Thank you for standing by ladies and gentlemen and welcome to the Capital Product Partners Second Quarter 2015 Financial Results Conference Call. We have with us Mr. Jerry Kalogiratos, Chief Executive Officer and Chief Financial Officer of the company. At this time all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. [Operator Instructions]. I must advise you this conference is being recorded today Thursday 30, of July 2015. The statements in today's conference call that are not historical facts, including our expectations regarding developments in the markets, the expected use of proceeds from the offering of our common unit, feet development, our ability to pursue growth opportunities, our expected charter coverage ratio for 2015 and expectations or objectives regarding our quarterly distributions and annul distribution guidance, maybe forward-looking statements as such as defined in Section 21E of the Securities Exchange Act of 1934 as amended. These forward-looking statements involve risks and uncertainties that could cause the stated or forecasted results to be materially different from those anticipated. Unless required by law, we expressly disclaim any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in our views or expectations to conform to actual results or otherwise. We assume no responsibility to the accuracy and completeness of the forward-looking statements. We make no prediction or statement about the performance of our common units. And I would now like to hand the conference over to your speaker today, Mr. Jerry Kalogiratos. Please go ahead, sir.

Thank you, Jenny and thank you all for joining us today. As a reminder we will be referring to the support slides available on our website as we go through today's presentation. On July 23, 2015, our Board of Directors declared a cash distribution of $0.2365 per common unit and $0.21775 per Class B unit for the second quarter of 2015, which represents an increase of about $0.20 compared to the common and Class B unit distribution for the first quarter 2015 and the total increase of about $0.40 since the beginning of the year. The second quarter common unit cash distribution will be paid on August 14 to unit holders of record on August 7. The second quarter Class B unit distribution will be paid on August 10 to unit holders of record on August 3. The partnerships operating surplus for the quarter amounted to $31.7 million, which is $4.8 million higher than the $26.9 million of the second quarter of 2014. Common unit coverage for the fourth quarter 2014 stood at one times, due to the dry-docking and related off hire for three of vessels during the quarter. We expect that the full impact of the two drop down vessels we took delivery towards the end of the second quarter and the recent charter renewals at higher rates should help improve the unit cover that’s going forward. Four of our vessels who’s charters entail a profit share element generated $2 million in profit share revenue on the back of a strong growth and product spot market environment since the beginning of the year. In June 2015 we took timely delivery of two additional dropdown vessels, one Eco-Flex, Wide Beam 9000 teu container ship and one Eco-MR product tanker, both with long term charters attached, which represents the second…

Thank you very much indeed sir. [Operator Instructions]. And your first question from Bank of America/Merrill Lynch comes from the line of Ken Hoexter. Your line is now open, sir.

Great, good morning. Hey Jerry, on the new distribution policy, I just want to understand that a little bit deeper. When you said it doesn’t include acquisitions are you planning on accelerating around acquisitions or is that a steady irrespective of acquisition?

The distribution guidance is steady respective of the acquisitions. It is based on the five drop down vessels we agreed to acquire in the third quarter of last year and as you know, we have taken successful delivery of three out of the five. Any additional drop downs or growth in our asset base could be a reason to potentially revise our distribution guidance upwards.

Yes, understood. Thank you. So as you now have migrated away from Capital Maritime dropping from the 13 down to nine and even with an enlarged fleet, what are your thoughts on counterparties going forward in this rising market. Do you look to move away from Capital Maritime into more of the market or is that kind of a comfort zone that you have now at that level?

Capital Maritime as you know is an active player in the spot markets. They have an extensive spot platform and they have chartered vessels over the partnership now for a number of years. They have been also at points that the period market has been less liquid. They have provided more liquidity for us in terms of period coverage and that’s why you have seen us fixing a little more with the Capital Maritime. Now that we’ve seen the increased liquidity in both, let’s say the Suezmax and more importantly the product tanker market, we will continue to fix with both Capital Maritime and other parties and in the end it is very much depends on what is available and what is the highest bid at the time.

Okay, thank you for that. And last question just on the rates, I guess that you’re seeing as you see these accelerating rates. You did mention on the container side you had slides on the product and Suezmax, but you noted a couple of containers are coming up for renewal. Can you walk us through you views on the market there and then I’ll come back on the product side after that?

Well, the charters of the two containers hold a number of options for another three years for these vessels, but still as you know the container market, especially in the post Panamax segment is quite liquid. So far post Panamax vessel supply remains limited and all new builds for 2015 and 2016 have found deployment. On the other hand, we are in the midst of the usual summer dull period if you want off season and we will need to see how this year’s Christmas peak will affect the charter market. We yet need to see a few more fixtures in that segment in order to better understand where this market is, because unlike the lets say tanker or dry bulk market, they have much fewer fixtures. But recently we have seen fixtures anywhere between $25,000 to $28,000 for similar kind of vessels.

