UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

Pursuant to Rule 13a-16 or 15d-16

under the Securities Exchange Act of 1934

For the month of September 22, 2023

COMMISSION FILE NUMBER: 001-33373

CAPITAL PRODUCT PARTNERS L.P.

(Translation of registrant’s name into English)

3 Iassonos Street

Piraeus, 18537 Greece

(Address of principal executive offices)

Indicate by check mark whether the Registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☒             Form 40-F  ☐

 --12-31

June 30, 2023

Attached as Exhibit I are the Unaudited Interim Condensed Consolidated Financial Statements of Capital Product Partners L.P. (“CPLP”) for the six-month periods ended June 30, 2023 and 2022 and the related Operating and Financial Review and Prospects discussion.

Attached as Exhibit 101 is the following financial information from this Report on Form 6-K for the six-month periods ended June 30, 2023 and 2022, filed as part of Exhibit I hereto, formatted in Extensible Business Reporting Language (“XBRL”):

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.

Exhibit I

 CPLP

Financial Results for the six-month period ended June 30, 2023

Operating and Financial Review and Prospects

You should read the following discussion of our financial condition and results of operations in conjunction with our unaudited interim condensed consolidated financial statements for the six-month periods ended June 30, 2023 and 2022 and related notes included elsewhere herein. Among other things, the financial statements include more detailed information regarding the basis of presentation for the following information. This discussion contains forward-looking statements that are made based upon management’s current plans, expectations, estimates, assumptions and beliefs concerning future events impacting us and therefore involve a number of risks and uncertainties, including those risks and uncertainties discussed in our Annual Report on Form 20-F for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission (the “SEC”) on April 26, 2023 (the “Annual Report”). These risks, uncertainties and assumptions involve known and unknown risks and are inherently subject to significant uncertainties and contingencies, many of which are beyond our control. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Our Fleet

The following table summarizes the current employment of our fleet:

(1)  TC: Time Charter; Spot: Voyage charter.

(2)  Earliest possible redelivery date.

(3)  In September 2020, each of the vessel-owning companies of the M/V Long Beach Express, the M/V Seattle Express and the M/V Fos Express entered into a time charter agreement with Hapag-Lloyd for a period of 56 to 60 months. The charterer has the option to extend the time charters of the vessels by 24 months (+/- 60 days) plus 12 months (+/- 45 days). The charter of the M/V Long Beach Express commenced in October 2020 and of the M/V Seattle Express and the M/V Fos Express in January 2021. 

(4)  In 2019, each of the vessel-owning companies of the LNG/C Aristos I, the LNG/C Aristidis I and the LNG/C Attalos, entered into a time charter agreement with BP for a period of 3 years (+/- 30 days). The charterers have three two-year options (+/- 30 days) and one three-year option (+/- 30 days). The charters of the LNG/C Aristos I and the LNG/C Aristidis I commenced in November 2020 and January 2021 respectively. The charter of the LNG/C Attalos commenced in November 2022, previously the vessel was under a 15-month (+/- 30 days) time charter with BP. In February and March 2023, the charterer exercised its option to extend the time charter of the LNG/C Aristos I and LNG/C Aristidis I by two years (+/- 30 days), respectively. 

(5)  In April 2021, each of the vessel-owning companies of the LNG/C Aristarchos and the LNG/C Asklipios, entered into a time charter agreement with Cheniere until March 15, 2025 (+/- 30 days) and February 5, 2025 (+/- 30 days). Each charter has two one-year options (+/- 30 days). The charters of the LNG/C Aristarchos and the LNG/C Asklipios commenced in June 2021 and September 2021, respectively. In August 2022 both vessels amended their time charter agreement with Cheniere and extended them until June 14, 2031 (+/- 30 days) and September 28, 2031 (+/- 30 days), respectively. After the amendment each charter has two two-year options (+/- 30 days). 

