Business Context and Reporting Period
This Form 6-K filing by Capital Product Partners L.P. (CPLP), a Marshall Islands master limited partnership, is dated May 10, 2007. The report discloses the successful delivery of the company's ninth medium range (MR) product tanker, the M/T Atrotos, on May 8, 2007. The vessel was delivered by Hyundai Mipo Dockyard Ltd. in Korea.
Key Financial Metrics and Fleet Status
- Fleet Expansion: Following the delivery of the M/T Atrotos, CPLP owns nine MR Ice Class 1A product tankers.
- Vessel Specifications: The M/T Atrotos has a carrying capacity of 47,786 dwt and is ice strengthened (Ice Class 1A).
- Charter Terms: The vessel is fixed under a three-year time charter with Morgan Stanley Capital Group Inc. at a base rate of $20,000 per day.
- Profit Sharing: The charter includes a 50/50 profit-sharing arrangement for revenues exceeding the base rate when spot rates are higher.
- Capital Expenditure: The purchase price for the M/T Atrotos is $56 million.
- Funding: The acquisition is fully funded through a drawdown on the company's existing revolving credit facility.
Material Changes and Pipeline
The M/T Atrotos represents the first of seven additional MR product tankers CPLP has agreed to purchase from Capital Maritime & Trading Corp. The remaining six vessels are scheduled for delivery as follows:
- Three Ice Class 1A sister vessels scheduled for delivery in 2007.
- Three MR product tanker sister vessels scheduled for delivery in 2008.
All fifteen vessels in the current and pipeline fleet are under medium to long-term charters to BP Shipping Limited, Morgan Stanley, and Overseas Shipholding Group Inc.
Outlook and Risks
Management indicates that the remaining six vessels in the purchase agreement will be under time or bareboat charters commencing at the time of delivery. The filing includes standard forward-looking statements disclaiming any obligation to update future predictions regarding unit performance. Risks include uncertainties that could cause actual outcomes to differ materially from expectations.
Investor Verification Checklist
- Verify the utilization status and charter rates of the remaining six vessels in the pipeline.
- Confirm the remaining capacity and terms of the revolving credit facility used to fund the $56 million purchase.
- Monitor spot market rates to assess the potential impact of the 50/50 profit-sharing clause on the M/T Atrotos.
- Review the delivery schedules for the 2007 and 2008 vessels to ensure alignment with the company's growth strategy.