Thank you for standing by and welcome to the Capital Product Partners Second Conference Call on the Third Quarter 2015 Financial Results. 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 Friday 30, of October 2015. The statements in today's conference call that are not historical facts, including our expectations regarding developments in the markets our expected charter coverage ratio for 2014 and 2015 and expectations regarding our quarterly distributions 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 for the accuracy and completeness of the forward-looking statements. We make no prediction or statement about the performance of our common unit. And I would now like to hand over to your speaker today, Mr. 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 supporting slides available on our website as we go through today's presentation. On October 21, 2015, our Board of Directors declared a cash distribution of $0.2385 and $0.21975 per Class B unit for the third quarter of 2015, which represents an increase of $0.2 compared to the common and Class B unit distribution for the second quarter 2015 and the total increase of about $0.6 since the beginning of the year. The third quarter common unit cash distribution will be paid on November 13 to unit holders of record on November 6. The third quarter Class B unit cash distribution will be paid on November 10 to class B unit holders of record on November 3. The partnership's net income for the third quarter stood at $13.8 million a $2.5 million improvement on the $11.3 million net income recorded in the third quarter of 2014. The partnership's operating surplus for the quarter amounted to $33 million, which is $3.2 million higher than the $29.8 million in the third quarter of 2014. Common unit coverage for the third quarter stood at 1.04 times, partly due to the dry-docking and related off hire for two of vessels during the quarter and as the fourth drop down vessels was delivered to us towards the end of the quarter. In particular on September 18, we took delivery of the Eco-Flex Wide Beam 9000 containership, CMA, CGM, Uruguay, which represents the fourth vessels in the series of five dropdown vessels we agreed to acquire in 2014. Upon delivery the vessel commenced its five-year charter with CMA CGM. Moreover during the quarter, the partnership secured period employment and extended time charter contracts for five of its…

[Operator instructions] Your first question comes from the line of Jon Chappell. And your line is now open.

Thank you. Good afternoon Jerry

Hi Jon.

First question has to do with the containerships. It's a market somewhat unfamiliar to us. What's the realistic employment opportunity for those vessels as delivers them and kind of couple of parts there. First of all, how quickly do you think you could employ them? Second is there any liquidity whatsoever in contracts of three years or more and then third is it possible that Capital Maritime as the sponsor could them on and kind of bridge any gap in the softness in the market?

Thank you, Jon. Currently I remember on the Archimedes the status is as follows. The amendment is completing its dry-dock as we speak and that is expected to be redelivered from lines in mid November. The chartering prospects for both vessels are being evaluated as the various operators need to readjust their own fleets to the revised growth expectations before they start looking to take endowments. Now, we're in dialogue with various operators about potential employment as we believe that in the near to medium term, some of them will take advantage of the opportunity to charter in large and modern quality tenants such as the [indiscernible] and replace other more expensive, smaller capacitor so such as the 6500 teu. In additional I think it’s important to note that the specification of both vessels, the [Archimedes] [ph] should give our customers flexibility as they can be applied in many different rates. The fall in oil and bunker prices allows both vessels to compete effectively also with the 9,000 teu eco vessels that have appeared as of late. Now in the medium to long term what we will be looking as catalyst for market improvements would be as previously discussed an improvement in European demand, which should boost the far East Europe volume which are very important for post Panamax trade. Cascading for post Panamax is into the sub let's say 6500 teu range, increase the evolution of the older vessels and of course the new Panamax looks. Now with regard to the charted durations it very much depends on the liner appetite going forward as well as in the end what’s on offer and what we want to take. Traditionally this type of vessels when they first appeared in the market they were long-term contact type of vessels five to ten years or even longer in certain cases. As more of them come up in the spot market you'll find that the period is more flexible. Again we will decide when and if we have an offer depending on the rate as we will prefer to go shorter when there is a lower rate on the table and longer when there is a higher rate or closer to the other average. So I think it's still pretty mature to answer any questions until we get more insight as to how this market will develop.

Okay, and can you just give us a sense of where the market stands today not necessarily what you're negotiating but if we were to look at some type of industry average of what a one year contract might be on just under 8,000 teu containership where is the market for that today?

Well this is quite illiquid market, so there are not many vessels like that, but it's not unlike the dry bulk of the tanker market that you don’t see many of them being fixed every week. The last time is closer to the high advantage but it is not representative of where the market is going to end up. I think the next fixture is going to be important.