Wonderful! And then just to wrap up on the product side. Given the spike in rates that we’re seeing more recently, I got that was a great walk through on slide eight in terms of kind of the progression of long term rates. Are you seeing stronger activity in terms of your bid for upcoming renewals?

Sure. As the spot rates are very strong, many charterers including your usual suspects, the oil majors, the traders, they are trying to get unit coverage. Owners who enjoy the very strong sport earnings and are increasingly more optimistic about the future, they refuse to fix period and as a result you have seen a charter that’s not only a bit higher, but also for a longer period. So recently you have seen for example traffic [indiscernible] 2006 build MR for two years at $18,000 or Cargill for 12 months at 18.5. Having said that, the one year period mark, it is very much spots dependant and position dependant. So if you’re giving away good front haul voyage, the charterers will pay even more. So there is definitely a lot of activity and demand and I think the positive thing and as you have seen from our fixtures is that we have been able to find more interest for longer fixtures than one year at this point.

Wonderful, Jerry. I appreciate the thoughts and insight.

Thank you.

Thank you very much indeed. And now from UBS Securities you have a question from Spiro Dounis. Your line is now open sir.

Hey, good morning Jerry and congratulations on the recent promotion.

Thank you, Spiro. Good morning to you.

Just wanted to touch on the six right of first refusal assets real quick. Just wondering if you can give us any color on whether those assets, those vessels have started to have been I guess been chartered. I know they start to deliver I believe at the end of the year and if they haven’t been chartered yet, just any timing around that, if you can offer anything.

Well, one of the six vessels has been fixed. The rest are still unfixed and they very much depend on Capital Maritime as to what they tend to do with these vessels. So there is not much to add from this perspective. But in any case I think we have to focus in taking delivery of the already contracted dropdowns going forward and when and if we can do an accretive transaction and assuming that these assets find proper employment we will also look at them.

Okay, that makes sense. And you mentioned at the end of your prepared comments there that I guess you could start looking at maybe acquisition opportunities outside of Capital Maritime. I was just wondering maybe you’d offer some guidance on what that might look like. Could you maybe do a sale leaseback type structure where you’re buying from one of your customers and leasing back to them or would you be able to buy something on the water and then fix it yourself?

Well, we’re pretty open to any opportunity and we are always scan the markets for opportunities, but obviously whatever we do has to be accretive, so there is nothing specific that we have in mind, but to the market, as you know the S&P markets are quite liquid and quite sizable. So we always look at opportunities, but the prime criteria needs are obviously accretiveness at this point.

Okay, that makes sense. And just one last one – in terms of I guess financing future growth, obviously unit price is probably not where you want it to be today and I guess other options there maybe levering up a little bit more than you’ve done in the past and with the stronger balance sheet now I suppose you’d be more easily able to do that and I would imagine at better terms too. And I guess another option is maybe hitting a preferred market to the extent its open. I’m just wondering how your thinking about financing future growth. Broadly speaking I realize you can’t be that specific.

Well, with regard to leverage, which is one part that I can probably answer is that we will continue to aim for 50/50 going forward or at least something in that range. So I don’t expect it to deviate a lot from that. With regard to other opportunities we are of course open, but there is nothing specific that I can comment at this point.

Got it. I appreciate the color Jerry. Take care.

Thank you, Spiro.

Thank you very much indeed, sir. Now from Bank of America/Merrill Lynch, we now have a question from the line of Shawn Collins. Your line is open sir.

Great. Jerry, can you hear me?

Hi Shawn.

Okay, great, great. Hey good morning, good afternoon. Thanks for taking my question. Hey Jerry, I just wanted to ask, what kind of rate difference are you observing in the market between Eco design, MR’s versus traditional MR’s. Can you comment on that?

Sure. You have seen a number of fixtures and to be perfectly frank, this has differed a lot and this has also to do with the period duration, the position of the vessel, as well as the so called first or second generation Eco or when they were fixed, because as you can imagine the premium was different a year ago compared to what you see recently. As a rule of thumb I would say that today expenses are up around $1,000, maybe $1,500, but again it very much depends on other factors such as duration and position.

Okay, great. That’s helpful and somewhat in context with the past, kind of maximum differential of almost $3,000. Just a second question; Asian shipyards have recently been in the news of large financial losses. I know you have strong relationships with the yards and are working with them for a long time. Do you expect any potential consolidation or capacity rationalization or the change in the landscape of major shipyards?

