NOTE D – LONG-TERM DEBT

Long-term debt consisted of the following:

(Amounts in thousands)		Interest Rate			Total Principal Due
		December 31,	December 31,	Maturity	December 31,	December 31,
Description		2011	2010	Date	2011	2010
Secured:
Notes Payable – Variable Rate	*	1.5738%	1.2894%	2015	$ 15,333	$ 18,000
Notes Payable – Variable Rate	*	0.0000%	0.0000%	2012	12,845	13,300
Notes Payable – Variable Rate	**	1.8293%	1.2894%	2013	29,389	36,857
Notes Payable – Variable Rate		3.0632%	N/A	2018	22,332	-
Notes Payable – Variable Rate		3.2702%	3.2575%	2014	13,318	15,739
Notes Payable – Variable Rate	***	1.0957%	1.0829%	2020	60,808	61,776
Notes Payable – Variable Rate		3.0600%	3.0563%	2017	41,656	44,722
Notes Payable – Variable Rate		2.88-2.92%	2.77-2.79%	2018	52,440	21,171
Notes Payable– Variable Rate	****	3.2458%	N/A	2018	24,162	-
Notes Payable – Variable Rate		2.6440%	N/A	2017	15,675	-
Notes Payable – Variable Rate		3.2458%	N/A	2018	18,460	-
Notes Payable – Variable Rate		3.0000%	N/A	2018	6,175	-
Unsecured Line of Credit		4.0349%	4.7575%	2013	9,500	10,000
					322,093	221,565
		Less Current Maturities			(36,079)		(21,324)
					$ 286,014	$ 200,241

* We have interest rate swap agreements in place to fix the interest rates on our variable rate notes payable expiring in 2012 and 2015 at 5.17% and 4.41%, respectively. After applicable margin adjustments, the effective interest rates on these notes payable are fixed at 4.67% and 5.41%, respectively. The swap agreements are for the same terms as the associated notes payable.

** We have three interest rate swap agreements currently in place to fix the interest rate on portions of this variable note payable at 3.46%, 2.69% and 2.45% respectively through the termination of the loan. After applicable margin adjustments, the effective interest rates on the swapped portion of these notes payable are 4.71%, 3.94% and 3.70%, respectively. Two of these swap agreements became effective in 2010 when the previous swap agreements terminated and the remaining agreement has been in place since the inception of the loan.

*** We have an interest rate swap agreement in place to fix the interest rate on our variable rate note payable expiring in 2020 at 2.065%. After applicable margin adjustments, the effective interest rate on this note payable is fixed at 2.965%. The swap agreement is for the same term as the associated note payable.

**** We have an interest rate swap agreement in place to fix the interest rate on our variable rate note payable expiring in 2018 at 1.80%. After applicable margin adjustments, the effective interest rate on this note payable is fixed at 4.47%. The swap agreement is for the same term as the associated note payable.

All of the debt listed in the chart above was either (i) issued directly by International Shipholding Corporation or (ii) issued by one or more subsidiaries of International Shipholding Corporation and guaranteed by International Shipholding Corporation. Our variable rate notes payable and our line of credit are secured by assets with an aggregate net book value of $448,065,000 as of December 31, 2011, and by a security interest in certain operating contracts and receivables.

The aggregate principal payments required as of December 31, 2011, for each of the next five years are $36,079,000 in 2012, $72,754,000 in 2013, $34,544,000 in 2014, $30,734,000 in 2015, $23,402,000 in 2016 and $124,580,000 thereafter.

Effective July 15, 2011, our revolving credit facility was reduced from $35 million to $30 million, the expiration date extended until April of 2013, and the letter of credit requiring $6.4 million of collateral was cancelled. At December 31, 2011, we had $9.5 million drawn for working capital purposes, all of which was repaid in January 2012. Associated with this credit facility is a commitment fee of .125% per year on the undrawn portion of this facility. The net weighted average interest rate on all of our long-term debt after consideration of the effect of our interest rate swaps at December 31, 2011 and December 31, 2010 was 3.4593% and 3.5478%, respectively.

We entered into a financing agreement with Regions Bank on August 27, 2009 for a five year facility to finance up to $40.0 million for the purchase of additional vessels. As of December 31, 2009, the Company had drawn $25.0 million under this facility towards the purchase of the vessels to fulfill the additional requirements under a contract to provide services to an Indonesian mining company. The vessels purchased with the loan proceeds were subsequently sold to a third party in the third quarter of 2009, generating a deferred gain of approximately $10.6 million. The loan was refinanced on June 29, 2010 for seven years with an additional equity payment by the Company of $6.1 million. In addition to a $1.1 million payment received from the buyer, a ten year note receivable was agreed to for the remaining balance. We hold a first mortgage covering the vessels until the note is fully satisfied. Due to our financing of the transaction, the gain realized on the sale was deferred. This deferral will be recognized over ten years, the length of the agreement with the buyer.

Additionally we entered into a credit facility with ING Bank on August 2, 2010 to finance 65% of the construction price of each of three Korean built vessels to be delivered in early 2011 with a maximum amount of $55,200,000. As of December 31, 2010, a total of $21,171,000 had been drawn on this facility and the remaining $34,029,000 was drawn in January 2011.

We entered into a variable rate financing agreement with ING Bank N.V., London branch on June 20, 2011 for a seven year facility to finance the acquisition of a Cape Size vessel and a Handymax Bulk Carrier, that was under construction, both of which were assumed in the acquisition of Dry Bulk. Pursuant to the terms of the facility, the lender agreed to provide a secured term loan facility divided into two tranches: Tranche A, fully drawn on June 20, 2011 in the amount of $24.2 million, and Tranche B, providing up to $23.3 million of additional credit. Under Tranche B, $6.1 million was drawn in November 2011 and the final draw of $12.7 million was made in January 2012.

We entered into a variable rate financing agreement with DnB Nor Bank ASA on June 29, 2011 for a seven year facility to finance a portion of the acquisition price of two previously leased vessels. This facility, totaling $45.9 million was fully drawn during July 2011. We have an interest rate swap agreement in place for approximately 50% of this agreement to fix the interest rate on that portion at 1.80%. After the applicable margin adjustments, the effective interest rate on the swapped portion of the notes payable is 4.47%.

We entered into a variable rate financing agreement with Capital One N.A. on December 28, 2011 for a five year facility totaling $15.7 million to finance a portion of the acquisition price of a multi-purpose ice strengthened vessel. This facility was fully drawn prior to the end of 2011.

Most of our debt agreements, among other things, impose defined minimum working capital and net worth requirements, impose leverage requirements, and prohibit us from incurring, without prior written consent, additional debt or lease obligations, except as defined. As of December 31, 2011, we met all of the financial covenants under our various debt agreements, the most restrictive of which include the working capital, leverage ratio, minimum net worth and interest coverage ratios.

Certain of our loan agreements restrict the ability of our subsidiaries to dispose of collateralized assets or any other asset which is substantial in relation to our assets taken as a whole without the approval from the lender. We have consistently remained in compliance with this provision of these loan agreements.