Okay. And then I guess the one part I missed before is this something I know you can't really speak for them but could you foresee a situation where maybe the operators aren’t ready to take in tonnage from anybody right now to capital Maritime kind of backstop this for a short period of time to bridge the gap until the market improves.

Well unlike the tanker market where the Capital Maritime has a substantial spot presence it does not have any links to the line of market. So this is not for something where Capital Maritime could step in. There the market is much as you know is dominated by the line of companies, there is no real room for operators.

Okay. I’ll ask one more housekeeping one and then I’ll turn it over, you mentioned the containership doing the dry dock but you also said two product tanker, which product tankers are doing the dry dock and what’s the estimated time for this.

Well, that will depend on certain employment opportunities as you know we have a number of sister vessels and the reason that we would not like to name specific vessel at this point is because we might depending on the employment opportunities -- we might dry dock one vessel or the other if they are in place for the delivery under these employment opportunities. I cannot say more at this point but I think you heard earlier that we like fixtures like the one that we announced on Petrobras side and we hopefully we can do more than.

Okay, sounds good. Thank you, Jerry.

Thank you very much indeed. Your next question comes from the line of Deutsche Bank from the line of Amit Mehrotra. Your line is open.

Thanks. Hi Jerry, how are you?

Hi Amit I’m good, yourself.

Good. Thank you. First question is just on the coverage outlook, I don’t have to tell you we've seen some encouraging movements in the product tanker at time charter market. And I’m just trying to understand what that could mean for perspective coverage if we look in 2016. So if we extrapolate the recent inflection over the expirations over the next six to 12 months the number I get to is 1.2 times on coverage as you exit 2016, is that in the neighborhood of where you see if not exactly, but may be directionally from where we are today.

Amit that’s a good question well, ultimately cover -- unit covers will also be dependent on the employment of the two 8,000 teu vessels and as discussed we have little visibility at this point. As there was a sudden drop in demand I think caught everybody in the market by surprise. So, we'll need to wait for better understanding given the employment prospects under eight. Now, I think it’s important to highlight is that our distribution or distribution growth objective remains in place, the recent weakness in the container market affects only these two 35 vessels. As you correctly pointed out, we have a number of other vessels coming off charter in a very strong product and crude tanker markets. So, given the positive outlook of the tanker market the recent fixtures were a number of our vessels all have increased rates as we discussed. As well as the contracted drop down vessels, we expect that we can deliver of the distribution and distribution growth of $0.02 per quarter and provide adequate unit coverage.

Great, no that’s very clear, just one question with respect to that distribution growth strategy if I may, you said essentially that you want enough cushion the coverage to say for a rainy day and that certainly makes sense given especially what we're seeing in the recent containership sort of rates, but I am just hoping can you give us some I guess quantitative metrics around what you mean by cushion. And what I mean by that is that if you do get directionally some improvement in the coverage as we move over the next 12 months and we get to that 1.2 times level, is that what you consider to be enough cushion and at that point, could the partnership decide to pivot the strategy and pass through some those incremental cash flow. If there are any beyond that 1.2 coverage to the distribution growth because one of the problems I think people have had with the partnership is the fact that the distribution growth while you guys are doing it steady has been a little bit a lackluster so, any indication on when you do get to that cushion more of it flow to the unit holder.

Amit well I think we have said in the past that we feel comfortable with our distribution and distribution growth basis 1.1 times coverage and this is what that we're going to aim for and given our current employment and given what we've seen today that’s something that we continue to have in mind.

Okay, one last question Jerry quick one on financing the leverage, the net leverage profile looks great and it implies I guess the opportunity for disproportion debt financing when you look at additional acquisitions down the line. Can you just talk about how you think about that, are you willing -- is the partnership willing to go to 60%, 70% LTVs or is 50% I guess where you guys want to max out that to sort of access the non-amortizing debt terms.

We will continue to aim for a 50-50 debt equity mix. It is also -- it’s not only a choice that we have that we have consciously communicated but also if you are looking for this type of financing with a certain non-amortizing period banks will not -- the commercial banks will not usually advance more and a lot more than that when comes to finance.

Yeah, okay Jerry thanks so much, happy Halloween, thanks.

Thank you, too.

Thank you very much. Now from Wells Fargo your next question comes from the line of Michael Webber. Your line is now open sir.

Hi, good morning Jerry, how are you.

Fine Mike.

