Capital Product Partners Swaps Pair of VLCCs for 7,943 TEU Containerships

M/T Achilleas, image courtesy CPLP

ATHENS, Greece – Capital Product Partners L.P. (NASDAQ: CPLP) today announced that it acquired from Capital Maritime & Trading Corp. (CMTC) two post panamax container vessels, the M/V Archimidis and the M/V Agamemnon.  Both 7,943 TEU ships were built at South Korea’s Daewoo Shipbuilding and Marine Engineering in 2006 and 2007 respectively.

Both the Archimidis and the Agamemnon are employed on time charters with Maersk Line at a gross day rate of US$34,000 per day with earliest redelivery in November 2015 and August 2015, respectively. Maersk Line has the option to extend the charter of both vessels for an additional four years at a gross day rate of US$31,500 and $30,500 per day, respectively for the fourth and fifth year and $32,000 per day for the final two years. If all options were to be exercised, the employment of the vessels would extend to July 2019 for the Agamemnon and December 2019 for the Archimidis.

As consideration for the acquisition of the two container vessels, CPLP contributed the 297k DWT VLCCs M/T Alexander The Great and the M/T Achilleas to CMTC.  Both ships were built in 2010 at Universal Shipbuilding Corporation in Japan and were under charter to CMTC at $28,000 per day.

The transaction has been unanimously recommended by the Partnership’s Conflicts Committee and unanimously approved by the Partnership’s Board. The effective date of the transaction was December 22, 2012.  As a result of this transaction, the Partnership repaid $5.2 million in debt. CMTC has waived any compensation for the early termination of the charters of M/T Alexander the Great’and
M/T Achilleas.  The transaction is expected to generate a non-cash book loss which will not impact cash flow or the Partnership’s distribution capability.

Extension of M/T Arionas Time Charter

In addition to the above transaction, the M/T Arionas (36,725 DWT, Ice 1A IMO II/III, built 2006 Hyundai Mipo Dockyard Co Ltd) has extended its employment with CMTC for an additional 12 months at an increased gross rate of $13,800 per day with earliest expected redelivery in September 2013.

Mr. Ioannis Lazaridis, Chief Executive and Chief Financial Officer of the Partnership’s General Partner, commented:

“We are very pleased to have concluded an important and accretive transaction for the Partnership by further diversifying our revenue stream and adding two high specification container vessels with long term time charter employment to a highly reputable counterparty such as Maersk Line. The Partnership’s diversification into the container market with the addition of these two 8,000 TEU container vessels provides longer term cash flow visibility and exposure to a segment with attractive long term fundamentals.

The transaction increases CPLP’s forward charter coverage and the average remaining duration of our time charters to 4.1 years.

Furthermore, it demonstrates the General Partner’s ability and continuous commitment to the Partnership to find accretive transactions to support and grow the $0.93 annual distribution. Finally, after taking into account the recent developments in Overseas Shipholding Group – one of our charterers – I would like to reiterate our commitment to $0.93 per unit annual distribution guidance going forward.”

Following this transaction, Capital Product Partners fleet consists of twenty-five high specification vessels including two 7,943 TEU containerships, four Suezmax crude oil tankers, 18 modern MR (Medium Range) tankers, all of which are classed as IMO II/III vessels, and one Capesize bulk carrier.

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