Thank you for standing by, and welcome to the Capital Product Partners' Conference Call, on the First Quarter 2017 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. The statements in today's conference call that are not historical facts, including our expectations regarding developments in the markets, fleet developments, our ability to pursue growth opportunities, our ability to refinance our debt, our expected charter coverage ratio for 2017 and 2018 and expectations or objectives regarding our quarterly distributions and annual 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 for the accuracy and completeness of the forward-looking statements. We make no prediction or statement about the performance of our common units. I would now like to hand over to your speaker today, Mr. Kalogiratos. Please go ahead, sir.

Thank you, Molly, 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 April 28, our Board of Directors declared a cash distribution of $0.08 per common unit. The first quarter common unit cash distribution will be paid on May 12 to unit holders of record on May 5. In addition, our Board of Directors declared the cash distribution of $0.21375 for Class B unit for the first quarter of 2017. The first quarter Class B cash distribution will be paid on May 10 to Class B unit holders of record on May 3. The partnerships net income for the first quarter stood at $12.3 million compared to $12.1 million in the first quarter of 2016. The partnership's operating surplus for the quarter prior to Class B unit distribution amounted to $32.7 million compared to $32.8 million for the first quarter of 2016 and $34 million for the fourth quarter of 2016. Common unit coverage for the first quarter 2017 stood at 1.5 times. During the quarter, we secured new time charter employment for three of our vessels. We fixed the Suezmax Amoureux with our sponsor Capital Maritime for one year, and agreed with Pacific International Lines or PIL earlier in the quarter to extend the time charter of our two 8,000 TEU containers; the Agamemnon and the Archimidis for one year. As a result of these fleet developments, the remaining charter duration of our charters stood at 5.5 years as of the end of the quarter with approximate charter coverage of 85% for 2017 and 50% for 2018. Turning to Slide 3, revenues for the first quarter of 2017 were $60.3 million, an increase of 4% compared to $58…

Thank you. [Operator Instruction] The first question comes from the line of Jon Chappell. Please ask your question.

Thank you. Good afternoon, Jerry.

Hi, Jon.

So, kind of noticeable that the Capital Maritime potential dropdown fleet missing from this presentation maybe you just didn't want to continue to put it in there every single quarter. But can you just give us an update as for the timings as you're thinking about potential dropdowns this year? Is it completely reliant upon getting ships with the right charters? Is it more dependent upon equity capacity market conditions? How you're thinking about that from a 2017 standpoint?

Sure. Thank you, Jon. The only reason that it's not there, it's because we had it last quarter, but we did start as you know in the fourth quarter of 2016. And with a first dropdown, the Amore which was a modern eco MR. She was already in the water and she had the lucrative charter to Cargill and that was in place with the – with an ING facility whose transits can innovated to Capital Product Partners. Now, as you highlighted and as we have discussed in the past, we have accessed to a number of other dropdown opportunities, including an additional five product tankers which trade today in the spot market, but those are two Aframaxes with the long-term charters which have now been delivered to Capital Maritime. Importantly, four of the product tankers and both Aframaxes have great facilities in place which transits kind of innovative to CPLP. Now, given that we have the debt financing in place, and as I said certain of the dropdowns candidates do have long-term charters. We are very much expects that we should be able to conclude additional dropdowns within 2017.

Okay. That's great. Then as far as the next part of that kind of strategic outlook, the refinancing of debt, obviously you probably can't get into too much detail regarding that. But just from a general perspective, would you think that you would has to have a bigger more modern fleet so, kind of a post dropdown type timeframe to do the refinancing? And then a kind of completely different Part B to that question is, we referred a lot about the banks kind of pulling back their exposure to the shipping markets, clearly here would be considered a blue chip client, but have you found the negotiations a bit more difficult as the banks kind of undergo some retrenching I guess from the market?

With regard to the financing, as you recall given the schedule of our debt amortization, it didn't pay off to start discussions very early on, let say, back in 2016. So, as we said, during our last quarterly call, we do think that 2017 is the right year to enter into those discussions. And affectively because it's let say, closer to the – really the debt amortization kicks in, but that's before they really start. And at the same time, we are accumulating cash in advanced of these debt repayments exactly because we have this capital reserve in place. So, it's a 2017 item for sure. We do enjoy a very good relationship with our banks. We have never had any issues not even as per labor over the years. And so, we expect that they – we will have a positive year when it comes to refinancing our debt. That will of course entail a repayment or a prepayment to the tune of the cash that we are accumulating, and I think that if you want that's an important part of the equation as to how much that prepayment will be in order to get this done. But we do think that in the next few months we will be able to communicate more to this effect.

Alright, that's great. Lastly, a quick one, just you mentioned the two ships that have been delivered from their charters and on repositioning voyages right now. Should we expect those to be redeployed in the spot market or on-time charter by the end of this quarter? Is it potential that there could be off higher time that's pretty significant for those two ships in 2Q?

No, for the moment they are trading in the spot market, so there is definitely utilization and earnings. We are just repositioning them and then they should find time charter coverage. So, probably within this quarter, they will be put away on time charter as per standard policy

Okay. Great. Thanks so much Jerry.

Thank you, Jon.

Thank you. The next question comes from the line of Spiro Dounis. Please ask your question.

Good morning Jerry, how are you?

Hi Spiro, I'm well, yourself?