I just want to -- couple of questions here, first I wanted to go back and revisit your two containerships and it's more recovering again, within the context and you just touched on it briefly within the context of your distribution guidance of 2% to 3%, can you maybe walk us through what scenarios you guys around before in the guidance. What scenarios you guys ran in terms of employment prospects of those vessels in terms of how much employees scenarios that guidance from even in worst case scenario or short term period where there is two ships.

Mike it is still early on to have more visibility into the post Panamax charter rates going forward, but what I can tell you is that even if the vessels were to remain idle, the two vessels for the full year 2016 and that would be unprecedented if you look back in 2009 when demand for container contracted by more than 9% after severe global GDP shock. There was limited idle time for container vessels. But even that remote scenario where both vessels were to be ideal for the full year we expect that our distribution coverage to be one times under distribution growth objective will be maintained. So that is what I can tell you today.

Now that’s what we are hoping to hear. Just quickly you went through the delivery schedule, which is very helpful for the capital fleet. I guess specifically on the MRs that you guys have coming into play relatively quickly as they deliver over the next call it I guess 18 months. Aside from the your leverage like its 30% and net debt cap is amongst lowest of mature marine MLPs can you talk a bit to what are their levers you could look at beyond common equity given where yields are to facilitate that growth be perhaps or some combination with the parent or maybe just kind of talk through kind what areas on your aquiver when it comes to kind of facilitating those drops.

Currently, we are in the process of taking delivery of finish the delivery of the five contracted dropdowns. As you know, by now acquired the 4/5 with the next one in January 2016, so we still have some if you want contracted growth left in. obviously there are the eight MR where we have the right of first refusal on and the other assets of Capital Maritime level or second hand market. We've common yielding today closer to 15.5% is something that we need to see improving before we consider common issue for sure. Now with regard to alternative means of course we will look at that if it make sense and we can put together an accretive deal, but I think it's important for us to complete our contracted dropdowns.

Got you. Okay. That’s helpful. Appreciate your time Jerry. Thank you.

Thank you. Mike.

Thank you very much indeed sir. Now for Stifel we have a question from the line of Ben Nolan. Your line is now open sir.

Thanks. Hey Jerry. So first I wanted to follow-up a little bit on Mike’s last question as it related to the potential drop down. I was curious if any of those eight MRs have already been contracted on longer term basis such that they would make sort of ideal drop down candidates from a cash flow perspective.

It has been reported in the market that one of these MRs has been fixed on a two-year deal and that’s the only vessel that has been fixed. There are of course other assets of Capital Maritime is developing as we speak, is talking to a number of charters. There is more detail back on to share with you at this point. But expect to have more over the coming months.

Okay, that’s helpful. Along those same lines obviously there is a refer in place for the 8 MRs, but there is not for the two VLCC as is that something that we should not consider necessarily as part of the potential pool of assets for drop down or would you expect that you might have a shot there as well.

Well traditionally we have grown from with assets drop down from Capital Maritime and we have diversified fleet crude products and containers so if we want we are bit diagnostic in terms of the asset as long as we have as we believe in the prospects going forward. But the most important I think criteria on whether we look at those vessels or not is with a couple Capital Maritime will find appropriate employment that would make them accretive to us. At this point no such employment is in place long chapter so it hasn’t really come up.

Okay. And remind me if there were a long term charter in place is there a criteria in which they would have to be offered to the partnership or there is no such requirement.

No for the crude vessels there is no such requirement. There is such requirement -- there is no agreement when it comes to product tankers.

Okay, that’s helpful and then lastly for me and this is a big deal but was just curious there was the one Suezmax that was returned early off of its charter and the Capital Maritime picked up the reminder of the charter at a better rate. I was just curious what the circumstances of that situation were.

Well there was a certain charter part dispute, which we took advantage of terminating the charter and we fixed at a higher rate. So it was in the end a better outcome.

Okay, but there is no -- there shouldn’t be any read through with respect to the fourth quarter P&L or any other potential situations like this on any of the other vessels I suppose.

At this point we do not expect any such effect as you know we have fixed in the past secondary and its affiliate and another three vessel, so it’s somebody that we know quite well.

Right. Okay and there was -- there is no read through on any of the other contracts.

No.

Okay. Alright that does it from me. Appreciate it, thanks Jerry.

Thank you, Ben.

Thank you very much indeed. Your next question from UBS comes from the line of Spiro Dounis and your line is now open.

Hi Jerry. Hope you’re doing well. I just had a quick question on drydock just I guess you had a few of that in the third quarter and some more come in the fourth quarter and sorry if I missed it could you quantify and maybe just from a cash flow perspective or an EBITDA perspective maybe how much that impacted results this last quarter and what the expectation would be if any in the fourth quarter.

