Business Context and Reporting Period
This Form 6-K filing by Capital Product Partners L.P. (CPLP) is dated June 17, 2008. The registrant is a Marshall Islands master limited partnership and foreign private issuer operating as an international owner of modern double-hull tankers. The filing primarily announces the successful delivery of its seventeenth vessel, the Aristotelis II.
Key Financial Metrics and Transaction Details
- Vessel Acquisition: The Aristotelis II has a carrying capacity of 51,226 dwt and a purchase price of $48 million.
- Financing: The acquisition was fully funded with debt through draw-downs on CPLP's revolving credit facilities. Interest costs have been swapped until the end of the non-amortizing periods.
- Charter Terms: The vessel is fixed under a bareboat charter with Overseas Shipholding Group Inc. (OSG) for ten years at a base rate of $13,000 per day.
- Fleet Status: Following this delivery, CPLP owns 17 vessels (14 modern MR tankers, two small product tankers, and one Suezmax crude oil tanker) with an agreement to purchase one additional product tanker.
The filing text does not provide consolidated revenue, profit, cash flow, or margin figures for the reporting period.
Material Changes and Fleet Expansion
The primary material change is the expansion of the fleet to 17 vessels. The Aristotelis II is the second of three 51,000 dwt MR chemical/product tanker sister vessels scheduled for delivery in 2008. The first was delivered in January, and the third is scheduled for August 2008. All 18 vessels in the portfolio (including the pending acquisition) are under medium to long-term charters with major entities including BP Shipping, Morgan Stanley Capital Group, OSG, Shell, and Trafigura.
Outlook, Management Commentary, and Risks
Management, represented by CEO and CFO Ioannis Lazaridis, stated that the delivery provides "accretive growth consistent with our strategy." CPLP intends to fund the sister vessel scheduled for August delivery wholly with debt, leveraging its balance sheet strength and new revolving facility signed earlier in the year. OSG holds an option to purchase each of the three sister vessels at the end of the eighth, ninth, or tenth year of the charter.
The filing includes a standard forward-looking statement disclaimer, noting that risks and uncertainties could cause actual results to differ materially from anticipated outcomes. No specific quantitative risks or contingencies beyond standard market risks are detailed in this press release.
Investor Verification Checklist
- Verify the utilization status and interest rate terms of the revolving credit facilities used to fund the $48 million acquisition.
- Confirm the scheduled delivery date and funding strategy for the third sister vessel expected in August 2008.
- Review the specific terms of the bareboat charter with OSG, including the mechanics of the purchase option exercisable in years 8, 9, or 10.
- Assess the impact of the new vessel on the partnership's distribution coverage ratio and debt-to-equity metrics.