
                        F-8

                        
                          

                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      2.  Significant Accounting Policies

                      

                      

                      (a) Principles of Consolidation: The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, and include the accounts of Diana Shipping Inc.
                          and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. Under Accounting Standards Codification ("ASC") 810 "Consolidation", the Company consolidates entities in which
                          it has a controlling financial interest, by first considering if an entity meets the definition of a variable interest entity ("VIE") for which the Company is deemed to be the primary beneficiary under the VIE model, or if the
                          Company controls an entity through a majority of voting interest based on the voting interest model. The Company evaluates financial instruments, service contracts, and other arrangements to determine if any variable interests
                          relating to an entity exist. For entities in which the Company has a variable interest, the Company determines if the entity is a VIE by considering whether the entity's equity investment at risk is sufficient to finance its
                          activities without additional subordinated financial support and whether the entity's at-risk equity holders have the characteristics of a controlling financial interest. In performing the analysis of whether the Company is the
                          primary beneficiary of a VIE, the Company considers whether it individually has the power to direct the activities of the VIE that most significantly affect the entity's performance and also has the obligation to absorb losses or
                          the right to receive benefits of the VIE that could potentially be significant to the VIE. The Company reconsiders the initial determination of whether an entity is a VIE if certain types of events ("reconsideration events")
                          occur. If the Company holds a variable interest in an entity that previously was not a VIE, it reconsiders whether the entity has become a VIE. The Company has identified that it has variable interests in Diana Containerships Inc.
                          and Diana Wilhelmsen Management Limited. The Company assessed reconsideration events and concluded that Diana Containerships Inc. is a VIE, however the Company is not the primary beneficiary (Notes 3(a) and 4(b)).

                      

                      

                      (b) Use of Estimates: The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the
                          reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. 
                          Actual results could differ from those estimates.

                      

                      

                      (c) Other Comprehensive Income / (loss): The Company separately presents certain transactions, which are recorded directly as components of stockholders' equity. Other Comprehensive Income / (Loss) is presented in a
                          separate statement.

                      

                      

                      (d) Foreign Currency Translation: The functional currency of the Company is the U.S. dollar because the Company's vessels operate in international shipping markets, and therefore primarily transact business in U.S.
                          dollars. The Company's accounting records are maintained in U.S. dollars. Transactions involving other currencies during the year are converted into U.S. dollars using the exchange rates in effect at the time of the transactions.
                          At the balance sheet dates, monetary assets and liabilities which are denominated in other currencies are translated into U.S. dollars at the year-end exchange rates. Resulting gains or losses are reflected separately in the
                          accompanying consolidated statements of operations.

                      

                      

                      (e) Cash and Cash Equivalents and Restricted Cash: The Company considers highly liquid investments such as time deposits, certificates of deposit and their equivalents with an original maturity of three months or
                          less to be cash equivalents. Restricted cash consists mainly of cash deposits required to be maintained at all times under the Company's loan facilities (Note 7). As of December 31, 2017, restricted cash also included $582 of cash
                          guarantee which was restricted to withdrawal or usage.

                      

                      

                      
                        F-9

                        
                          

                      

                      

                      

                      

                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      
                        
                          	(f)	
                                  Accounts Receivable,
                                        Trade: The amount shown as accounts receivable, trade, at each balance sheet date, includes receivables from charterers for hire, ballast bonus billings, if any, hold cleanings and extra voyage insurance, net
                                      of any provision for doubtful accounts. At each balance sheet date, all potentially uncollectible accounts are assessed individually for purposes of determining the appropriate provision for doubtful accounts. No
                                      provision for doubtful accounts was established as of December 31, 2017 and 2016.

                                

                        

                      

                      

                      

                      
                        
                          	(g)	
                                  Loan Receivable from
                                        Related Party: The amounts shown as Due from related parties, current and non-current, in the consolidated balance sheet as at December 31, 2017 and 2016, represent amounts receivable from Diana Containerships
                                      Inc., or Diana Containerships, with respect to a loan agreement, net of any provision for credit losses and does not include the $5,000 discount premium due on the termination date of the loan (Note 4(b)). Interest
                                      income and fees, deriving from the agreement are recorded in the accounts as incurred. At each balance sheet date, amounts due under the aforementioned loan agreement are assessed for purposes of determining the
                                      appropriate provision for credit losses. As at December 31, 2017 and 2016, the Company assessed the ability of Diana Containerships to meet its obligations under the loan agreement by taking into consideration existing
                                      economic conditions, the current financial condition of Diana Containerships, equity offerings, sale plans, historical losses, and other risks/factors that may affect Diana Containerships' future financial condition
                                      and its ability to meet its obligations. As a result of this assessment, the Company did not record any provision for credit losses, as it determined that Diana Containerships will be able to meet its obligations under
                                      the loan in the near future.

                                

                        

                      

                      

                      

                      
                        
                          	(h)	
                                  Inventories: Inventories
                                      consist of lubricants and victualling which are stated at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable
                                      costs of completion, disposal, and transportation. When evidence exists that the net realizable value of inventory is lower than its cost, the difference is recognized as a loss in earnings in the period in which it
                                      occurs. Cost is determined by the first in, first out method. Inventories may also consist of bunkers when on the balance sheet date a vessel remains idle. Bunkers, if any, are also stated at the lower of cost or net
                                      realizable value and cost is determined by the first in, first out method.

                                

                        

                      

                      

                      

                      
                        
                          	(i)	
                                  Vessel Cost: Vessels
                                      are stated at cost which consists of the contract price and any material expenses incurred upon acquisition or during construction. Expenditures for conversions and major improvements are also capitalized when they
                                      appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels; otherwise these amounts are charged to expense as incurred. Interest cost incurred during the assets'
                                      construction periods that theoretically could have been avoided if expenditure for the assets had not been made is also capitalized. The capitalization rate, applied on accumulated expenditures for the vessel, is based
                                      on interest rates applicable to outstanding borrowings of the period.

                                

                        

                      

                      

                      

                      
                        
                          	(j)	
                                  Property and equipment:
                                      The Company owns the land and building where its offices are located. Land is presented in its fair value on the date of acquisition and it is not subject to depreciation. The building has an estimated useful life of
                                      55 years with no residual value. Depreciation is calculated on a straight-line basis. Equipment consists of office furniture and equipment, computer software and hardware and vehicles which consist of motor scooters
                                      and a car. The useful life of the car is 10 years, of the office furniture, equipment and the scooters is 5 years; and of the computer software and hardware is 3 years. Depreciation is calculated on a straight-line
                                      basis.

                                

                        

                      

                      

                      

                      
                        F-10

                        
                          

                      

                      

                      

                      

                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      
                        
                          	(k)	
                                  Impairment of Long-Lived
                                        Assets: Long-lived assets (vessels, land, and building) and certain identifiable intangibles held and used by an entity are reviewed for impairment whenever events or changes in circumstances (such as market
                                      conditions, obsolesce or damage to the asset, potential sales and other business plans) indicate that the carrying amount of the assets may not be recoverable. When the estimate of undiscounted projected net operating
                                      cash flows, excluding interest charges, expected to be generated by the use of the asset over its remaining useful life and its eventual disposition is less than its carrying amount, the Company should evaluate the
                                      asset for an impairment loss. Measurement of the impairment loss is based on the fair value of the asset. The Company determines the fair value of its assets based on management estimates and assumptions and by making
                                      use of available market data and taking into consideration third party valuations.

                                

                        

                      

                      

                      

                      With respect to the vessels, the Company
                          determines undiscounted projected net operating cash flows for each vessel by considering the historical and estimated vessels' performance and utilization, assuming (i) future revenues calculated for the fixed days, using the
                          fixed charter rate of each vessel from existing time charters and for the unfixed days, the most recent 10 year average of historical 1 year time charter rates available for each type of vessel over the remaining estimated life of
                          each vessel, net of commissions. Historical ten-year blended average one-year time charter rates are in line with the Company's overall chartering strategy, they reflect the full operating history of vessels of the same type and
                          particulars with the Company's operating fleet and they cover at least a full business cycle; (ii) expected outflows for scheduled vessels' maintenance; (iii) vessel operating expenses; and (iv) fleet utilization; assumptions in
                          line with the Company's historical performance and its expectations for future fleet utilization under its current fleet deployment strategy.

                      

                      

                      During the last quarter of 2017, the Company's
                          management considered various factors, including the recovery of the market, the worldwide demand for dry-bulk products, supply of tonnage and order book and concluded that the charter rates for the years 2008-2010 are
                          exceptional. In this respect the Company's management decided to exclude from the 10-year average of 1 year time charters these three years for which the rates were well above the average and which were not considered sustainable
                          for the foreseeable future. The Company performed the exercise discussed above which resulted to recording an impairment on certain vessels' carrying value (Note 5). No impairment loss has been identified or recorded for 2016 and
                          2015.