(6)  In July 2021, the vessel-owning company of the LNG/C Adamastos, entered into a time charter agreement with Engie for a period of 1,890 days (+90/-45 days) or for a period of 2,620 days (+90/-45 days) if the charterer exercises its option on or prior to May 2023. The charter of the LNG/C Adamastos commenced in August 2021. In May 2022, the charterer elected the second period of 2,620 days (+90/-45 days).

(7)  In January 2022, the vessel-owning company of the LNG/C Asterix I, entered into a time charter agreement with Hartree for a period of 1,825 days (+/-60 days) or for a period of 2,555 days (+/-60 days) if the charterer exercises its option on or prior to January 2025. The charter has one two-year option (+/- 30 days). In January 2023, the charterer selected the period of 2,555 days (+/-60 days). The charter of the LNG/C Asterix I commenced in February 2023.

(8)  In June 2021, the vessel-owning companies of the M/V Manzanillo Express, the M/V Itajai Express and the M/V Buenaventura Express, entered into a time charter agreement with Hapag-Lloyd for a period of 120 months (+/-90 days). The charterers have three two-year options (+/- 45 days). The charters of the M/V Manzanillo Express, the M/V Itajai Express and the M/V Buenaventura Express commenced in October 2022, January 2023, and June 2023, respectively.

(9)  In March 2023, the vessel-owning company of the M/V Akadimos entered into a time charter agreement with CMA CGM for a period of two years (+45/-30 days). The charter of the M/V Akadimos commenced in April 2023.

Recent Developments

Vessel acquisitions

On January 10, 2023, we acquired from Capital Maritime and Trading Corp. (“Capital Maritime”) the shares of the company owning the M/V Itajai Express for a total consideration of $122.5 million, which was funded through a cash deposit of $6.0 million advanced in June 2022, $8.5 million of cash at hand and $108 million of debt through a new sale and lease back agreement we entered into on December 23, 2022 with a duration of eight years (the “2022 Jolco”).

On February 17, 2023, we acquired from Capital Maritime the shares of the company owning the LNG/C Asterix I, for a total consideration of $230.0 million, which was funded through a cash deposit of $12.0 million advanced in June 2022, $34.0 million of cash at hand and $184.0 million of debt through a new sale and lease back agreement we entered into on February 7, 2023 with a duration of 10 years (the “2023 CMBFL - LNG/C”).

On June 20, 2023, we acquired from Capital Maritime the shares of the company owning the M/V Buenaventura Express for a total consideration of $122.5 million, which was funded through a cash deposit of $6.0 million advanced in June 2022, $16.5 million of cash at hand and $100.0 million of debt through a new credit facility we entered into on June 13, 2023 with a duration of eight years (the “2023 Credit Facility”).

Vessel disposal

On June 27, 2023, we agreed to sell the dry cargo vessel M/V Cape Agamemnon (179,221 DWT, built 2010, Sungdong Shipbuilding & Marine Engineering Co., Ltd, South Korea) to an unaffiliated party for a total consideration of $22.0 million. As of June 30, 2023, the vessel was classified as held for sale and we recorded a non-cash impairment charge of $8.0 million. The delivery of the M/V Cape Agamemnon to the buyer is expected by October 2023.

Debt repayment 

On March 14, 2023, the Partnership fully repaid the debt facility that we entered into with CMB Financial Leasing Co., Ltd in January 2021 amounting to $23.4 million with original maturity in February 2026 (“2021 CMBFL – Panamax”) with the purpose of partially financing the acquisition of three 5,089 TEU sister container vessels, namely the M/V Long Beach Express,the M/V Seattle Express and the M/V Fos Express. 

Quarterly Common Unit Cash Distribution

On January 26, 2023, the Board declared a cash distribution of $0.15 per common unit for the fourth quarter of 2022 which was paid on February 10, 2023, to common unit holders of record on February 7, 2023.

