Ocean Rig's $120m Loan Agreement with DryShips

Ocean Rig UDW Inc. a global provider of off-shore contract drilling oil services, today announced the following:

On November 18, 2014, Ocean Rig’s $120 million loan to its majority shareholder, DryShips Inc. (―DryShips‖), was approved by a special committee of Ocean Rig’s Board of Directors which received a fairness opinion from Global Hunter Securities, a division of Seaport Global Securities LLC, and the loan agreement was executed by both companies. This loan is for a period of 18 months, is unsecured and bears interest at LIBOR plus an average of approximately 10% for the first year and 12% for the following six months. Ocean Rig has the option to exchange the loan for Ocean Rig common shares owned by DryShips at a fixed price of $13.50 per share, provided the DryShips ABN AMRO $200 million secured bridge loan facility has been repaid in full. If such exchange occurs, the margin of the Ocean Rig $120 million loan to DryShips will be reduced from inception to LIBOR plus an average of approximately 6.6% for the first year and 8.25% for the following six months.

On November 18, 2014, as required by the DryShips ABN AMRO facility, Ocean Rig filed a prospectus supplement covering up to 78,301,755 of its common shares held by DryShips or its pledgees. Of the shares that have been registered, an estimated 44,000,000 Ocean Rig shares will initially be pledged by DryShips to ABN AMRO under the terms of the DryShips ABN AMRO facility which requires three times collateral coverage based on the prevailing 30-day VWAP at draw down.