                      

                      

                      With respect to the land and building, the
                          Company determines undiscounted projected net operating cash flows by considering an estimated monthly rent the Company would have to pay in order to lease a similar property, during the useful life of the building. As at December
                          31, 2017, 2016 and 2015, no impairment loss was identified or recorded and the Company has not identified any other facts or circumstances that would require the write down of the value of its land or building in the near future.

                      

                      

                      
                        
                          	(l)	
                                  Vessel Depreciation:
                                      Depreciation is computed using the straight-line method over the estimated useful life of the vessels, after considering the estimated salvage (scrap) value.  Each vessel's salvage value is equal to the product of its
                                      lightweight tonnage and estimated scrap rate. Management estimates the useful life of the Company's vessels to be 25 years from the date of initial delivery from the shipyard. Second hand vessels are depreciated from
                                      the date of their acquisition through their remaining estimated useful life. When regulations place limitations over the ability of a vessel to trade on a worldwide basis, its remaining useful life is adjusted at the
                                      date such regulations are adopted.

                                

                        

                      

                      

                      

                      
                        F-11

                        
                          

                      

                      

                      

                      

                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      
                        
                          	(m)	
                                  Accounting for
                                        Dry-Docking Costs: The Company follows the deferral method of accounting for dry-docking costs whereby actual costs incurred are deferred and are amortized on a straight-line basis over the period through the
                                      date the next dry-docking is scheduled to become due. Unamortized dry-docking costs of vessels that are sold or impaired are written off and included in the calculation of the resulting gain or loss in the year of the
                                      vessel's sale or impairment.

                                

                        

                      

                      

                      

                      
                        
                          	(n)	
                                  Financing Costs:
                                      Fees paid to lenders for obtaining new loans or refinancing existing ones are deferred and recorded as a contra to debt. Other fees paid for obtaining loan facilities not used at the balance sheet date are capitalized
                                      as deferred financing costs. Fees relating to drawn loan facilities are amortized to interest and finance costs over the life of the related debt using the effective interest method and fees incurred for loan
                                      facilities not used at the balance sheet date are amortized using the straight line method according to their availability terms. Unamortized fees relating to loans repaid or refinanced as debt extinguishment are
                                      expensed as interest and finance costs in the period the repayment or extinguishment is made. Loan commitment fees are charged to expense in the period incurred, unless they relate to loans obtained to finance vessels
                                      under construction, in which case they are capitalized to the vessels' cost.

                                

                        

                      

                      

                      

                      
                        
                          	(o)	
                                  Concentration of Credit
                                        Risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash, trade accounts receivable and the loan receivable from a related
                                      party. The Company places its temporary cash investments, consisting mostly of deposits, with various qualified financial institutions and performs periodic evaluations of the relative credit standing of those
                                      financial institutions that are considered in the Company's investment strategy. The Company limits its credit risk with accounts receivable by performing ongoing credit evaluations of its customers' financial
                                      condition and generally does not require collateral for its accounts receivable and does not have any agreements to mitigate credit risk. The Company limits its credit risk with the loan receivable by performing
                                      ongoing credit evaluations of Diana Containerships' financial condition. The loan agreement is guaranteed by second preferred mortgages over the vessels of Diana Containerships' fleet (Note 4(b)). The Company has not
                                      entered into any agreement to mitigate credit risk.

                                

                        

                      

                      

                      

                      
                        
                          	(p)	
                                  Accounting for Revenues
                                        and Expenses: Revenues are generated from time charter agreements and are usually paid fifteen days in advance. Time charter agreements with the same charterer are accounted for as separate agreements
                                      according to the terms and conditions of each agreement. Time charter revenues are recorded over the term of the charter as service is provided. Income representing ballast bonus payments by the charterer to the vessel
                                      owner, if any, is recognized in the period earned. Revenues from time charter agreements providing for varying annual rates over their term are accounted for on a straight line basis.  Compensation due to earlier
                                      redelivery than the minimum period agreed in the charter party is recognized in the period earned. Deferred revenue includes cash received prior to the balance sheet date for which all criteria to recognize as revenue
                                      have not been met. Deferred revenue may also include deferred revenue resulting from charter agreements providing for varying annual rates, which are accounted for on a straight line basis, or the unamortized balance
                                      of the liability associated with the acquisition of second-hand vessels with time charters attached which were acquired at values below fair market value at the date the acquisition agreement is consummated. Voyage
                                      expenses, primarily consisting of commissions, port, canal and bunker expenses that are unique to a particular charter, are paid for by the charterer under time charter arrangements, except for commissions, which are
                                      always paid for by the Company, regardless of charter type and gain or loss from the sale of bunkers on delivery to the time charterers. All voyage and vessel operating expenses are expensed as incurred, except for
                                      commissions. Commissions are deferred over the related voyage charter period to the extent revenue has been deferred since commissions are due as the Company's revenues are earned.

                                

                        

                      

                      

                      

                      
                        F-12

                        
                          

                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      (q) Repairs and Maintenance: All repair and maintenance expenses including underwater inspection expenses are expensed in the year incurred. Such costs are included in vessel operating expenses in the accompanying
                          consolidated statements of operations.

                      

                      

                      (r) Earnings / (loss) per Common Share: Basic earnings / (loss) per common share are computed by dividing net income / (loss) available to common stockholders by the weighted average number of common shares
                          outstanding during the year. Diluted earnings per common share, reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised.

                      

                      

                      (s) Segmental Reporting: The Company has determined that it operates under one reportable segment, relating to its operations of the dry-bulk vessels. The Company reports financial information and evaluates the
                          operations of the segment by charter revenues and not by the length of ship employment for its customers, i.e. spot or time charters. The Company does not use discrete financial information to evaluate the operating results for
                          each such type of charter. Although revenue can be identified for these types of charters, management cannot and does not identify expenses, profitability or other financial information for these charters. As a result, management,
                          including the chief operating decision maker, reviews operating results solely by revenue per day and operating results of the fleet. Furthermore, when the Company charters a vessel to a charterer, the charterer is free to trade
                          the vessel worldwide and, as a result, the disclosure of geographic information is impracticable.

                      

                      

                      (t) Fair Value Measurements: The Company classifies and discloses its assets and liabilities carried at the fair value in one of the following categories:

                      

                      

                      Level 1:     Quoted market prices in active markets for identical assets or liabilities;

                      

                      

                      Level 2:     Observable market based inputs or unobservable inputs that are corroborated by market data;

                      

                      

                      Level 3:     Unobservable inputs that are not corroborated by market data.

                      

                      

                      (u) Share Based Payments: The Company issues restricted share awards which are measured at their grant date fair value and are not subsequently re-measured.  That cost is recognized over the period during which an
                          employee is required to provide service in exchange for the award—the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite
                          service. Forfeitures of awards are accounted for when and if they occur. If an equity award is modified after the grant date, incremental compensation cost will be recognized in an amount equal to the excess of the fair value of
                          the modified award over the fair value of the original award immediately before the modification.

                      

                      

                      (v) Equity method investments: Investments in common stock in entities over which the Company exercises significant influence, but does not exercise control are accounted for by the equity method of accounting. Under
                          this method, the Company records such an investment at cost and adjusts the carrying amount for its share of the earnings or losses of the entity subsequent to the date of investment and reports the recognized earnings or losses
                          in income. Dividends received, if any, reduce the carrying amount of the investment. When the Company's share of losses in an entity accounted for by the equity method equals or exceeds its interest in the entity, the Company does
                          not recognize further losses, unless the Company has made advances, incurred obligations and made payments on behalf of the entity. The Company also evaluates whether a loss in value of an investment that is other than a temporary
                          decline should be recognized. Evidence of a loss in value might include absence of an ability to recover the carrying amount of the investment or inability of the investee to sustain an earnings capacity that would justify the
                          carrying amount of the investment. The Company assessed the financial condition of Diana Containerships (Note 3(a)), the market conditions that could affect its operations in the near future and historical losses of its investment
                          and as a result the Company recorded impairment in 2017 and 2016, which is included in Loss from equity method investments in the accompanying statements of operations.

                      
                        F-13

                        
                          

                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      (w) Going concern: The Company's policy is in accordance with ASU No. 2014-15, "Presentation of Financial Statements - Going Concern", issued in August 2014 by the FASB. ASU 2014-15 provides U.S. GAAP guidance on
                          management's responsibility in evaluating whether there is substantial doubt about a company's ability to continue as a going concern and on related required footnote disclosures. For each reporting period, management evaluates
                          whether there are conditions or events that raise substantial doubt about the Company's ability to continue as a going concern within one year from the date the financial statements are issued.

                      

                      

                      Recent Accounting Pronouncements adopted

                      

                      

                      As of January 1, 2017, the Company adopted ASU No. 2016-15- Statement of Cash Flows
                          Classification of Certain Cash Receipts and Cash Payments and ASU No. 2016-18—Statement of Cash Flows – Restricted Cash.