On April 25, 2023, the Board declared a cash distribution of $0.15 per common unit for the first quarter of 2023 which was paid on May 12, 2023, to common unit holders of record on May 8, 2023.

On July 20, 2023, the Board declared a cash distribution of $0.15 per common unit for the second quarter of 2023 which was paid on August 8, 2023, to common unit holders of record on August 2, 2023.

As previously announced, we intend to review our distributions from time to time in the light of a range of factors, including, among other things, our access to the capital markets, the refinancing of our external debt, the level of our capital expenditures and our ability to pursue accretive transactions. For further information on the risks that may affect our distributions, see “Item 3. Key Information—D. Risk Factors”, including in particular the risk factor entitled “We cannot assure you that we will pay any distributions on our units” in our Annual Report.

Fleet Employment

Currently we own a fleet of 23 high specification vessels consisting of 12 Neo-Panamax container carrier vessels, three Panamax container carrier vessels and seven X-DF Liquefied natural gas carrier (“LNG/C”) vessels all employed under time charter agreements and one Cape-size bulk carrier vessel currently trading under voyage charters and which we have agreed to sell to an unaffiliated party.

As of June 30, 2023, our charter coverage for the rest of 2023 and 2024 was 96% for both periods.

Factors Affecting Our Future Results of Operations

Please refer to our Annual Report, regarding the factors affecting our future results of operations.

Financial Results:

Results of Operations

Six-Month Period Ended June 30, 2023, Compared to the Six-Month Period Ended June 30, 2022

Our results of operations for the six-month periods ended June 30, 2023 and 2022 differ primarily due to:

Total Revenues

Total revenues, consisting of time and voyage charter revenues, amounted to $169.6 million for the six-month period ended June 30, 2023, compared to $147.3 million for the six-month period ended June 30, 2022. The increase of $22.3 million was primarily a result of the higher average daily charter rates earned by the vessels in our fleet and the increase in the average number of vessels in our fleet by 0.7 vessels during the six-month period ended June 30, 2023, compared to the same period in 2022.

Time and voyage charter revenues are mainly comprised of the charter hires received from unaffiliated third-party charterers and are affected by the number of days our vessels operate, the average number of vessels in our fleet and the charter rates.

For the six-month period ended June 30, 2023, BP, Hapag-Lloyd, Cheniere and HMM accounted for 22%, 22%, 16% and 16% of our total revenues, respectively.

Voyage Expenses

Total voyage expenses amounted to $7.8 million for the six-month period ended June 30, 2023, in line with $8.0 million for the six-month period ended June 30, 2022.

Voyage expenses primarily consist of bunkers, port expenses and commissions. Voyage expenses incurred during time charters are paid by the charterer, except for commissions, which are paid for by us. Voyage expenses incurred during voyage charters and off-hire period are paid by us.

Vessel Operating Expenses

For the six-month period ended June 30, 2023, our total vessel operating expenses amounted to $42.8 million, compared to $33.1 million for the six-month period ended June 30, 2022. The $9.7 million increase in total vessel operating expenses primarily reflects the net increase in the number of vessels in our fleet and costs incurred during scheduled maintenance underwent by certain of our vessels.

Total vessel operating expenses for the six-month period ended June 30, 2023, include expenses of $5.2 million incurred under management agreements with Capital-Executive Ship Management Corp. (“Capital-Executive”) and Capital Gas Ship Management Corp. (“Capital Gas”), compared to $4.6 million during the six-month period ended June 30, 2022. Please also refer to Note 4 (Transactions with related parties) in the unaudited condensed consolidated financial statements for the six-month period ended June 30, 2023.

General and Administrative Expenses

General and administrative expenses amounted to $5.1 million for the six-month period ended June 30, 2023, compared to $3.9 million for the six-month period ended June 30, 2022. The $1.2 million increase in general and administrative expenses was mainly attributable to the increase in the amortization associated with our equity incentive plan.

