Dynagas LNG Partners has fully paid off $675m worth of debt after completing a sale-and-leaseback deal on four of its six ships.
In a first-quarter results statement, the George Procopiou-backed, US-listed shipowner signed up to a sale-and-leaseback agreement with China Development Bank Financial Leasing Co on 19 June.
It covered the 149,700-cbm LNG carriers Clean Energy and Ob River (both built 2007), Amur River (built 2008) and 155,000-cbm Arctic Aurora (built 2013) — for up to $345m.
Dynagas said that on 27 June it used these proceeds, together with other sources of liquidity, to repay in full the $408m of outstanding debt from its $675m credit facility before its maturity in September 2024.
“After a protracted period of strategic deleveraging, we now enjoy significantly lower debt levels and a flexible financing package with two of our LNG carriers debt-free,” the company said. “This positions us well in the next phase of the partnership’s development.”
Dynagas said that under the agreement it bareboat-chartered back the steam turbine-driven Ob River, Clean Energy and Amur River for five-year periods and the tri-fuel diesel-electric Arctic Aurora for 10 years from 27 June 2024.
The financing amount is 65% and 85% of the market price on delivery of the steamships and the Arctic Aurora, respectively.
It is scheduled to be repaid in 20 and 40 consecutive quarterly instalments, respectively.
At the end of the bareboat charter period, the partnership is obliged to repurchase the vessels for 20% of the financing amount of the three steamships and 15% of the Arctic Aurora.
The company, which has two ships on charter to Singapore-based Russian interests, also commented on the latest Western sanctions banning reloads of Russian cargoes in European Union terminals.
It said that while its ships are working in compliance with applicable US and EU rules and regulations, it is assessing the impact the new sanctions will have on its operations.
Dynagas’ first-quarter net income nudged up to $11.8m from $9.6m in the same period a year earlier.
It said this was mainly due to the increase in the gain on its interest rate swap transaction and a decrease in interest and finance costs.
Voyage revenues rose slightly to $38.1m from $37.3m in the first quarter of 2023.
Dynagas attributed the rise to the revenues of the Arctic Aurora, which began its new time charter with Equinor in September 2023.
The shipowner said its six LNG carriers were fully utilised throughout the quarter and have an average remaining contract term of 6.6 years with no contractual vessel availability until 2028.
It reported average hire returns of $72,770 per day compared with $62,130 per day for the same period of last year.
But vessel operating expenses rose to $7.7m for the quarter, corresponding to a daily rate per vessel of $14,103, against $7.3m or $13,511 a year earlier, due largely to increased planned technical maintenance on the ships.
The company estimated contracted time charter coverage for 100% of its fleet this year and 2025, and 99% for 2026.
