Business Context and Reporting Period
This Form 6-K filing by Dynagas LNG Partners LP (Dynagas Partners) covers the month of June 2014, specifically dated June 13, 2014. The filing primarily serves to disclose the pricing of a public offering of common units. Dynagas Partners is a foreign private issuer formed in May 2013 to own, operate, and acquire liquefied natural gas (LNG) carriers employed on multi-year charters. As of the filing date, the company's fleet consisted of three LNG carriers, each with a capacity of approximately 150,000 cbm.
Key Financial Metrics and Capital Structure
The filing details a significant capital raise and refinancing plan rather than reporting operational financial results such as revenue or profit for the period.
- Public Offering: Priced at $22.79 per common unit for 4,800,000 units.
- Over-Allotment Option: Underwriters granted a 30-day option to purchase up to an additional 720,000 common units.
- Existing Debt: $214.1 million currently outstanding under an existing senior secured revolving credit facility.
- Proposed New Debt: A new $340 million senior secured revolving credit facility is planned to be entered into following the offering.
- Revenue/Profit/Cash Flow: The filing text does not provide specific values for revenue, profit, cash flow, or operating margins for the reporting period.
Material Changes and Strategic Transactions
The primary material change is the execution of a capital raise to fund an acquisition and refinance existing debt.
- Acquisition Funding: Net proceeds from the public offering will fund a portion of the purchase price for the "Arctic Aurora," a 2013-built ice-class LNG carrier owned by Dynagas Holding Ltd. (the Company's sponsor).
- Debt Refinancing: The new $340 million credit facility will be used to refinance the $214.1 million outstanding under the existing facility and fund the balance of the Arctic Aurora acquisition.
- Closing Date: The offering is expected to close on June 18, 2014.
Guidance, Risks, and Contingencies
The filing contains forward-looking statements regarding the completion of the offering and the acquisition.
- Contingency: If the acquisition of the Arctic Aurora is not consummated, the net proceeds from the offering will be used for general partnership purposes.
- Risks: Management notes risks that the offering or acquisition may not be completed. The company states that assumptions regarding future events are subject to significant uncertainties and contingencies beyond their control.
- Underwriters: Joint book-running managers include Credit Suisse, BofA Merrill Lynch, Morgan Stanley, Deutsche Bank Securities, and Barclays. Co-managers include ABN AMRO and DNB Markets.
Investor Verification Checklist
- Verify the final closing date of the public offering (expected June 18, 2014) and whether the over-allotment option was exercised.
- Confirm the successful consummation of the Arctic Aurora acquisition and the final purchase price.
- Review the terms of the new $340 million senior secured revolving credit facility once finalized.
- Check subsequent filings for the actual use of proceeds if the acquisition is not completed.
- Monitor the company's leverage ratios post-closing given the combination of new equity and the new credit facility.