General and administrative expenses include Board fees and expenses, audit and certain legal fees, fees related to the requirements of being a publicly traded partnership and the amortization associated with our equity incentive plan.

Impairment of Vessel

On June 27, 2023, we agreed to sell the dry cargo vessel M/V Cape Agamemnon (179,221 DWT, built 2010, Sungdong Shipbuilding & Marine Engineering Co., Ltd, South Korea) to an unaffiliated party. Delivery of the M/V Cape Agamemnon to the buyer is expected by October 2023. The vessel was classified as held for sale and we recorded a non-cash impairment charge of $8.0 million. No impairment of vessel was recognised during the six-month period ended June 30, 2022.

Vessel Depreciation and Amortization

Vessel depreciation and amortization increased to $40.1 million for the six-month period ended June 30, 2023, compared to $36.0 million for the six-month period ended June 30, 2022. The increase in vessel depreciation and amortization primarily reflects the increase in the average number of vessels in our fleet partly offset by lower amortization of deferred dry-docking costs.

Total Other Expense, Net

Total other expense, net for the six-month period ended June 30, 2023, amounted to $48.4 million, compared to $20.7 million for the six-month period ended June 30, 2022. Total other expense, net includes interest expense and finance cost of $49.2 million for the six-month period ended June 30, 2023, compared to $22.1 million for the six-month period ended June 30, 2022. The increase of $27.1 million was mainly due to the increase in the Partnership’s average indebtedness and the increase in the weighted average interest rate for the six-month period ended June 30, 2023 to 6.2% compared to 3.4% for the six-month period ended June 30, 2022. Please also refer to Note 7 (Long-term debt, net) to our unaudited condensed consolidated financial statements.

Interest expense and finance cost include interest expense, amortization of financing charges, commitment fees and bank charges.

Partnership’s Net Income

The Partnership’s net comprehensive income for the six-month period ended June 30, 2023, amounted to $17.4 million compared to $45.6 million for the corresponding period in 2022.

Liquidity and Capital Resources

As of June 30, 2023, total cash and cash equivalents amounted to $104.7 million. Total cash includes restricted cash of $11.7 million in total representing the minimum liquidity requirement under our credit facilities, sale and lease back agreements and unsecured bonds (the “financing arrangements”).

Generally, our primary sources of funds have been cash from operations, bank borrowings, sale and lease back arrangements and, depending on our access to the capital markets, equity and debt securities offerings.

Cash from operations depends on our chartering activity. Depending on the prevailing market rates when our charters expire, we may not be able to re-charter our vessels at levels similar to their current charters, which may affect our future cash flows from operations. None of our charters is expected to expire in the coming 12 months. Cash flows from operations may be further affected by other factors described in our Annual Report in “Item 3. Key Information—D. Risk Factors”.

Because we distribute all of our available cash (a contractually defined term, generally referring to cash on hand at the end of each quarter after provision for reserves), we generally rely upon external financing sources, including bank borrowings and equity and debt securities offerings, to fund replacement, expansion and investment capital expenditures, and to refinance or repay outstanding indebtedness.

 In particular, since 2011, our board of directors has elected not to provision cash reserves for estimated replacement capital expenditures. Accordingly, our ability to maintain and grow our asset base, including through further dropdown opportunities from Capital Maritime and its affiliates or acquisitions from third parties, and to pay or increase our distributions as well as to maintain a strong balance sheet depends on, among other things, our ability to obtain required financing, access financial markets and refinance part or all of our existing indebtedness on commercially acceptable terms.

In April 2016, in the face of severely depressed trading prices for master limited partnerships, including us, a significant deterioration in our cost of capital and potential loss of revenue, our board of directors took the decision to protect our liquidity position by creating a capital reserve. We used cash accumulated as a result of quarterly allocations to our capital reserve to partially prepay our indebtedness as part of our refinancing in October 2017. We expect to continue to reserve cash in amounts necessary to service our debt in the future, including to make quarterly amortization payments. Please see “Item 8A: How We Make Cash Distributions” in our Annual Report for further information on our cash distribution policy.