                      The adoption of ASU No. 2016-15- Statement of Cash Flows Classification of Certain
                          Cash Receipts and Cash Payments did not result in any changes in the classification of cash receipts and cash payments.  The adoption of ASU No. 2016-18—Statement of Cash Flows – Restricted Cash, changed the presentation of
                          restricted cash in cash flow, where amounts generally described as restricted cash and restricted cash equivalents are included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total
                          amounts shown on the statement of cash flows.

                       

                      Recent Accounting Pronouncements not yet adopted

                      

                      

                      In May 2014, FASB issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue
                          from Contracts with Customers", clarifying the method used to determine the timing and requirements for revenue recognition on the statements of income. Under the new standard, an entity must identify the performance obligations
                          in a contract, the transaction price and allocate the price to specific performance obligations to recognize the revenue when the obligation is completed. The amendments in this update also require disclosure of sufficient
                          information to allow users to understand the nature, amount, timing and uncertainty of revenue and cash flow arising from contracts. In August 2015, FASB issued ASU No. 2015-14 "Revenue from Contracts with Customers (Topic 606):
                          Deferral of the Effective Date," which deferred the effective date of ASU 2014-09 for all entities by one year. The standard will be effective for public entities for annual reporting periods beginning after December 15, 2017 and
                          interim periods therein.  In May and April 2016, the FASB issued two Updates with respect to Topic 606: ASU 2016-10, "Revenue from Contracts with
                            Customers (Topic 606): Identifying Performance Obligations and Licensing" and ASU 2016-12, "Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients." The Company has
                          evaluated the impact of the standard after reviewing historical contracts and has determined that all of the Company's agreements are considered leases. Certain non-lease components which are required to be assessed according to
                          this standard, may only affect presentation and disclosures and not the way revenue is recognized.

                      

                      

                      

                      

                      
                        F-14

                        
                          

                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      In February 2016, the FASB issued ASU No. 2016-02, Leases (ASC 842), which requires
                          lessees to recognize most leases on the balance sheet. This is expected to increase both reported assets and liabilities. The new lease standard does not substantially change lessor accounting. For public companies, the standard
                          will be effective for the first interim reporting period within annual periods beginning after December 15, 2018, although early adoption is permitted. Lessees and lessors will be required to apply the new standard at the
                          beginning of the earliest period presented in the financial statements in which they first apply the new guidance, using a modified retrospective transition method. The requirements of this standard include a significant increase
                          in required disclosures. The Company is analyzing the impact of the adoption of this guidance on the Company's consolidated financial statements, including assessing changes that might be necessary to information technology
                          systems, processes and internal controls to capture new data and address changes in financial reporting.

                      

                      

                      In May 2017, the FASB issued ASU 2017-09, "Compensation — Stock Compensation (Topic
                          718), Scope of Modification Accounting" ("ASU 2017-09"), which clarifies and reduces both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation—Stock Compensation, to a change
                          to the terms or conditions of a share-based payment award. ASU 2017-09 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2017, however early adoption is permitted.
                          The Company does not expect that the adoption of ASU 2017-09 will have a material effect in the Company's financial statements.

                      

                      

                      In June 2016, the FASB issued ASU No. 2016-13– Financial Instruments – Credit Losses
                          (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities.  For public entities, the
                          amendments of this Update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early application is permitted. The Company does not expect that the adoption of ASU
                          2016-13 will have a material effect in the Company's financial statements.

                      

                      

                      3.  Investments in related parties

                      
                        
                          	a)	
                                  Diana Containerships
                                        Inc., or Diana Containerships: As at December 31, 2016, DSI owned 25.73% of the common stock of Diana Containerships amounting to $5,815 and included in "Investments in related parties" in the accompanying
                                      consolidated balance sheets. As at December 31, 2017, the investment was reduced to zero following the gradual sales during the year of all Diana Containerships' common stock previously owned by the Company.

                                

                        

                      

                      

                      

                      For 2017, 2016, and 2015, the investment in Diana Containerships
                          resulted in loss of $5,656, $56,465, and $4,977, respectively, of which $3,124, $17,568 and $0, respectively was impairment, which was recorded based on Diana Containerships' market value on Nasdaq at the date of each impairment
                          charge recognition. The loss and impairment are included in "Loss from equity method investments" in the accompanying consolidated statements of operations. Additionally, for 2017, Loss from equity method investments also includes
                          $757 loss from the sale of the shares discussed above. For 2017, 2016, and 2015, DSI received dividends from Diana Containerships amounting to $0, $96 and $193, respectively.

                      

                      

                      On May 30, 2017, the company acquired 100 shares of
                          newly-designated Series C Preferred Stock, par value $0.01 per share, of Diana Containerships for $3,000 in exchange for a reduction of an equal amount in the principal amount of the Company's outstanding loan to Diana
                          Containerships (Note 4(b)). The Series C Preferred Stock has no dividend or liquidation rights. The Series C Preferred Stock votes with the common shares of Diana Containerships, if any, and each share of the Series C Preferred
                          Stock entitles the holder thereof to up to 250,000 votes, subject to a cap such that the aggregate voting power of any holder of Series C Preferred Stock together with its affiliates does not exceed 49.0%, on all matters submitted
                          to a vote of the stockholders of Diana Containerships. The acquisition of shares of Series C Preferred Stock was approved by an independent committee of the Board of Directors of the Company. As at December 31, 2017, the $3,000 is
                          also included in "Investments in related parties" in the accompanying 2017 consolidated balance sheet accounted for at cost less impairment, if any.

                      

                      

                      
                        F-15

                        
                          

                      

                      

                      

                      

                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      
                        
                          	b)	
                                  Diana Wilhelmsen
                                        Management Limited, or DWM: DWM is a joint venture which was established on May 7, 2015 by Diana Ship Management Inc., a wholly owned subsidiary of DSI, and Wilhelmsen Ship Management Holding Limited, an
                                      unaffiliated third party, each holding 50% of DWM. As at December 31, 2017, DWM provided management services to ten vessels of the Company's fleet (Note 4(d)). The DWM office is located in Limassol, Cyprus. As at
                                      December 31, 2017 and 2016, the investment in DWM amounted to $249 and $199, respectively, and is included in "Investments in related parties" in the accompanying consolidated balance sheets. For 2017, 2016, and 2015,
                                      the investment in DWM resulted in gain of $49, $88, and loss of $156, respectively, included in "Loss from equity method investments" in the accompanying consolidated statements of operations.

                                

                        

                      

                      

                      

                      4. Transactions with Related Parties

                      

                      

                      
                        
                          	(a)	
                                  Altair Travel Agency
                                        S.A. ("Altair"): The Company uses the services of an affiliated travel agent, Altair, which is controlled by the Company's CEO and Chairman of the Board. Travel expenses for 2017, 2016 and 2015 amounted to
                                      $2,096, $2,320, and $2,685, respectively, and are mainly included in "Vessels, net book value", "Advances for vessels under construction and acquisitions and other vessel costs", "Vessel operating expenses" and
                                      "General and administrative expenses" in the accompanying consolidated financial statements.  At December 31, 2017 and 2016, an amount of $162 and $23, respectively, was payable to Altair and is included in "Due to
                                      related parties" in the accompanying consolidated balance sheets.

                                

                        

                      

                      

                      

                      
                        
                          	(b)	
                                  Diana Containerships
                                        Inc.: On May 20, 2013, the Company entered into a five year unsecured loan of $50,000 with a subsidiary of Diana Containerships, drawn on August 20, 2013, for general corporate purposes and working capital.
                                      The loan, initially bore interest at LIBOR plus a margin of 5% and a back-end fee equal to 1.25% per annum on the outstanding amount of the loan payable by the borrower on the repayment date of the loan. Following an
                                      amendment on September 9, 2015, the interest was reduced to LIBOR plus a margin of 3% per annum, the back-end fee which was paid on the date of the amendment was eliminated, and a fixed fee of $200 was to be payable on
                                      the maturity date. In addition, the borrower agreed to repay the principal amount of the loan on the last day of each interest period in amounts totalling $5,000 per annum, but not to exceed $32,500 in the aggregate.
                                      Following another amendment on August 24, 2016, the repayment of all outstanding principal amounts was deferred until a later date, the borrower was changed to another wholly-owned subsidiary of Diana Containerships
                                      and the interest rate of the deferral period increased to 3.35% per annum over LIBOR. On May 30, 2017, as discussed in Note 3(a), the loan was decreased by $3,000, in order to acquire the Series C Preferred Stock
                                      issued by Diana Containerships.

