MARKETS

Capital Product Partners bond gets oversubscribed more than five times

capital-product-partners-bond-gets-oversubscribed-more-than-five-times

Demand for the Capital Product Partners LP (CPLP) bond issue of 150 million euros proved particularly strong, as it was oversubscribed 5.3 times, according to the definitive results of the auction released late on Wednesday.

The corporate bond issue by the Vangelis Marinakis-owned company received bids adding up to €801.3 million, with the yield and the interest rate coming to 2.65%, within target.

Two thirds of bonds (66.6%) went to private investors and the rest to institutional creditors.

CPLP will use the €150 million drawn for financing its “green” strategic investment plan totaling €1.2 billion.

“We are pleased to announce the closing of our first shipping bond on the Athens Exchange. The successful bond issue further diversifies our company’s sources of financing and allows us to execute on our business plan with an attractive overall cost of capital. The bond was issued at the low end of the yield range based on exceptionally high demand,” said Chief Executive Officer Jerry Kalogiratos.

The settlement date is Friday and the trading of the bonds on the Athens Exchange is expected to commence on Monday, October 25.

CPLP has been listed on the NASDAQ market since 2007.

The funds raised from the issue will partly finance the acquisition of modern and environmentally-friendly liquefied natural gas (LNG) vessels, following the acquisition of another three X-DF LNG carriers, as announced on August 31. The latter three vessels are expected to be acquired at an average price of $207.7 million per vessel with aggregate contracted revenues of approximately $429 million and an average aggregate daily rate of approximately $70,650 per day, the company announced.

The three additional vessels are all built in 2021 and are chartered to BP Gas Marketing Limited, Cheniere Marketing International LLP and Engie Energy Marketing Singapore Pte Ltd with a remaining charter duration of 6.3 years, which includes in the case of the BP time charter the first two optional periods.

A few months ago another shipping company, Costamare of the Konstantakopoulos family, had also made a market foray, drawing €100 million, with total offers exceeding €665 million.