Subject to our ability to obtain required financing and access financial markets, we expect to continue to evaluate opportunities to acquire vessels and businesses. We currently have no capital commitments to purchase or build additional vessels. We do not anticipate any of our vessels to undergo special survey in the next twelve months.

As of June 30, 2023, total partners’ capital amounted to $649.4 million, an increase of $11.0 million compared to $638.4 million as of December 31, 2022. The increase reflects net income for the six months ended June 30, 2023, other comprehensive income of $1.7 million relating to the net effect of the cross-currency swap agreement we designated as an accounting hedge and the amortization associated with our equity incentive plan of $1.9 million, partly offset by distributions declared and paid during the period in a total amount of $6.2 million and the cost of repurchasing our common units under our unit repurchase program for an aggregate amount of $3.8 million.

Subject to shipping, charter and financial market developments, we believe that our working capital will be sufficient to meet our existing liquidity needs for at least the next 12 months.

Cash Flows

The following table summarizes our cash and cash equivalents and restricted cash provided by / (used in) operating, investing and financing activities for the periods, presented in millions:

Net Cash Provided by Operating Activities

Net cash provided by operating activities was $91.5 million for the six-month period ended June 30, 2023, compared to $90.7 million for the six-month period ended June 30, 2022. The increase of $0.8 million was mainly attributable to a decrease in prepayments and other assets, in inventories and in the amounts we reimbursed our managers for expenses paid on our behalf and to an increase in accounts payables, accrued liabilities and revenue received in advance partly offset by an increase in trade accounts receivable and the increase in interest expense and finance costs.

Net Cash Used in Investing Activities

Net cash used in investing activities refers primarily to cash used for vessel acquisitions and improvements, including installation of scrubbers. Net cash used in investing activities during the six-month period ended June 30, 2023, amounted to $455.8 million compared to $33.1 million during the corresponding period in 2022.

During the six-month period ended June 30, 2023 we paid $116.5 to acquire the shares of the company owning the M/V Itajai Express, paid $218.0 million to acquire the shares of the company owning the LNG/C Asterix I, paid $116.5 to acquire the shares of the company owning the M/V Buenaventura Express and paid $4.8 million for vessel improvements.

During the six-month period ended June 30, 2022, we paid $30.0 million in advance for the acquisition of the shares of the companies owning the M/V Manzanillo Express, the M/V Itajai Express, the LNG/C Asterix I and the M/V Buenaventura Express, paid $1.1 million for vessel improvements and paid $2.0 million for expenses related to sale of vessels.

Net Cash Provided by / (Used in) Financing Activities

Net cash provided by financing activities for the six-month period ended June 30, 2023, was $314.1 million representing mainly cash proceeds of $392.0 million from the issuance of three new financing arrangements that we entered into in order to partly finance the acquisition of the shares of the companies owning the M/V Itajai Express, the LNG/C Asterix I and the M/V Buenaventura Express, partly offset by $3.4 million paid for the issuance of the three financing arrangements, the $23.4 million we paid to fully repay the 2021 CMBFL – Panamax sale and lease back agreements, $41.1 million of scheduled principal payments, $3.8 million paid to acquire CPLP units under our repurchase program and $6.2 million of dividends to our unit holders.

Net cash used in financing activities for the six-month period ended June 30, 2022, was $54.1 million representing mainly $45.0 million cash paid for scheduled principal payments, $0.1 million paid for the debt issuance costs, $2.9 million paid to acquire CPLP units under our repurchase program and $6.1 million of dividends to our unit holders.

Borrowings (Financing Arrangements)

Our long-term borrowings are reflected in our balance sheet as “Long-term debt, net” and in current liabilities as “Current portion of long-term debt, net”.