                                

                        

                      

                      

                      

                      On June 30, 2017, DSI entered into an agreement with Diana
                          Containerships to refinance the above loan, amounting to $42,417 at that date, with a loan facility of $82,617, which reflects an additional loan amount to Diana Containerships of $40,000 and the $200 fixed fee of the previous
                          loan which became payable on the termination date of the previous agreement and has been included in "Interest and other income" in the accompanying statements of operations. The loan also provides for an additional $5,000
                          interest-bearing discount premium payable on the termination date, unless the lender demands earlier prepayment on or after the first anniversary of the drawdown of the loan, in which case the discount premium is waived. The loan
                          matures in eighteen months from its date of signing, or December 31, 2018, and bears interest at the rate of 6% per annum for the first twelve months, scaled to 9% for the next three months, and further scaled to 12% for the
                          remaining three months of the loan. The loan facility is secured by second preferred mortgages on Diana Containerships' vessels and includes financial and other covenants. Additionally, Diana Containerships is required to prepay
                          the loan with any proceeds received from equity offerings, loan refinancings and vessel sales, according to the terms of the loan agreement. The loan is subordinated to the loan of Diana Containerships with another lender.

                      

                      

                      
                        F-16

                        
                          

                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      As at December 31, 2017 the outstanding balance of the loan and interest due from
                          Diana Containerships amounted to $82,660 and is separately presented in "Due from related parties, current" in the related accompanying consolidated balance sheet (Note 14(c)). This amount does not include the additional $5,000
                          interest-bearing discount premium, which is payable on the termination date (Note 8(b)). As at December 31, 2016, there was an amount of $102 and $45,417 presented in Due from related parties, current and non- current,
                          respectively.

                      

                      

                      For 2017, 2016 and 2015, interest and other income amounted to $3,855, $1,692, and
                          $2,745, respectively, and is included in "Interest and other income" in the accompanying consolidated statements of operations.

                      

                      

                      
                        
                          	(c)	
                                  Diana Enterprises Inc.
                                        renamed to Steamship Shipbroking Enterprises Inc., or Steamship: Steamship is a company controlled by the Company's CEO and Chairman of the Board which provides brokerage services to DSI pursuant to a
                                      Brokerage Services Agreement for a fixed fee amended annually on each anniversary of the agreement. For 2017, 2016 and 2015, brokerage fees amounted to $1,800, $1,680, and $1,302, respectively, and are included in
                                      "General and administrative expenses" in the accompanying consolidated statements of operations. As of December 31, 2017 and 2016, there was no amount due to Steamship included in the accompanying consolidated balance
                                      sheets.

                                

                        

                      

                      

                      

                      
                        
                          	(d)	
                                  Diana Wilhelmsen
                                        Management Limited: As of December 31, 2017, DWM provided management services to ten vessels of the Company's fleet for a fixed monthly fee and commercial services charged as a percentage of the vessels'
                                      gross revenues. Management fees for 2017, 2016 and 2015 amounted to $1,883, $1,464, and $405, respectively, and are separately presented as "Management fees to related party" in the accompanying consolidated statements
                                      of operations, whereas commercial fees amounted to $260, $124, and $43, respectively, and are included in "Voyage expenses" in the accompanying consolidated statements of operations. As at December 31, 2017 and 2016
                                      there was an amount of $109 and $2, respectively, due to DWM, included in "Due to related parties" in the accompanying consolidated balance sheets.

                                

                        

                      

                      

                      

                      
                        
                          	(e)	
                                  Vessel Acquisitions: On
                                      February 4, 2016, the Company, through three separate wholly-owned subsidiaries, entered into three Memoranda of Agreement to acquire from a related party three Panamax vessels for an aggregate purchase price of
                                      $39,265. The Company had agreed to acquire the vessels from entities affiliated with Mrs. Semiramis Paliou and Mrs. Aliki Paliou, each of whom is a family member of the Company's Chief Executive Officer and Chairman of
                                      the Board. Mrs. Semiramis Paliou is also a director of the Company. The transaction was approved unanimously by a committee of the Board of Directors established for the purpose of considering the transaction and
                                      consisting of the Company's independent directors and each of its executive directors other than Mrs. Semiramis Paliou and Mr. Simeon Palios. The agreed upon purchase price of the vessels was based, among other
                                      factors, on independent third party broker valuations obtained by the Company. Two of the vessels were delivered in March 2016 and the third was delivered in May 2016 (Note 5).

                                

                        

                      

                      

                      

                      
                        F-17

                        
                          

                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      5. Vessels, net book value

                      

                      

                      The amounts in the accompanying consolidated balance sheets are analyzed as follows:

                      

                      

                      	
                               

                            	
                               

                            	
                              Vessel Cost

                            	
                               

                            	
                               

                            	
                              Accumulated Depreciation

                            	
                               

                            	
                               

                            	
                              Net Book Value

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Balance, December 31, 2015

                            	
                               

                            	
                              $

                            	
                              1,947,992

                            	
                               

                            	
                               

                            	
                              $

                            	
                              (507,189

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              1,440,803

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              - Acquisitions, improvements and other vessel costs

                            	
                               

                            	
                               

                            	
                              39,427

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              39,427

                            	
                               

                            
	
                              - Depreciation for the year

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (76,318

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (76,318

                            	
                              )

                            
	
                              Balance, December 31, 2016

                            	
                               

                            	
                              $

                            	
                              1,987,419

                            	
                               

                            	
                               

                            	
                              $

                            	
                              (583,507

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              1,403,912

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              - Transfer from advances for vessels under construction and acquisition and other vessel costs

                            	
                               

                            	
                               

                            	
                              104,858

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              104,858

                            	
                               

                            
	
                              - Acquisitions, improvements and other vessel costs

                            	
                               

                            	
                               

                            	
                              67,787

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              67,787

                            	
                               

                            
	
                              - Vessel disposal

                            	
                               

                            	
                               

                            	
                              (15,349

                            	
                              )

                            	
                               

                            	
                               

                            	
                              12,834

                            	
                               

                            	
                               

                            	
                               

                            	
                              (2,515

                            	
                              )

                            
	
                              - Impairment charges

                            	
                               

                            	
                               

                            	
                              (877,484

                            	
                              )

                            	
                               

                            	
                               

                            	
                              438,573

                            	
                               

                            	
                               

                            	
                               

                            	
                              (438,911

                            	
                              )

                            
	
                              - Depreciation for the year

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (81,553

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (81,553

                            	
                              )

                            
	
                              Balance, December 31, 2017

                            	
                               

                            	
                              $

                            	
                              1,267,231

                            	
                               

                            	
                               

                            	
                              $

                            	
                              (213,653

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              1,053,578

                            	
                               

                            

                      

                      

                      On February 4, 2016, the Company acquired the vessels Ismene, Selina and Maera for an aggregate purchase price of $39,265. Ismene
                          and Selina were delivered in March 2016 and the Maera was delivered in May 2016.

                      

                      

                      On October 31, 2016, Houk Shipping Company Inc. provided a notice of cancellation of
                          the shipbuilding contract pursuant to its right under the contract to cancel the contract due to a delay in delivery and to claim a refund of the pre-delivery installments and interest, amounting to $9,413, which the Company
                          received in December 2016.

                      

                      

                      On January 4, 2017, the Company took delivery of Hull H2548 named San Francisco, and Hull
                          H2549 named Newport News, which were under construction until then for an aggregate contract price of $95,400. As at December
                          31, 2016, advances for the construction and other vessel costs amounted to $46,863 and are separately presented in the related consolidated balance sheet.

                      

                      

                      In April 2017, the Company acquired the vessels Astarte, Electra and Phaidra from unaffiliated third party sellers for an aggregate purchase price of $67,250. All three vessels were delivered in May 2017.

                      

                      

                      On July 25, 2017, the Melite run aground at Pulau Laut, Indonesia. Following this incident, on September 21, 2017, the owners served a notice of frustration of the voyage to the time-charterers and a notice
                          of abandonment to the H&M and IV insurers as it was considered that the extent of damages and the estimated cost of repairs were such that the vessel constituted a constructive total loss. As of September 30, 2017, the
                          vessel's net book value was reduced to its scrap value of $2,515 resulting in an impairment of $19,807 which is included in "Impairment loss", in the 2017 accompanying consolidated statement of operations. The vessel, which was
                          insured for a value of $14,000 to H&M insurers, was sold to an unrelated third party at the recorded price in October 2017, and in November 2017, the Company received the balance of the insured value of the vessel amounting to
                          $11,528, which is included in "Insurance recoveries, net of other loss" in the accompanying statement of operations.

                      

                      

                      
                        F-18

                        
                          

                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      As at December 31, 2017, the Company's estimated undiscounted projected net operating
                          cash flows, excluding interest charges, expected to be generated by the use of certain vessels over their remaining useful lives and their eventual disposition was less than their carrying amount.  During the last quarter of 2017,
                          the Company's management considered various factors, including the recovery of the market, the worldwide demand for dry-bulk products, supply of tonnage and order book and concluded that the charter rates for the years 2008-2010
                          are extraordinary. In this respect the Company's management decided to exclude from the 10-year average of 1 year time charters these three years for which the rates were well above the average and which were not considered
                          sustainable for the foreseeable future. The Company performed the exercise discussed above which resulted to recording an impairment on certain vessels' carrying value (Note 2). Accordingly, the Company recognized an aggregate
                          impairment loss of $422,466, which is included in "Impairment loss" in the 2017 accompanying consolidated statement of operations of which $3,362 was recognized in "Deferred charges, net". The change in the assumption resulted to
                          an increased impairment loss, net loss and net loss attributed to common stockholders of $287,074, or $3.0 loss per share. The fair value of the vessels was determined through Level 2 inputs of the fair value hierarchy by taking
                          into consideration third party valuations which were based on last done deals of sale of vessels with similar characteristics, such as type, size and age.

