Capital Product Partners L.P. (Nasdaq: CPLP) is an international, shipping company engaged in the seaborne transportation of natural gas, containerized goods and dry cargo. As a publicly traded master limited partnership, CPLP has elected to be treated as a C-Corp. for tax purposes which is most beneficial for U.S. investors (as they receive the standard 1099 form). The Partnership is well-positioned to benefit from the long-term growth dynamics of the global shipping industry and to capitalize on potential acquisition opportunities in the fragmented shipping market.
The Partnership acquired six 174,000 cubic meter (“CBM”) latest generation X-DF LNG carriers in the second half of 2021 for total consideration of $1.22 billion with long- term time charter employment in place with BP Gas Marketing Limited, Cheniere Marketing International LLP and Engie Energy Marketing Singapore Pte Ltd.
Modern High Specification Fleet
The CPLP fleet currently consists of 20 high specification vessels, including six latest generation LNG/Cs, ten Neo-Panamax container vessels, three Panamax container vessels and one Capesize bulk carrier vessel. This excludes two 13,278 Twenty-foot Equivalent Unit (“TEU”) container vessels and one LNG carrier that CPLP has agreed to acquire and are expected to be delivered to the partnership between the first quarter of 2023 and the second quarter of 2023.
The weighted average age of the CPLP fleet is 6.3 years (as of September 30, 2022).
CPLP vessels have been designed and equipped to the highest specification.
CPLP LNG carriers are equipped with Hi- Als (Air Lubrication System) and Rudder and Propeller Energy Saving devices in order to improve their performance.
CPLP LNG carriers are designed to offer the lowest environmental footprint for transporting LNG.
Fleet Employment -- Visible & Stable Cash Flows with High Quality Counterparties
CPLP’s modern LNG and containership assets and multi-year time charters are highly suitable for the Partnership’s business model.
CPLP vessel charters including the charters of the two 13,278 TEU container vessels and one LNG carrier that CPLP has agreed to acquire, have an average revenue weighted remaining term of 7.0 years (as of September 30, 2022), with staggered expirations. The Partnership’s charter coverage for 2022 and 2023 stands at 95% and 92%, respectively (as of September 30, 2022).
CPLP’s vessels are chartered to reputable counterparties worldwide including major operators and liner companies. Over the years, CPLP vessels have secured long term employment among others with BP, Cheniere, CMA-CGM, Engie, Hapag-Lloyd, Hartree, HMM, Maersk Lines, MSC, ONE, and ZIM.
Distribution - Growth Strategy & Financial Strength
The Partnership’s common unit distribution for the third quarter of 2022 was $0.15 per common unit.
Our objective is to pursue additional accretive transactions going forward and expand our asset base, with a view to further increasing the long-term distributable cash flow of the Partnership.
Capital Maritime & Trading Corp. (“Capital Maritime”), CPLP’s sponsor, owns significant LNG, tanker (including VLCCs and Chemical/Product tankers) and container tonnage which could potentially be dropped down to the Partnership.
On June 6, 2022 the Partnership agreed to acquire one 174,000 CBM latest generation X-DF LNG carrier and three 13,278 TEU hybrid scrubber-fitted dual fuel ready eco container sister vessels from Capital Maritime, for total consideration of $0.6 billion. The LNG carrier, to be named “Asterix I”, is currently under construction by Hyundai Heavy Industries Co. Ltd., South Korea, and is expected to be delivered to the Partnership in February 2023. Asterix I comes with a long-term time charter for a firm period of 5 years, which, together with the optional period, expires in February 2032. Of the three 13,278 TEU eco container sister vessels, the first, M/V Manzanillo Express, was delivered to the Partnership in October 2022. Upon its delivery to CPLP, the M/V Manzanillo Express commenced its ten-year charter with Hapag-Lloyd. The remaining two, to be named “Itajai Express” and “Buenaventura Express”, are currently under construction by Hyundai Samho Industries Co. Ltd., South Korea, and are scheduled for delivery to the Partnership in January 2023 and June 2023 respectively. The two newbuilding container vessels have secured long-term time charters for a firm period of 10 years which, together with the optional periods, expire between January 2039 and June 2039.
In July 2022, the Partnership completed the sale of M/V Archimidis (108,892 DWT / 8,266 TEU, container carrier built 2006, Daewoo Shipbuilding & Marine Engineering Co., Ltd., South Korea) and M/V Agamemnon (108,892 DWT / 8,266 TEU, container carrier built 2007, Daewoo Shipbuilding & Marine Engineering Co., Ltd., South Korea) to an unaffiliated third party for total consideration of $130.0 million.
The Partnership also successfully concluded a €100.0 million Senior Unsecured Bonds issuance (together with the €150.0 million Senior Unsecured euro-denominated bonds issued in October 2021), on the Athens Exchange.
As of September 30, 2022, the Partnership has repurchased 669,374 common units since the launch of the unit repurchase plan on February 19, 2021, at an average cost of $13.31 per unit.
CPLP’s sponsor, Capital Maritime, is a large, financially strong and diversified shipping company with a long, successful track record.
Capital Maritime owns a 22.6% stake in the Partnership (as of October 12, 2022).
Capital Maritime has an extensive network of relationships with oil majors, traders, liners and other major charterers.
Last updated November 10, 2022.