Sure. Two vessels dry dock during the third quarter in addition to the another five vessels in the first half of 2015 that’s mainly because of the position of the vessels, the future regulatory requirement as well as employment prospectus favored drydocking earlier than initially scheduled. The impact of the expense dry-docked cost and related of higher for the third quarter so the cash cost together it will be higher amounted approximately to $2.2 million which effectively will have implied a unit covered of a 1.1 times for the quarter. Needless to say drydocking take place within 2015 means fewer dry-docks in the future. So with regard to the fourth quarter we expect another three vessels to be dry-docked namely the one container motor vessel amendment and two product tankers in the certain employment opportunities. Now the other cost of product tanker total cost that is deferred as well as OpEx cost for on a product tanker is let’s say between three quarters of a million to million.

Got it, okay that’s helpful. And then just in terms of I think Amit was trying to touch on this before Scorpio recently signed some three year charters on MRs for over a 20,000 and I realize that there is some one-off I guess circumstances around some of these MRs but I got to think that’s encouraging to you especially when you got eight eco MRs in the hopper. Is that a number that you’re going to be looking gone off there that then a expectation and your are you doing close to maybe 17,000 or 18,000.

Well, I think there is if you want a slightly differentiated the market for eco or non eco MRs today Clarkson for example would call one year rate for MR2s so eco MR2s and around $19,000 to $20,000 and two to three year deal between call it $17,000 to $18,000. Now in the end the actual rate depends on position especially for the one deal a good position that would give charters some income at the front end of the carrier would of course command but the premium when comes to the period rates. But also in terms of the trade I think the Scorpio fixtures also included some element of ice trading but of course if I am understand correctly what the exact rate is. But all in all yes I think you will find that for modern Eco vessels you can’t fix in the very high teams and for the older vessels between $18,000 to $19,000 for a year slightly less for longer period.

Okay, great and then just last one, just you kind of touched on this before, but I know 2% to 3% distribution guidance just wondering when you gave that guidance earlier this year obviously you knew about the containers and when they would be delivering, no expectation necessarily on what would happen, but what was the base case when you give 2% to 3% distribution guidance as to what would happen to those containers? Was it off hire for six months and then some lower rate or just you are trying sense of if you do end up re-chartering those quickly and re-chartering about something in the 30’s is that a situation where you could actually lift the distribution guidance because you are conservative.

Well, to be perfectly frank I think the nobody expected the slow down and it’s magnitude in the container market. You saw the biggest liner of the world come up with a profit warning just a few days ago on the back of this unaccepted slow down. So I wouldn’t say that we were expecting this kind of market and I don't think anybody will actually if anything the market that was improving the second quarter of 2015. So, don't forget that Maersk before they deliver the vessels they had a number of options and given the flexibility and our discussions with them previously we were expecting that there is good chance that they will continue with the vessels. Well, they haven’t and that once again I think underlines how important is to conservative when it comes to distribution growth objective and what I can say is that if despite this slowdown and despite that much weaker rates that the market is expecting for postponing today. We feel very comfortable with the distribution growth and the distribution coverage going forward.

Got it, got it, and I appreciate the color. Thanks Jerry, have a great weekend.

Thanks Spiro.

Thank you so much indeed. Now your next question from Raymond James comes from the line of Ben Brownlow, and your line is now open.

Hi, good morning Jerry

Hi, Ben.

Congrats on the recent tanker recharges, just to follow up on the containerships, what’s the shortest contract duration you would consider for those vessels and just given the rate pressure that you are seeing in the container market. Are there any discussion inner vessels in the spot market, I am just count to higher rate in the short term until the Bakken improves.

Ben, in the container market there is no such thing as the spot market that we have in the dry bulk or the tanker market, what we call spot market on the container side is the three to six months trade, which is probably what would be the shorter and of employment. At this point, we will be looking freshly to see what an offer because as previously discussed that liners given the sudden slow down and we are adjusting their own fleets before they look at new tenants. And secondly I think we have choice we would of course try to grow shorter if the rate an offer is on the lower side compared to historical earnings, and or if we were to achieve a better rate and closer to the mean by going longer of course we look that as well.

Great, thank you and then on the tanker side, Capital Maritime has been very supportive and I think you have roughly four tanker renewals over the next 12 months that have rate upside based on one year time shorter, are there discussions with Capital Maritime for an early termination or I guess on the way I ask - is there shorter sort of discussion with third parties for those tankers.