                      

                      

                      6. Property and equipment, net

                      

                      

                      The amounts in the accompanying consolidated balance sheets are analyzed as follows:

                      

                      

                      	
                               

                            	
                               

                            	
                              Property and Equipment

                            	
                               

                            	
                               

                            	
                              Accumulated Depreciation

                            	
                               

                            	
                               

                            	
                              Net Book Value

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Balance, December 31, 2015

                            	
                               

                            	
                              $

                            	
                              26,365

                            	
                               

                            	
                               

                            	
                              $

                            	
                              (2,876

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              23,489

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              - Additions in property and equipment

                            	
                               

                            	
                               

                            	
                              217

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              217

                            	
                               

                            
	
                              - Depreciation for the year

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (592

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (592

                            	
                              )

                            
	
                              Balance, December 31, 2016

                            	
                               

                            	
                              $

                            	
                              26,582

                            	
                               

                            	
                               

                            	
                              $

                            	
                              (3,468

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              23,114

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              - Additions in property and equipment

                            	
                               

                            	
                               

                            	
                              104

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              104

                            	
                               

                            
	
                              - Depreciation for the year

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (568

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (568

                            	
                              )

                            
	
                              - Disposal of assets

                            	
                               

                            	
                               

                            	
                              (3

                            	
                              )

                            	
                               

                            	
                               

                            	
                              3

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            
	
                              Balance, December 31, 2017

                            	
                               

                            	
                              $

                            	
                              26,683

                            	
                               

                            	
                               

                            	
                              $

                            	
                              (4,033

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              22,650

                            	
                               

                            

                      

                      

                      7.   Long-term debt, current and non-current

                      

                      

                      The amount of long-term debt shown in the accompanying consolidated balance sheets is
                          analyzed as follows:

                      

                      

                      	
                               

                            	
                               

                            	
                              2017

                            	
                               

                            	
                               

                            	
                              2016

                            	
                               

                            
	
                              8.5% Senior Unsecured Notes

                            	
                               

                            	
                               

                            	
                              63,250

                            	
                               

                            	
                               

                            	
                               

                            	
                              63,250

                            	
                               

                            
	
                              Secured Term Loans

                            	
                               

                            	
                               

                            	
                              541,543

                            	
                               

                            	
                               

                            	
                               

                            	
                              539,467

                            	
                               

                            
	
                              Total debt outstanding

                            	
                               

                            	
                              $

                            	
                              604,793

                            	
                               

                            	
                               

                            	
                              $

                            	
                              602,717

                            	
                               

                            
	
                              Less related deferred financing costs

                            	
                               

                            	
                               

                            	
                              (3,409

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (4,536

                            	
                              )

                            
	
                              Total debt, net of deferred financing costs

                            	
                               

                            	
                              $

                            	
                              601,384

                            	
                               

                            	
                               

                            	
                              $

                            	
                              598,181

                            	
                               

                            
	
                              Less: Current portion of long term debt, net of deferred financing costs current

                            	
                               

                            	
                               

                            	
                              (60,763

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (65,072

                            	
                              )

                            
	
                              Long-term debt, net of current portion and deferred financing costs, non-current

                            	
                               

                            	
                              $

                            	
                              540,621

                            	
                               

                            	
                               

                            	
                              $

                            	
                              533,109

                            	
                               

                            

                      

                      

                      
                        F-19

                        
                          

                      

                      

                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      8.5% Unsecured Senior Notes: On May 20, 2015, the Company offered $63,250 aggregate principal amount of 8.5% Senior Notes due 2020 (the "Notes"), including an overallotment, at the
                          price of $25.0 per Note, pursuant to an approval obtained by a special committee of the Board of Directors. As part of the offering, the underwriters sold $12,750 aggregate principal amount of the Notes to, or to entities
                          affiliated with, the Company's chief executive officer, Mr. Simeon Palios, and other executive officers and certain directors of the Company at the public offering price. The proceeds, net of underwriting discount and offering
                          expenses, amounting to $61,180, are included in "Long-term debt, net of deferred financing costs, non-current" in the accompanying consolidated balance sheets. As of May 29, 2015, the Notes are trading on the NYSE under the ticker
                          symbol "DSXN".

                      

                      

                      The Notes bear interest from May 28, 2015 at a rate of 8.5% per year and will mature
                          on May 15, 2020. Interest is payable quarterly in arrears on the 15th day of February, May, August and November of each year, commencing on August 15, 2015. Since May 15, 2017, the Company may redeem the Notes at its option, in
                          whole or in part, at any time, at a redemption price equal to 100% of the principal amount to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. The Notes include financial and other covenants,
                          including maximum net borrowings and minimum tangible net worth.

                      

                      

                      Secured Term Loans: The Company, through its subsidiaries, has entered into various long term loan
                            agreements with bank institutions to partly finance or, as the case may be, refinance part of the acquisition cost of certain of its fleet vessels. The loan agreements are repayable in quarterly or semi-annual installments plus
                            one balloon installment per loan agreement to be paid together with the last installment and bear interest at LIBOR plus margin ranging from 1% to 3%. Their maturities range from January 2019 to March 2032. For 2017 and 2016,
                            the weighted average interest rates of the secured term loans were 3.38% and 2.79%, respectively.

                      

                      

                      As at December 31, 2017, the Company had the following agreements with banks:

                      

                      

                      On October 22, 2009, the Company, through a wholly-owned subsidiary, entered into a
                          $40,000 loan agreement with Bremer Landesbank ("Bremer") to partly finance the acquisition cost of the Houston. The loan is
                          repayable in 40 quarterly installments of $900 each plus one balloon installment of $4,000 to be paid together with the last installment on November 12, 2019. The loan bears interest at LIBOR plus a margin of 2.15% per annum.

                      

                      

                      On October 2, 2010, the Company, through two wholly-owned subsidiaries, entered into a
                          loan agreement with Export-Import Bank of China ("CEXIM Bank") and DnB NOR Bank ASA ("DnB") to finance part of the construction cost of the Los Angeles and the Philadelphia, for an amount of up to $82,600, of which $72,100 was drawn on delivery.
                          The Lae advance is repayable in 40 quarterly installments of approximately $628 each and a balloon of $12,332 payable together with the last installment on February 15, 2022. The Namu advance is repayable in 40 quarterly
                          installments of approximately $581 each and a balloon of $11,410 payable together with the last installment on May 18, 2022. Pursuant to an amendment of the loan agreement dated May 18, 2017, each of the individual banks are
                          allowed to demand repayment in full of such bank's contribution in any or all advances on August 16, 2019. If one or more banks (acting through the agent) exercise such right in respect of an advance, the borrowers shall be
                          obliged to repay each such bank's contribution in that advance in full on such date. The loan bears interest at LIBOR plus a margin of 2.50% per annum.

                      

                      

                      
                        F-20

                        
                          

                      

                      

                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      On September 13, 2011, the Company through one wholly-owned subsidiary entered into a
                          loan agreement with Emporiki Bank of Greece S.A. ("Emporiki") for a loan of up to $15,000 to refinance part of the acquisition cost of the Arethusa. On December 13, 2012, Bikar, the Company, DSS and Credit Agricole Corporate and
                          Investment Bank ("Credit Agricole") entered into a supplemental loan agreement to transfer the outstanding loan balance, the ISDA master swap agreement and the existing security documents from Emporiki to Credit Agricole. The loan
                          is repayable in 20 equal semiannual installments of $500 each and a balloon payment of $5,000 to be paid together with the last installment on September 15, 2021. The loan bears interest at LIBOR plus a margin of 2.5% per annum,
                          or 1% for such loan amount that is equivalently secured by cash pledge in favor of the bank.

                      

                      

                      On May 24, 2013, the Company through two wholly-owned subsidiaries entered into a loan
                          agreement with CEXIM Bank and DnB to finance part of the construction cost of Crystalia and Atalandi for an amount of up to $15,000 for each vessel, drawn on May 22, 2014. Each advance is repayable in 19 quarterly installments of $250 each and a
                          balloon of $10,250 payable together with the last installment on February 22, 2019. The loan bears interest at LIBOR plus a margin of 3.0% per annum.

