UPDATE 1-FreeSeas gets new $27.8 mln loan; shares jump

* Says gets new $27.8 mln term loan with FBB

* Sees using proceeds to buy vessels * Says FBB, Credit Suisse extend loan covenant waivers * Shares jump 10 pct

Nov 12 (Reuters) - Drybulk shipper FreeSeas Inc (FREE.O) said it secured a new term loan and obtained an extension of loan-covenant waivers, sending its shares up 10 percent. The company said the new secured seven-year term loan of up to $27.8 million from First Business Bank S.A. of Greece (FBB) refinances the company's existing $21.75 million loan on the Free Impala.

The new loan provides additional liquidity of up to $6.0 million, FreeSeas said, adding that it intends to use the proceeds from the financing to explore potential vessel additions.

Under the terms of the new loan, the company's expected payments would decrease by about $1.0 million in the aggregate over the next 12 months.

FBB has also agreed to reduce the market-value-to-loan covenant to 100 percent through June 30, 2010. The bank had earlier agreed to waive any potential breach of the covenant till Jan. 1, 2010.

In addition, Credit Suisse has agreed to reduce the market-value-to-loan covenant on its revolving credit facility with the company to 115 percent for one year starting April 1, 2010, FreeSeas said. FreeSeas said it expects the financing agreements to reduce the current portion of its total debt to about $17 million as of Sept. 30 from about $32 million as of June 30.

Shares of the company rose 15 cents to $1.61 in morning trade on Nasdaq. (Reporting by Hezron Selvi in Bangalore; Editing by Pradeep Kurup)