Capital Product Partners L.P. Announces the Successful Delivery of the LNG Carrier ‘Axios II’

Rhea-AI Summary

Capital Product Partners L.P. (CPLP) successfully took delivery of the LNG Carrier 'Axios II' as part of an agreement to acquire 11 LNG/Cs. The vessel has commenced a one-year time charter at a market-linked rate, followed by a seven-year bareboat charter with Bonny Gas Transport Limited. The acquisition was financed with cash from the balance sheet, a new senior secured loan facility, and a seller's credit agreement. Axios II is the ninth latest generation LNG/C of the Partnership, with the remaining nine vessels expected to be delivered between the second quarter of 2024 and the first quarter of 2027.

Insights

Financial Analyst

The delivery and financing of the 'Axios II' LNG Carrier by Capital Product Partners L.P. (CPLP) signifies a strategic expansion in the company's fleet, which can be expected to impact its revenue stream and operational capabilities. The financing structure, comprising a blend of balance sheet cash, a secured loan and deferred payment, reflects a careful balance of capital management and investment for growth. The one-year time charter at a market-linked rate, followed by a longer seven-year bareboat charter, provides CPLP with a predictable income stream, potentially enhancing financial stability and investor confidence.

However, the significant balloon payment due in December 2030 necessitates a focus on future cash flow management. Investors should monitor the company's ability to meet this obligation, as well as the operational performance of the new vessel, which could influence the overall financial health of CPLP. Additionally, the delivery schedule of the remaining vessels under the Umbrella Agreement will be a key factor to watch, as it will affect capital expenditures and debt levels over the next few years.

Maritime Industry Analyst

The acquisition of a 'latest generation' LNG Carrier like 'Axios II' positions CPLP in a favorable spot within the maritime shipping industry, which is increasingly moving towards cleaner energy sources such as LNG due to environmental regulations. The vessel's advanced two-stroke MEGA LNG/C design, built by Hyundai Heavy Industries, is indicative of an industry shift towards more efficient and eco-friendly vessels. This could provide CPLP with competitive advantages in securing charters and maintaining operational efficiency.

Furthermore, the long-term charter agreement with Bonny Gas Transport Limited, with an option to extend, suggests a stable and potentially lucrative partnership that could lead to further business. The impact of such strategic moves on the company’s market share and industry standing should be observed closely, as they could lead to enhanced profitability and long-term growth.

Energy Sector Analyst

The increasing global demand for LNG as an energy source, driven by the shift towards cleaner fuels, underscores the strategic importance of CPLP's investment in new LNG carriers. The 'Axios II' vessel, with its significant cargo capacity of 174,000 cbm, is well-positioned to meet the growing transport needs of the LNG market. The timing of the delivery aligns with the anticipated increase in LNG production and the need for maritime transport infrastructure.

Given the evolving landscape of the energy sector, with a focus on sustainability and energy security, CPLP's expansion into LNG transportation could be seen as a forward-thinking move. Stakeholders should consider the long-term implications of such investments, particularly as they relate to the company's alignment with global energy trends and the potential for future revenue growth in the energy transportation sector.

ATHENS, Greece, Jan. 04, 2024 (GLOBE NEWSWIRE) -- Capital Product Partners L.P. (NASDAQ: CPLP), an international owner of ocean-going vessels, today announced that it successfully took delivery of the LNG Carrier (“LNG/C”) ‘Axios II’.

Pursuant to the agreement to acquire 11 LNG/Cs provided under the Umbrella Agreement entered into on November 13, 2023 (the “Umbrella Agreement”), the Partnership took delivery on January 2, 2024 of LNG/C Axios II (174,000 cbm, latest generation, two stroke MEGA LNG/C, built at Hyundai Heavy Industries Co., Ltd). The vessel commenced a one-year time charter at a market-linked rate, which will be followed by a seven-year bareboat charter with Bonny Gas Transport Limited, who maintain an option to extend by an additional three years.

The vessel acquisition was financed with cash from the balance sheet, a new senior secured loan facility led by ING Bank N.V. for an amount of $190.0 million payable in 28 equal quarterly instalments of $2.5 million, in addition to a balloon payment of $120.0 million payable together with the final quarterly instalment in December 2030, and the deferral of $92.6 million of the purchase price, in accordance with the seller’s credit agreement included in the Umbrella Agreement, maturing on June 30, 2027.

Axios II is the ninth latest generation LNG/C of the Partnership and the second vessel delivery of the fleet acquired under the Umbrella Agreement. The remaining nine vessels are expected to be delivered between the second quarter of 2024 and the first quarter of 2027.

About Capital Product Partners L.P.
Capital Product Partners L.P. (NASDAQ: CPLP), a Marshall Islands master limited partnership, is an international owner of ocean-going vessels. CPLP currently owns 24 high specification vessels, including nine latest generation LNG/Cs, 12 Neo-Panamax container vessels and three Panamax container vessels. In addition, CPLP has agreed to acquire an additional nine latest generation LNG/Cs to be delivered between the second quarter of 2024 and the first quarter of 2027.

For more information about the Partnership, please visit: www.capitalpplp.com.

Forward-Looking Statements
The statements in this press release that are not historical facts may be forward-looking statements (as such term is defined in Section 21E of the Securities Exchange Act of 1934, as amended). These forward-looking statements involve risks and uncertainties that could cause the stated or forecasted results to be materially different from those anticipated. Unless required by law, we expressly disclaim any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in our views or expectations, to conform them to actual results or otherwise. We assume no responsibility for the accuracy and completeness of the forward-looking statements. We make no prediction or statement about the performance of our common units.

CPLP-F

Contact Details:

Capital GP L.L.C.
Jerry Kalogiratos
CEO
Tel. +30 (210) 4584 950
E-mail: j.kalogiratos@capitalpplp.com

Capital GP L.L.C.
Nikos Kalapotharakos
CFO
Tel. +30 (210) 4584 950
E-mail: n.kalapotharakos@capitalmaritime.com

Investor Relations / Media
Nicolas Bornozis
Capital Link, Inc. (New York)
Tel. +1-212-661-7566
E-mail: cplp@capitallink.com
Source: Capital Product Partners L.P.

FAQ

What did Capital Product Partners L.P. (CPLP) announce?

CPLP announced the successful delivery of the LNG Carrier 'Axios II' as part of an agreement to acquire 11 LNG/Cs.

How was the vessel acquisition financed?

The acquisition was financed with cash from the balance sheet, a new senior secured loan facility led by ING Bank N.V., and the deferral of $92.6 million of the purchase price in accordance with the seller's credit agreement.

What is the charter plan for Axios II?

The vessel has commenced a one-year time charter at a market-linked rate, followed by a seven-year bareboat charter with Bonny Gas Transport Limited, with an option to extend by an additional three years.

How many vessels are expected to be delivered under the Umbrella Agreement?

The remaining nine vessels are expected to be delivered between the second quarter of 2024 and the first quarter of 2027.

Who provided the senior secured loan facility for the acquisition?

The senior secured loan facility was led by ING Bank N.V. for an amount of $190.0 million.