                      

                      

                      On January 9, 2014, the Company through two wholly-owned subsidiaries entered into a
                          loan agreement with Commonwealth Bank of Australia, London Branch, for a loan facility of up to $18,000 to finance part of the acquisition cost of the Melite and Artemis. The loan bears interest at LIBOR plus a margin of 2.25%. The loan was drawn
                          in two tranches, one of $8,500 assigned to Melite and one of $9,500 assigned to Artemis. Tranche A was repayable in 24 equal consecutive quarterly installments of $196 each; and a balloon of $3,800 payable on January 13, 2020. As a result of the
                          grounding incident of the Melite mentioned in Note 5 and the subsequent sale of the vessel, the respective loan balance was
                          repaid in full in October 2017. Tranche B is repayable in 32 equal consecutive quarterly installments of $156 each and a balloon of $4,500 payable on January 13, 2022.

                      

                      

                      On December 18, 2014, the Company through two wholly-owned subsidiaries entered into a
                          loan agreement with BNP Paribas ("BNP"), for a loan facility of up to $55,000 to finance part of the acquisition cost of the G. P. Zafirakis and the P. S. Palios,
                          of which $53,500 was drawn. The loan bears interest at LIBOR plus a margin of 2%, and is repayable in 14 equal semi-annual installments of approximately $1,574 and a balloon of $31,466 payable on November 30, 2021.

                      

                      

                      On March 17, 2015, the Company, through eight separate wholly-owned subsidiaries,
                          entered into a loan agreement with Nordea Bank AB, London Branch, for a secured term loan facility of up to $110,000, to refinance the existing indebtedness with the bank and for general corporate and working capital purposes. On
                          March 19, 2015, the Company drew down $93,080 and repaid the then existing indebtedness with the bank amounting to $38,345. The loan is repayable in 24 equal consecutive quarterly installments of about $1,862 each and a balloon of
                          about $48,402 payable together with the last installment on March 19, 2021. The loan bears interest at LIBOR plus a margin of 2.1%.

                      

                      

                      On March 26, 2015, the Company, through three wholly-owned subsidiaries, entered into
                          a loan agreement with ABN AMRO Bank N.V. for a secured term loan facility of up to $53,000, to refinance part of the acquisition cost of the vessels New York, Myrto and Maia. On March 30, 2015, the Company drew down the amount of $50,160 under the loan facility, which is repayable in 24 equal consecutive quarterly installments of about $994 each and a balloon
                          of $26,310 payable together with the last installment on March 30, 2021. The loan bears interest at LIBOR plus a margin of 2.0%.

                      

                      

                      On April 29, 2015, the Company, through one wholly-owned subsidiary, entered into a
                          term loan agreement with Danish Ship Finance A/S for a loan facility of $30,000, drawn on April 30, 2015 to partly finance the acquisition cost of the Santa Barbara, which was delivered in January 2015. The loan is repayable in 28 equal consecutive quarterly installments of $500 each and a balloon of $16,000 payable together with the last
                          installment on April 30, 2022. The loan bears interest at LIBOR plus a margin of 2.15%.

                      

                      

                      
                        F-21

                        
                          

                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      On July 22, 2015, the Company entered into a term loan agreement with BNP Paribas for
                          a loan of $165,000 drawn on July 24, 2015. The loan is repayable in 20 consecutive quarterly installments, the first eight installments in an amount of $2,500 each, followed by four installments in an amount of $5,000 each; eight
                          installments in an amount of $7,000 each; and a balloon installment of $69,000 payable together with the last installment on July 24, 2020.The loan bears interest at LIBOR plus a margin of 2.35% per annum for the first two years;
                          2.3% per annum for the third year and 2.25% per annum until the final maturity of the loan.

                      

                      

                      On September 30, 2015, the Company, through two wholly-owned subsidiaries, entered
                          into a term loan agreement with ING Bank N.V. for a loan of up to $39,683, available in two advances to finance part of the acquisition cost of the New Orleans and the Medusa. Advance A of $27,950 was drawn on November 19, 2015 and is
                          repayable in 28 consecutive quarterly installments of about $466 each and a balloon installment of about $14,907 payable together with the last installment on November 19, 2022. Advance B of $11,733 was drawn on October 6, 2015
                          and is repayable in 28 consecutive quarterly installments of about $293 each and a balloon installment of about $3,520 payable together with the last installment on October 6, 2022. The loan bears interest at LIBOR plus a margin
                          of 1.65%.

                      

                      

                      On January 7, 2016, the Company, through three wholly-owned subsidiaries, entered into
                          a secured loan agreement with the Export-Import Bank of China for a loan of up to $75,735 in order to finance part of the construction cost of Newport News, San Francisco (Note 5) and Hull DY6006. The tranche for Hull DY6006, whose shipbuilding contract was cancelled on October 31, 2016, was cancelled and on February 6, 2017, pursuant to a Deed of Release with
                          the bank the owner of Hull DY6006 was released of all of its obligations under the loan agreement as borrower. On January 4,
                          2017, the Company drew down $57,240. The loan is repayable in 60 equal quarterly instalments of $954 each by March 12, 2032 and bears interest at LIBOR plus a margin of 2.3%.

                      

                      

                      On March 29, 2016, the Company, through two wholly-owned subsidiaries, entered into a
                          term loan agreement with ABN AMRO Bank N.V. for a loan of $25,755, drawn on March 30, 2016, to finance the acquisition cost of the Selina
                          and the Ismene. The loan is payable in eight consecutive quarterly installments of $855 each and a balloon installment of
                          $18,915 payable together with the last installment by June 30, 2019. The first repayment installment was repaid on September 30, 2017. The loan bears interest at LIBOR plus a margin of 3%.

                      

                      

                      On May 10, 2016, the Company, through one wholly-owned subsidiary, entered into a term
                          loan agreement with DNB Bank ASA and the Export-Import Bank of China for a loan of $13,510, drawn on the same date, being the purchase price of the Maera. The loan is payable in seven equal consecutive quarterly installments of about $20 each, four equal consecutive quarterly installments of about $283 and a balloon of about $12,242 payable
                          together with the last installment on January 4, 2019. The loan bears interest at LIBOR plus a margin of 3% per annum. According to the terms of the loan agreement, the Company will prepay an additional amount of $289 in the first
                          quarter of 2018, which will be deducted from the balloon, and which is included in "Current portion of long term debt, net of deferred financing costs, current".

                      

                      

                      Under the secured term loans outstanding as of December 31, 2017, 46 vessels of the
                          Company's fleet are mortgaged with first preferred or priority ship mortgages, having an aggregate carrying value of $968,083. Additional securities required by the banks include first priority assignment of all earnings,
                          insurances, first assignment of time charter contracts that exceed a certain period, pledge over the shares of the borrowers, manager's undertaking and subordination and requisition compensation and either a corporate guarantee by
                          DSI (the "Guarantor") or a guarantee by the ship owning companies (where applicable), financial covenants, as well as operating account assignments. The lenders may also require additional security in the future in the event the
                          borrowers breach certain covenants under the loan agreements. The secured term loans generally include restrictions as to changes in management and ownership of the vessels, additional indebtedness, as well as minimum requirements
                          regarding hull cover ratio and minimum liquidity per vessel owned by the borrowers, or the guarantor, maintained in the bank accounts of the borrowers, or the guarantor. As at December 31, 2017 and 2016, the restricted cash, which
                          relates to minimum cash deposits required to be maintained at all times under the Company's loan facilities, amounted to $25,000 and $23,000, respectively and is included in "Restricted cash" in the accompanying consolidated
                          balance sheets. Furthermore, the secured term loans contain cross default provisions and additionally the Company is not permitted to pay any dividends following the occurrence of an event of default.

                      

                      

                      
                        F-22

                        
                          

                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      As at December 31, 2017, the Company was in compliance with all of its loan covenants.

                      

                      

                      As at December 31, 2016, the Company was not in compliance with the minimum security
                          cover requirement of its loan agreement with BNP Paribas dated July 22, 2015. The shortfall was estimated by the Company to be $25,650 and an amount of $19,731, representing the amount which would have to be paid to the bank, was
                          reclassified from non-current debt to the "Current portion of long-term debt, net of deferred financing costs, current" in the 2016 accompanying consolidated balance sheet.

                      

                      

                      The maturities of the Company's debt facilities described above, as at December 31,
                          2017, and throughout their term, are shown in the table below. The table does not include the right of each of the lenders of a secured term loan to demand prepayment of their advance in August 2019 of the then outstanding balance
                          of such advance, subject to a written notification:

                      	
                              Period

                            	
                               

                            	
                              Principal Repayment

                            	
                               

                            
	
                              January 1, 2018 to December 31, 2018

                            	
                               

                            	
                              $

                            	
                              62,059

                            	
                               

                            
	
                              January 1, 2019 to December 31, 2019

                            	
                               

                            	
                               

                            	
                              119,342

                            	
                               

                            
	
                              January 1, 2020 to December 31, 2020

                            	
                               

                            	
                               

                            	
                              183,132

                            	
                               

                            
	
                              January 1, 2021 to December 31, 2021

                            	
                               

                            	
                               

                            	
                              132,494

                            	
                               

                            
	
                              January 1, 2022 to December 31, 2022

                            	
                               

                            	
                               

                            	
                              72,468

                            	
                               

                            
	
                              January 1, 2023 and thereafter

                            	
                               

                            	
                               

                            	
                              35,298

                            	
                               

                            
	
                              Total

                            	
                               

                            	
                              $

                            	
                              604,793

                            	
                               

                            

                      

                      

                      8. Commitments and Contingencies

                      
                        
                          	

                                	a)	
                                  Various claims, suits, and complaints, including those involving government regulations and product liability, arise in the ordinary course
                                      of the shipping business. In addition, losses may arise from disputes with charterers, agents, insurance and other claims with suppliers relating to the operations of the Company's vessels. The Company accrues for the
                                      cost of environmental and other liabilities when management becomes aware that a liability is probable and is able to reasonably estimate the probable exposure.

