Dynagas LNG Partners is using a fresh loan to help eliminate its existing debt.

The New York-traded gas carrier owner announced Thursday a new $675m senior secured loan that will be used, alongside cash on hand, to pay down a $470m loan and a $250m in bonds, totalling $720m.

The company has $112m in cash and equivalents, according to Securities and Exchange Commission filings.

Chief executive Tony Lauritzen called the move "transformative.".

"The credit facility provides the partnership with reduced cost of debt relative to the existing one and a simplified debt structure with a clear and visible path toward deleveraging through a significant increase in debt amortisation," he said.

"The partnership has in place long term charter contracts with international energy companies, generating cash flows that will be channelled towards the amortisation requirements of the credit facility, building equity over time."

The loan was hashed out with "leading international banks" and will be repayable over five years in quarterly payments, plus a balloon payment after five years. The margin is Libor plus 300 basis points.