Bidding demand for the bond issue by Capital Product Partners LP (CPLP) is close to record level. The five-year senior unsecured bonds by the Nasdaq-listed shipping company owned by Vangelis Marinakis are aimed to draw 150 million euros at a range of 2.6%-3%.
The issue is addressed at the local capital market and private investors, and has already been oversubscribed, with estimates putting its coverage ratio at two or even three times the asking capital. Books opened on Monday and will close on Wednesday.
Issuer CPLP is implementing a significant investment program in six state-of-the-art liquefied natural gas (LNG) carriers. “This investment will allow us to play an important role in green development, as natural gas is expected play a key role in energy transition,” as CPLP chief executive officer Jerry Kalogiratos, tells Kathimerini.
“At the same time it will strengthen our fleet by reducing the environmental footprint of our fleet, given that these vessels use natural gas for their propulsion, resulting in the reduction of greenhouse gas emissions by 23%,” he adds.
“We completed the purchase of the first three ships in September with an investment of some $600 million, and we are now proceeding with the issue of a corporate bond up to €150 million, tradable in Athens Exchange, to partly finance the purchase of another LNG carriers,” notes Kalogiratos.
All six vessels are now among the most technologically developed the global fleet boasts, boasting long-term chartering agreements with major energy companies such as BP, Cheniere and Engie. The CPLP business model typically employs its ships in long-term deals securing steady cash flow that are not affected by chartering market fluctuations.
“After the acquisition, our fleet will number 21 ships, mainly LNG and container carriers, with contract revenues up to $2.1 billion and duration up to 7.9 years, offering our shareholders and creditors significant visibility in the corporation’s cash flows,” explains the CPLP CEO.
The company was founded by the broader Marinakis-owned shipping group and has been listed on Nasdaq since 2007. Kalogiratos also notes that the shipping firm “uninterruptedly pays dividend to its shareholders currently adding up to almost $800 million at the moment.”
“For the issue of the bond we have exclusively chosen the local capital market, giving the chance to the Greek investment public to participate in our investment plans, confirming our confidence in the growth momentum of the Greek economy,” says the CPLP manager.
Market sources note that “the decision of the Marinakis group to issue a bond in the Greek capital market bolsters the shipping bonds market in ATHEX and strengthens the ties of the Greek ocean-going shipping with the country.”
At the same time it also constitutes an attractive offer to the Greek investing public seeking reduced-risk returns in an international environment of low to zero interest rates.