                                

                        

                      

                      

                      

                      The Company's vessels are covered for pollution in the amount of
                          $1 billion per vessel per incident, by the P&I Association in which the Company's vessels are entered. The Company's vessels are subject to calls payable to their P&I Association and may be subject to supplemental calls
                          which are based on estimates of premium income and anticipated and paid claims. Such estimates are adjusted each year by the Board of Directors of the P&I Association until the closing of the relevant policy year, which
                          generally occurs within three years from the end of the policy year. Supplemental calls, if any, are expensed when they are announced and according to the period they relate to. During 2016, the Company was notified by one of its
                          P&I Clubs of supplemental calls with respect to the 2015 policy year which however were immaterial and were expensed in the 2016 consolidated statement of operations.

                      

                      

                      
                        
                          	

                                	b)	
                                  Pursuant to the loan agreement with Diana Containerships Inc. dated June 30, 2017 (Note 4(b)), Diana Containerships is required to pay, on
                                      the termination date of the loan, an additional $5,000 interest-bearing discount premium, which is not included in Due from related parties in the accompanying 2017 balance sheet.

                                

                        

                      

                      

                      

                      
                        
                          	

                                	c)	
                                  As at December 31, 2017, all of the Company's vessels were fixed under time charter agreements. The minimum contractual gross charter
                                      revenue expected to be generated from fixed and non-cancelable time charter contracts existing as at December 31, 2017 and until their expiration was as follows:

                                

                        

                      

                      	
                              Period

                            	
                               

                            	
                              Amount

                            	
                               

                            
	
                              Year 1

                            	
                               

                            	
                              $

                            	
                              95,851

                            	
                               

                            
	
                              Year 2

                            	
                               

                            	
                               

                            	
                              10,129

                            	
                               

                            
	
                                 Total

                            	
                               

                            	
                              $

                            	
                              105,980

                            	
                               

                            

                      

                      

                      
                        F-23

                        
                          

                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      9. Capital Stock and Changes in Capital Accounts

                      

                      

                      
                        
                          	

                                	(a)	
                                  Preferred stock: As at December 31, 2017 and 2016, the Company's authorized preferred stock consists of 25,000,000 shares (all in
                                      registered form) of preferred stock, par value $0.01 per share, of which 1,000,000 are designated as Series A Participating Preferred Shares and 5,000,000 are designated as Series B Preferred Shares.

                                

                        

                      

                      

                      

                      As at December 31, 2017 and 2016, the Company had 2,600,000 Series
                          B Preferred Shares issued and outstanding with par value $0.01 per share, at $25.00 per share and with liquidation preference at $25.00 per share and zero Series A Participating Preferred Shares issued and outstanding. Holders of
                          series B preferred shares have no voting rights other than the ability, subject to certain exceptions, to elect one director if dividends for six quarterly dividend periods (whether or not consecutive) are in arrears and certain
                          other limited protective voting rights. Also, holders of series B preferred shares, rank prior to the holders of common shares with respect to dividends, distributions and payments upon liquidation.

                      

                      

                      Dividends on the Series B preferred shares are cumulative from the
                          date of original issue and are payable on the 15th day of January, April, July and October of each year at the dividend rate of 8.875% per annum, or $2.21875 per share per annum. For 2017, 2016, and 2015, dividends on Series B
                          preferred shares amounted to $5,769. At any time on or after February 14, 2019, the Company may redeem, in whole or in part, the series B preferred shares at a redemption price of $25.00 per share plus an amount equal to all
                          accumulated and unpaid dividends thereon to the date of redemption, whether or not declared.

                      

                      

                      
                        
                          	

                                	(b)	
                                  Common Stock: The
                                      Company's authorized capital stock consists of 200,000,000 shares (all in registered form) of common stock, par value $0.01 per share. The holders of the common shares are entitled to one vote on all matters submitted
                                      to a vote of stockholders and to receive all dividends, if any.

                                

                        

                      

                      

                      

                      
                        
                          	

                                	(c)	
                                  Offering of common
                                        shares: On April 26, 2017, the Company issued a total 20,125,000 common shares, at a price of $4.00 per share, in a public offering.  As part of the offering, entities affiliated with Simeon Palios, the
                                      Company's Chief Executive Officer and Chairman, executive officers and certain directors, purchased an aggregate of 5,500,000 common shares at the public offering price. The net proceeds from the offering after
                                      underwriting discounts and other offering expenses were $77,311.

                                

                        

                      

                      

                      

                      
                        
                          	

                                	(d)	
                                  Incentive plan:
                                      In November 2014, the Company's board of directors approved to adopt the 2014 Equity Incentive Plan, for 5,000,000 shares, of which as at December 31, 2017, 2,924,759 remained reserved for issuance.

                                

                        

                      

                      

                      

                      
                        F-24

                        
                          

                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      Restricted stock during 2017, 2016 and 2015 is analysed as follows:

                      

                      

                      	
                               

                            	
                               

                            	
                              Number of Shares

                            	
                               

                            	
                               

                            	
                              Weighted Average Grant Date Price

                            	
                               

                            
	
                              Outstanding at December 31, 2014

                            	
                               

                            	
                               

                            	
                              2,491,834

                            	
                               

                            	
                               

                            	
                              $

                            	
                              9.30

                            	
                               

                            
	
                              Granted

                            	
                               

                            	
                               

                            	
                              1,100,000

                            	
                               

                            	
                               

                            	
                               

                            	
                              6.91

                            	
                               

                            
	
                              Vested

                            	
                               

                            	
                               

                            	
                              (827,522

                            	
                              )

                            	
                               

                            	
                               

                            	
                              9.57

                            	
                               

                            
	
                              Outstanding at December 31, 2015

                            	
                               

                            	
                               

                            	
                              2,764,312

                            	
                               

                            	
                               

                            	
                              $

                            	
                              8.27

                            	
                               

                            
	
                              Granted

                            	
                               

                            	
                               

                            	
                              2,150,000

                            	
                               

                            	
                               

                            	
                               

                            	
                              2.26

                            	
                               

                            
	
                              Vested

                            	
                               

                            	
                               

                            	
                              (971,646

                            	
                              )

                            	
                               

                            	
                               

                            	
                              8.67

                            	
                               

                            
	
                              Outstanding at December 31, 2016

                            	
                               

                            	
                               

                            	
                              3,942,666

                            	
                               

                            	
                               

                            	
                              $

                            	
                              4.89

                            	
                               

                            
	
                              Granted

                            	
                               

                            	
                               

                            	
                              1,310,000

                            	
                               

                            	
                               

                            	
                               

                            	
                              3.95

                            	
                               

                            
	
                              Vested

                            	
                               

                            	
                               

                            	
                              (1,611,549

                            	
                              )

                            	
                               

                            	
                               

                            	
                              5.46

                            	
                               

                            
	
                              Outstanding at December 31, 2017

                            	
                               

                            	
                               

                            	
                              3,641,117

                            	
                               

                            	
                               

                            	
                              $

                            	
                              4.30

                            	
                               

                            

                      

                      

                      The fair value of the restricted shares has been determined with
                          reference to the closing price of the Company's stock on the date the agreements were signed. The aggregate compensation cost is being recognized ratably in the consolidated statement of operations over the respective vesting
                          periods. On May 11, 2017, after the resignation of one board member, the total amount of his unvested shares up to that date became vested at a compensation cost of $662. For 2017, 2016, and 2015, an amount of $8,232, $8,313, and
                          $8,279, respectively, was recognized in "General and administrative expenses" presented in the accompanying consolidated statements of operations.

                      

                      

                      At December 31, 2017 and 2016, the total unrecognized cost relating
                          to restricted share awards was $10,509 and $13,567, respectively. At December 31, 2017, the weighted-average period over which the total compensation cost related to non-vested awards not yet recognized is expected to be
                          recognized is 0.97 years.

                      

                      

                      
                        
                          	(e)	
                                  Share Repurchase
                                        Agreement: On May 22, 2014, the Company's Board of Directors authorized a share repurchase plan for up to $100,000 worth of shares of the Company's common stock. During 2015, the Company repurchased and
                                      retired 413,804 shares at an aggregate cost of approximately $2,673 and none during 2016 and 2017.