That’s an interesting question Shawn. I think we will see some consolidation and you have seen various shipyards in the news who are expected to take, to consolidate other smaller shipyards that have issues, that have had financial issues now for some time. I think in a way this has been positive now for some time for the industry and the rehabilitation process that some of these shipyards have gone through. It means that they have been out of competition. So as the banks that control them have deterred them from taking orders below cost, and especially on the MR product tanker side, we have seen product tanker ordering remain at the bay and this has been definitely positive for supply. At least three shipyards in Korea that billed MRs have had financial issues. So I’m not sure to what extent we will see capacity rationalization, but definitely what is happening in Korea is good for the supply side.

Okay, great. That’s helpful Jerry. Just my last question and I know you and I have touched upon this offline before, but I just wanted to touch upon the Greek volatility and the social and political situation there. I just wanted to ask, is this having any operational impact on your business and if you can just comment on that please?

Sure. As you know capital products is an international Maritime MLP and its registered under the laws of Marshall Islands and as such is not subject to Greek corporate tax. It controls vessels that sail under the Liberian or the Marshall Islands flag and they operate worldwide. Commercial management as well as technical management of these vessels is done by capital ship management who have corporate headquarters in Perouse, but the management is also affected by their other international offices in New York, London, Costanzia in Romania, as well as Singapore. So there is very little actual exposure to Greece. In terms of the financial side, as you know our business is U.S. dollar based. We charter our vessels to international companies and all our debt facilities are with international consortia led by the likes of HSH, Credit Agricole and ING. We have immaterial balances, cash balances with the Greek banks, so there has been very little impact that the partnership has failed from the Greek crisis.

Great. That was helpful Jerry. Thank you for the time and insight.

Thank you.

Thank you very much indeed. And now your next question from Raymond James comes from the line of Ben Brownlow. Your line is now open.

Hey, good morning Jerry.

Good morning Ben.

Just as a follow up, on the distribution growth which is pretty steady and I know your implying I guess two-tenths of $0.001 sequential increase on the third quarter. With that annual growth target, that is within the annual growth target of 2% to 3% that you said, but its trending towards the low end of that 2% and just now that you have your quarter of three drop downs flowing through the increase in re-charter rates locked in for several tankers, I would expect to higher coverage ratio in the third quarter. Just why not get us a slightly more aggressive stance in our distribution growth?

I think that you will find that the distribution growth by the end of the year compared to year end last year is just – and if you assume its about $0.20 increase. It’s just above the 3% growth and so hopefully we will end up on the upper end of our guidance. But overall I think the idea very much remains that the distribution growth guidance that we gave is tied to asset growth. Effectively the incremental cash flow expected from the drop downs will support this distribution growth for the foreseeable future. Now as you say the charter rates have been increasing and this will definitely help us build our distribution coverage and reserves and in the long term this will also underpin this distribution guidance. Don’t forget that our balance sheet is quite strong, so that should help us use this proceeds either as a cushion for a rainy day or potentially as a equity for acquiring more assets.

Great, thank you. And then just two quick ones on the expense side. Can you quantify the dry docking expenses in the second quarter and you touched on dry docking schedules for the third quarter; if you could just repeat that. And then G&A dropped off a little bit sequentially from the first quarter and year-over-year. Any color there?

On the dry docking total cost expense for the second quarter where it was about $1 million and had to do with the dry docking of three of our vessels. We have another two vessels dry docking in the third quarter. That is the Cape Agamemnon and the Motor Tanker Atrotos would not expect any other dry dockings unless we find that there is an opportunity to dry dock a vessel ahead of its time, depending on position mostly. So that’s it on the dry docking. With regard to 2016 and with regard to special surveys in 2016 and after that we have five scheduled for 2016, two MR product tankers, two Suizmax’s and one 8,000 DU container and another three in 2017. So finally on the SG&A we had a small reduction compared to last year as last year we had increased expenses on the back of the IDR reset and certain expenses related to that.

Great, thank you for the color.

Thank you.

Thank you very much indeed sir. [Operator Instructions] There appear to be no further questions; therefore I shall pass the call back to you for closing remarks. End of Q&A

Thank you all for joining us today and please do not hesitate to contact me if you have any further questions. Thank you.

And with many thanks to our speaker today, that does conclude the conference. Thank you all for participating and you may now disconnect. Thank you, Mr. Kalogiratos.

Thank you, Jenny.

All the very best. Bye-bye.

Thank you. Bye-bye.