As of June 30, 2023, and December 31, 2022, total borrowings of $1,631.7 million and $1,299.2 million were outstanding under our financing arrangements respectively.

The 2022 Jolco

On December 23, 2022, we entered into the 2022 Jolco, consisting of up to $108.0 million of available funds, for the purpose of partially financing the acquisition of the shares of the company owning the M/V Itajai Express. The full amount of the sale and lease back agreement was drawn on January 6, 2023, and has duration of eight years.

The 2023 CMBFL - LNG/C

On February 7, 2023, we entered into the 2023 CMBFL - LNG/C, consisting of up to $184.0 million of available funds, for the purpose of partially financing the acquisition of the shares of the company owning the LNG/C Asterix I. The full amount of the sale and lease back agreement was drawn on February 17, 2023, and has duration of 10 years. 

The 2023 Credit Facility

On June 13, 2023, we entered into the 2023 Credit Facility, consisting of up to $100.0 million of available funds, for the purpose of partially financing the acquisition of the shares of the company owning the M/V Buenaventura Express. The full amount of the facility was drawn on June 15, 2023, and has a duration of eight years.

Repayment of the 2021 CMBFL - Panamax

On March 14, 2023, we fully repaid the 2021 CMBFL - Panamax sale and lease back agreements, with original maturity in February 2026, amounting to $23.4 million.

For information relating to our credit facilities, sale and lease back agreements and unsecured bonds, please refer to Note 7 of our audited Consolidated Financial Statements included in our Annual Report, and Note 7 to our unaudited interim condensed consolidated financial statements included elsewhere herein and the description above in “Liquidity and Capital Resources”.

As of June 30, 2023, and December 31, 2022, we were in compliance with all financial debt covenants. Our ability to comply with the covenants and restrictions contained in our financing arrangements and any other debt instruments we may issue or enter into in the future may be affected by events beyond our control, including prevailing economic, financial and industry conditions, such as interest rate developments, changes in the funding costs offered by our banks and changes in asset valuations. If market or other economic conditions deteriorate, our ability to comply with these covenants may be impaired. If we are in breach of any of the restrictions, covenants, ratios or tests included in our financing arrangements, we are unlikely to be able to make any distributions to our unit holders, a significant portion of our obligations may become immediately due and payable and our lenders’ commitment to make further loans to us, if any, may terminate. We may not have, or be able to obtain, sufficient funds to make these accelerated payments. In addition, obligations under our financing arrangements are secured by certain of our vessels, and if we are unable to repay debt under our financing arrangements, the lenders could seek to foreclose on those assets. More specifically, 13 vessels with an aggregate net book value of $2.0 billion as of June 30, 2023, have been provided as collateral under the terms of the Partnership’s credit facilities or the title of ownership is held by the relevant lender under our sale and lease back agreements. This excludes 10 unencumbered vessels of an aggregate net book value of $0.3 billion as of June 30, 2023.

Any contemplated vessel acquisitions will have to be at levels that do not impair the required ratios, see “Item 5.B. Liquidity and Capital Resources—Borrowings (Financing Arrangements)” in our Annual Report. If the estimated asset values of vessels in our fleet decrease, we may be obligated to prepay part of our outstanding debt in order to remain in compliance with the relevant covenants in our financing arrangements. A decline in the market value of our vessels could also affect our ability to refinance our financing arrangements and/or limit our ability to obtain additional financing. As of June 30, 2023, a decrease of 10% in the aggregate fair market values of our vessels would not cause any violation of the total indebtedness to aggregate market value covenant contained in our financing arrangements.

Off-Balance Sheet Arrangements

As of June 30, 2023, we have not entered into any off-balance sheet arrangements.

Critical Accounting Policies

A discussion of our critical accounting policies can be found in our Annual Report.

Changes in Accounting Policies

See Note 2 to our unaudited interim condensed consolidated financial statements included elsewhere herein.

INDEX TO UNAUDITED INTERIM CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.