                                

                        

                      

                      

                      

                      10. Interest and Finance Costs

                      

                      

                      The amounts in the accompanying consolidated statements of operations are analyzed as
                          follows:

                      

                      

                      	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                               

                            	
                               

                            	
                              2017

                            	
                               

                            	
                               

                            	
                              2016

                            	
                               

                            	
                               

                            	
                              2015

                            	
                               

                            
	
                              Interest expense

                            	
                               

                            	
                              $

                            	
                              24,978

                            	
                               

                            	
                               

                            	
                              $

                            	
                              19,523

                            	
                               

                            	
                               

                            	
                              $

                            	
                              13,922

                            	
                               

                            
	
                              Amortization of financing costs

                            	
                               

                            	
                               

                            	
                              1,455

                            	
                               

                            	
                               

                            	
                               

                            	
                              1,503

                            	
                               

                            	
                               

                            	
                               

                            	
                              1,364

                            	
                               

                            
	
                              Commitment fees and other costs

                            	
                               

                            	
                               

                            	
                              195

                            	
                               

                            	
                               

                            	
                               

                            	
                              923

                            	
                               

                            	
                               

                            	
                               

                            	
                              269

                            	
                               

                            
	
                              Total

                            	
                               

                            	
                              $

                            	
                              26,628

                            	
                               

                            	
                               

                            	
                              $

                            	
                              21,949

                            	
                               

                            	
                               

                            	
                              $

                            	
                              15,555

                            	
                               

                            

                      

                      

                      Total interest on long-term debt for 2017, 2016 and 2015 amounted to $24,991, $21,009,
                          and $14,622, respectively, of which $13, $1,486, and $700, respectively, were capitalized and included "Vessels, net book value", in the accompanying consolidated balance sheets.

                      
                        F-25

                        
                          

                      

                      

                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      11. Loss per Share

                      

                      

                      All common shares issued (including the restricted shares issued under the Company's
                          incentive plans) are the Company's common stock and have equal rights to vote and participate in dividends upon their vesting. The calculation of basic earnings/(loss) per share does not treat the non-vested shares (not considered
                          participating securities) as outstanding until the time/service-based vesting restriction has lapsed. For the purpose of calculating diluted earnings per share the weighted average number of diluted shares outstanding includes the
                          incremental shares assumed issued determined in accordance with the treasury stock method. For the 2017, 2016 and 2015 and on the basis that the Company incurred losses, the effect of incremental shares would be anti-dilutive and
                          therefore basic and diluted loss per share was the same.

                      

                      

                      Profit or loss attributable to common equity holders is adjusted by the amount of
                          dividends on Series B Preferred Stock as follows:

                      

                      

                      	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                               

                            	
                               

                            	
                              2017

                            	
                               

                            	
                               

                            	
                              2016

                            	
                               

                            	
                               

                            	
                              2015

                            	
                               

                            
	
                              Net loss

                            	
                               

                            	
                              $

                            	
                              (511,714

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (164,237

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (64,713

                            	
                              )

                            
	
                              Less dividends on series B preferred shares

                            	
                               

                            	
                              $

                            	
                              (5,769

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (5,769

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (5,769

                            	
                              )

                            
	
                              Net loss attributed to common stockholders

                            	
                               

                            	
                               

                            	
                              (517,483

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (170,006

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (70,482

                            	
                              )

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Weighted average number of common shares, basic  and diluted

                            	
                               

                            	
                               

                            	
                              95,731,093

                            	
                               

                            	
                               

                            	
                               

                            	
                              80,441,517

                            	
                               

                            	
                               

                            	
                               

                            	
                              79,518,009

                            	
                               

                            
	
                              Loss per share, basic and diluted

                            	
                               

                            	
                              $

                            	
                              (5.41

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (2.11

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (0.89

                            	
                              )

                            

                      

                      

                      12. Income Taxes

                      

                      

                      Under the laws of the countries of the companies' incorporation and / or vessels'
                          registration, the companies are not subject to tax on international shipping income; however, they are subject to registration and tonnage taxes, which are included in vessel operating expenses in the accompanying consolidated
                          statements of operations.

                      

                      

                      Pursuant to the Internal Revenue Code of the United States (the "Code"), U.S. source
                          income from the international operations of ships is generally exempt from U.S. tax if the company operating the ships meets both of the following requirements, (a) the Company is organized in a foreign country that grants an
                          equivalent exception to corporations organized in the United States and (b) either (i) more than 50% of the value of the Company's stock is owned, directly or indirectly, by individuals who are "residents" of the Company's country
                          of organization or of another foreign country that grants an "equivalent exemption" to corporations organized in the United States (50% Ownership Test) or (ii) the Company's stock is "primarily and regularly traded on an
                          established securities market" in its country of organization, in another country that grants an "equivalent exemption" to United States corporations, or in the United States (Publicly‐Traded Test).

                      

                      

                      Notwithstanding the foregoing, the regulations provide, in pertinent part, that each
                          class of the Company's stock will not be considered to be "regularly traded" on an established securities market for any taxable year in which 50% or more of the vote and value of the outstanding shares of such class are owned,
                          actually or constructively under specified stock attribution rules, on more than half the days during the taxable year by persons who each own 5% or more of the value of such class of the Company's outstanding stock, ("5 Percent
                          Override Rule").

                      

                      

                      
                        F-26

                        
                          

                      

                      

                      

                      

                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      The Company and each of its subsidiaries expects to  qualify for this statutory tax
                          exemption for the 2017, 2016 and 2015 taxable years, and the Company takes this position for United States federal income tax return reporting purposes.  However, there are factual circumstances beyond the Company's control that
                          could cause it to lose the benefit of this tax exemption in future years and thereby become subject to United States federal income tax on its United States source income such as  if, for a particular taxable year, other
                          shareholders with a five percent or greater interest in the Company's stock were, in combination with the Company's existing 5% shareholders, to own 50% or more of the Company's outstanding shares of its stock on more than half
                          the days during the taxable year.

                      

                      

                      The Company estimates that since no more than the 50% of its shipping income would be
                          treated as being United States source income, the effective tax rate is expected to be 2% and accordingly it anticipates that the impact on its results of operations will not be material. The Company believes that it satisfies the
                          Publicly-Traded Test and all of its United States source shipping income is exempt from U.S. federal income tax. Based on its U.S. source Shipping Income for 2017, 2016 and 2015, the Company would be subject to U.S. federal income
                          tax of approximately $136, $80 and $166, respectively, in the absence of an exemption under Section 883.

                      

                      

                      13. Financial Instruments and Fair Value Disclosures

                      

                      

                      The carrying values of temporary cash investments, accounts receivable and accounts
                          payable approximate their fair value due to the short-term nature of these financial instruments. The fair values of long-term bank loans approximate the recorded values, due to their variable interest rates. The fair value of
                          long-term loan receivable from Diana Containerships also approximates its recorded value, due to its variable interest rate. The fair value of the Senior Unsecured Notes (Note 7) having a fixed interest rate amounted to $64,970 as
                          of December 31, 2017, and was determined through the Level 1 input of the fair value hierarchy as defined in FASB guidance for Fair Value Measurements based on the quoted price of the instrument on that date as stated under the
                          ticker Symbol "DSXN" on the NYSE.

                      

                      

                      The Company is exposed to interest rate fluctuations associated with its variable rate
                          borrowings and its objective is to manage the impact of such fluctuations on earnings and cash flows of its borrowings. Currently, the company does not have any derivative instruments to manage such fluctuations.

                      

                      

                      14. Subsequent Events

                      

                      

                      
                        
                          	

                                	a)	
                                  Series B Preferred Stock
                                        Dividends: On January 16, 2018, the Company paid a dividend on its series B preferred stock, amounting to $0.5546875 per share, or $1,442, to its stockholders of record as of January 12, 2018.

                                

                        

                      

                      

                      

                      
                        
                          	

                                	b)	
                                  Annual Incentive Bonus:
                                      On February 21, 2018 the Company's Board of Directors approved the grant of 1,800,000 shares of restricted common stock awards to executive management and non-executive directors, pursuant to the Company's 2014 equity
                                      incentive plan. The fair value of the restricted shares based on the closing price on the date of the Board of Directors' approval was about $6,876 and will be recognized in income ratably over the restricted shares
                                      vesting period which will be 3 years.

                                

                        

                      

                      

                      

                      
                        
                          	

                                	c)	
                                  Loan Prepayment:
                                      On March 12, 2018 the Company received an amount of $8,379 as partial prepayment under the loan with Diana Containerships, decreasing the loan receivable to $74,238 (Note 4(b)).

                                

                        

                      

                      

                      

                      

                      

                    

                    

                    

                    

                    

                    

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      

                    

                    

                  

                  

                

                

              

              

            

            

            
             

              

          

        

      

    

  

  F-27

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