Shares
of Capital Product Partners (CPP) gained traction Monday after storming the liner
space with the acquisition of two containerships from its sponsor, Capital
Maritime & Trading.
The Nasdaq-quoted shipowner watched its
stock climb 4.71% to $7.51 in the hours following the opening bell as analysts
raced to weigh in on deal in which the company traded a pair of VLCCs for the 7,943-teu Archimidis (built 2006) and
Agamemnon (built 2007).
In subsequent notes to clients, shipping researchers
at Deutsche Bank, Evercore Partners and Wells Fargo Securities applauded the Evangelos
Marinakis-led operator’s commitment to the preservation of an annual distribution
of $0.93 per unit.
"The
containerships are employed to AP Moller-Maersk at $34,000/day until
August/November,” wrote Evercore’s Jonathan Chappell. “As a result, CPP is not
only diversifying its end-market exposure, but it is lessening its counterparty
exposure to its sponsor and increasing the fixed-rate cash flow on its fleet
for the next three years.”
Justin
Yagerman of Deutsche Bank was quick to point out that the tankers CPP agreed to hand over to Capital Maritime were due to earn $28,000 per day and noted
that over a third of its fleet is still on charter to its sponsor “generally at or
above market rates” on the heels of the swap.
“What
still remains unclear is the catalyst for the transaction: was it driven by
Capital Maritime’s desire to exit loss generating charters, CPP’s need for
stronger cash flow or both?,” he asked. “Either way, it raises the question of
longer-term strategy of CPP and its relationship to its sponsor."
In a statement filed earlier in the day the Greek shipowner said the transaction was "unanimously" recommended by the partnership's Conflicts Committee and unanimously approved by its board of directors.
