Diana Shipping (DSX)

15.                 Subsequent Events:

(a)         Declaration of dividends: On August 2, 2007, the Company declared dividends amounting to $32,066, or $0.51 per share, paid on August 24, 2007 to stockholders of record as of August 16, 2007.

(b)         Sale of vessel and loan repayment: On July 5, 2007, the Pantelis SP was delivered to its new owners and the company received the agreed purchase price of $81,000. On July 10, 2007, the Company used the proceeds received from the sale of the Pantelis SP and cash on hand and repaid $90,000 plus interest and costs of the outstanding balance of the revolving credit facility with the Royal Bank of Scotland.

(c)          Supplemental letter to loan agreement: On July 17, 2007, the Royal Bank of Scotland provided the Company with a supplemental letter to the Loan Agreement dated 18 February 2005, as amended on 24 May 2006, according to which the two parties agreed to delete the requirement the major shareholders to maintain ownership of more than 20% of the Company’s common stock, but they will

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continue to be involved as officers of the management company until the bank consents to the removal of this requirement.

(d)         Loan draw down: On August 22, 2007, the Company drew down an amount of $11,750 under the revolving credit facility with the Royal Bank of Scotland to partly fund the acquisition cost of the vessel Semirio which was delivered in June 2007 and that at the time of the vessel’s delivery, for cash management purposes, was paid with cash on hand.

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10.   Subsequent Events:

(a)

Acquisition of DSS and draw down of loan: On March 27, 2006, the stockholders of DSS provided notice to the Company of their exercise of the option to sell all, but not less than all, of their outstanding shares of DSS to the Company for $20,000 in cash, pursuant to the option agreement signed in February 2005 (Note 2(b)). The acquisition of DSS was consummated on April 1, 2006 and DSS became a wholly-owned subsidiary from that date. On May 5, 2006, the Company drew down $20,000 under the revolving credit facility to finance this acquisition. The Company will record the transaction at historical cost due to the fact that, when the agreement was signed, DSS and the Company were under common control. The amount in excess of DSS's historical book value will be considered a preferential deemed dividend (approximately $20,155 at March 31, 2006) and will be reflected as a reduction in net income available to common stockholders in the second quarter of 2006 when the acquisition is consummated.



(b)

Amendment of credit terms of the revolving credit facility: On May 24, 2006, the Company entered into an agreement to amend the $230 million revolving credit facility of February 2005. The Company, upon signing of the amended agreement, paid financing costs amounting to $100. Pursuant to the terms and conditions of the amended agreement:



•

The amount of the revolving credit facility increased to $300 million, providing up to $50 million (from $30 million) for working capital requirements out of which up to $20 million for the acquisition of DSS. The Company is permitted to borrow amounts up to the facility limit, provided that conditions to drawdown are satisfied and that borrowings do not exceed 75% of the aggregate value of the mortgaged vessels.



•

The facility is available in full for six years (from five years) from May 24, 2006, the new availability date. At the end of the sixth year it will be reduced by $15 million (instead of $20 million) and over the remaining period of four years will be reducing in semiannual amounts of $15 million (instead of $13.5 million) with a final reduction of $165 million (instead of $75 million) together with the last semi annual reduction.



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Vessels Thetis and Erato (previously excluded) are subject to the credit facility's security by a first priority mortgage.

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The credit facility financial covenants were amended as follows:

•

Adjusted net worth (total Assets less total Debt) decreased to $150 million (from $200 million);



•

Adjusted net worth decreased to 25% of total Assets (from 35%);



•

Minimum required security cover (the excess of the aggregate market value of the mortgaged vessels to the outstanding balance of the credit facility) decreased to 120% (from 130%);



•

Minimum liquid funds of the mortgaged vessels decreased to $400 (from $750). Such covenant is also amended to exclude the amount of the available commitment, other than the amounts that are immediately available for drawing under the working capital element of the facility. Furthermore, the new covenant requires the minimum liquid funds to be maintained in accounts with the lender.



(c)

Declaration of dividends: On May 11, 2006, the Company declared dividends amounting to $15,525, or $0.345 per share, payable on or about June 8, 2006 to stockholders of record as of May 18, 2006.

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SIGNATURES

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

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