We have a total of six product tankers until Suezmax is coming off charter over the next 12 months, I think to answer your question I can point out to what happened with these two vessels that went to Petrobras that were effectively Capital Maritime agreed to redeliver the vessels earlier so that the vessels can commence these attractive charter and you saw seam listing happening with when Capital Maritime effectively terminated its charter earlier 27,000 and let CPLP have the benefit of the new charter would sell effective 750. So until now as you say Capital Maritime has been very supportive and I expect that this similar opportunities are found and it could be, could well be that, that could be the same.

Great, thank you.

Thank you, Ben.

Thank you very much. [Operator Instructions] Now from Seaport Global Securities your next question comes from the line of Sunil Sibal. Your line is now open.

Hi, good afternoon Jerry.

Hi Sunil.

Most of my questions have been actually answered. Just one quick one when you think about the product tanker market especially, with regard to the duration of contract are you seeing any change in terms of the customer mindset there are could we see that market get, a more longer duration contracts then where the market has been typically and if that’s the case, how do you look like that scenario?

That is indeed a good question Sunil we have seen charters coming to the market for fixtures, for longer periods compared to a year or two years ago and that’s mostly I think a result of two things. First of all expectations changing going forward with the spot market being well $10,000 above year-to-date where it was last year a number of charters are trying to take cover for longer. And secondly as a owners very much benefit from the these very same sport market in order to be attracted to give up if you want the more lucrative spot wages they need they require charters that to go longer. So we have seen a number of deals going longer compared to a year or two years ago.

Okay. And then as you look at your re-contracting book over the next year or so is that something direction wise, that you intend to pursue duration wise.

For sure, as discussed that out of the 15 vessels that we have six year-to-date, for two years or longer if you were to rewind in 2012 or 2015 you would say that we were fixing back then for six, 12 months or so were about now that we find this, this longer employment opportunities as well as now that rates have recovered closer to the mean we are taking advantage of that.

Okay, that’s very helpful thanks. One more follow up on the eco-MRs drop downs in terms of the timelines, that you have could you walk us through timelines on those drop since how should may be thinking about if there is an opportunity which comes up of you guys do require a drop down candidate.

Well, the opportunities are there with the right of first refusal on the MRs other is Capital Maritime has or even potentially from the second hand market, but I think the issue is more the financing side especially the equity side so, first of all I think we need to see the our unit price improve and then sort of we can complete accretive deals or secondly at later stage look at alternative sources of financing such acquisitions but there is no specific timeline you got at this point.

Okay, that’s all I had. Thanks.

Thank you, Sunil.

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

Great, hi Jerry good afternoon how you are?

Hi, Shawn I am good, yourself.

Great, great thank you. So my first question is a bit esoteric but given that you operate ships all around the globe I thought I give a try with this. This year the El Niño weather patterns has and is expected to have a particular pronounced impact not so severe, very severe not since 1997. 1998 I was just curious to ask if you or any of your customers had seen any disruptions from this with any tankers or containers ships. Thank you.

Shawn not as far as I know of course in the past similar phenomenon have been very been official to the trade and but especially if it means refinery that is at this tensed to boost the trades, but not to minor as it recently.

Okay, understand that thank you. I just turning to the balance sheet, two of four of your credit facilities are with HSH I think you have recently restructured those to push amortization out from 2016 to 2017, can you just briefly outline your near team debt maturity schedule. Thanks.

Sure, so for 2015 there is a remaining repayment of $1.4 million under one of the HSH facilities. And then we have for 2016, $16 million under the ING facility that is assuming that the ING facility will be drown by January 2016, as we take delivery of the fifth vessel. Now there is the same $15 million we will have to repay in 2017 for the ING facility until the fourth quarter of 2017 when we have another combined so that would be $25 million that’s the fourth quarter of 2017 from the 2 HSH facilities and our coal facility.

Okay, great.

I will be happy to as the details break down if you want over the phone.

No, that I can check it up with you offline. That’s helpful, that’s great that’s all for me thank you for the timing and invite.

Thank you, Shawn.

Thank you very much indeed [Operator Instructions] As there are no further questions sir. I shall pass the flow back to you for closing remarks.

I would like to thank you all for joining us today.

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

Thank you, Jenny. Thank you so much.

All the very best. You have a great weekend.

Have a good day. Bye-bye.

Thank you. Bye-bye.