Good. Just want to start of real quick, you made some comments I guess being there just I guess some unknowns around how much prepayment will be and then I guess which assets will get dropped down. But specifically around financing those assets, how are you thinking about that from an ATM standpoint or an equity issuance standpoint. You obviously have a lot of cash in the balance sheet, but to your point some of that might actually got to prepayment?

So, that is definitely a fair question. I think before we know the details of the refinancing that is tenure, the interest cost, the level of debt amortization, it will be difficult to make that call. So, we need to know this and of course the level of prepayment before we decide how we proceed with the refinancing and the future dropdowns. Of course our cash balance sheet remains quite solid at this point, its $142 million, so depending on the terms of refinancing, we'll see what we need in order to get dropdowns affected. So, we need to wait for that.

That's fair. I have a tough one to answer right now. And then just around the distribution increase, I guess maybe I see kind of playing out and we think about – I'm not trying to sequence the event that's going to occur whether its' going to be dropdown first and then the refinancing and vise-versa. But do you see that distribution increase coming in, you know either – after one of those specific events and then maybe what that looks like, you know is it a large step change higher? Do you sort of phase it back in, not thinking about that now?

I think the only thing that we can say at this point is that, as you know the distribution coverage in 2016 was quite high at 1.7 times and that's after the reserve as well as the class redistributions and one-off items, and for this quarter, we also delivered the total coverage of 1.5 times. Now, after we know what the refinancing is and what are the potential drop downs, I think we will be in a better position to decide what will be the future targeted to distribution coverage, and from then on communicate to the market what will be the distribution policy.

Okay. Last one from me.

The only thing that I would ad is that you know with a long-term refinancing in place, there will be less of a need to have such a high coverage that we have today.

Yep. No that'd definitely clear. Okay. Last one, Scorpion made some pretty I guess optimistic comments yesterday just around the product market business also specifically around just the time charter market saying that there is more liquidity coming back into it and it looks like in some of your prepared remarks, you kind of alluded to that as well. I guess how quickly is that improving, and how you see maybe your strategy towards some of these rolling off. You can see a roll off into higher charters, or we are not quite there yet?

The owner comes to us. We have 11 product tankers, four Suezmax tankers and really two containers, to 8000 TEU coming of charter let say within the next 12 to 13 months. At this point and I think mostly year-to-date charters have been taking a wait and see attitude firstly because I think simply in the spot market was very attractive to them. And I think people wanted to see how this will play out. Inventories, OPEC cut and all of that. As a result you have seen a number of oil majors and traders run down their time charter portfolios to definitely below average levels. So, while I don't think that activity, let say product tanker period activity is a huge at this point. The expectations is that we will see more traders and potentially oil majors as well as oil companies coming back to the market. I would – we have some inquires out there, and but I think that if a market sees some stabilization or even better improvement, you could see more people coming in to take vessel from period charters from Q3 onwards. But there is definitely something to it. I think the market if anything is let say below average, so when it comes to liquidity, and there is a reasons for that.

Got it. So, that's encouraging. Thanks for the color, Jerry.

Thank You Spiro.

Thank you the next question comes from the line of John [indiscernible]. Please ask your question.

Hi Jerry, how are you?

Hi John, very well. Yourself?

Good thanks. I just wanted to on the back of Spiro's questions there, you know I've been hearing a lot of bullish commentary in the product market and want to ask one question sort of around arbitrage and in if you think that with inventory movements, you know the timing of when increase arbitrage opportunities will hit? And then also, as supply is coming down, there is still some pressure in 2017 when you think the supply demand curves will cross and we'll actually to see better rates? I know the outlook looks better, but when you think you'll actually see that flow in?

Well, you are right. A big part of why the market has been weak over the last let say 12 months or so has been the fact that the 2015 market borrowed a bit – borrowed strength from the 2016 market, by building this high inventories and now we pay the price for that. There have been some signs of this unwinding, but I think it's still early probably, we will need most of the year of 2017 to see those come down to more reasonable levels. And this, as a result meant that arbitrage opportunities specifically in the very important Atlantic market have been scarce. What I found, I think quite positive is that, in March, we noticed the spike in spot rates which was mainly driven by the gasoline arbitrage opening up in the Atlantic market into the U.S. East Coast, increased West African imports as well as certain delays in Latin America ports, and of course U.S. refineries coming back to the market after maintenance. But what is I think is very positive is that this incremental demand as it came in, drove spot rate upwards quite quickly, and that demonstrated fleet utilization is high enough and despite the recent fleet growth, I think that definitely bodes well for the medium to long run and especially as the new supply of ships will weigh in towards the end of the year. Now with regard to the exact timing, I think it's always very difficult to predict, but I think in a normalized market, where you have a seasonal uptick say towards end of Q3 and the stronger Q4 and that supply, the supply of new ships becomes more limited, you could see potentially a better market. But as I said, this all was very hard to predict when these things happen. But all in all going forward, when you look at the order book at especially for MR tankers at 7% and also very little new ordering activity that we have seen over the last 14 to 15 months, and if you add to this the fact that even if people today decided to go on mass to the CPRs, there is very little capacity to find today at the established shipyards. I think that creates a very good environment going forward for rates to recover. So, because even if today people run to the shipyards and ship finance is definitely not easy or available as it used to be, and there will be a lead of at least in a couple of years before those ships hit the water. So, that gives the market ample time to recover.

Great. Thank you so much for that color. Jerry, that's it from me.

Thank you, John.

Thank you. The next question comes from the line of Ben Brownlow. Please ask your question.

Hi Jerry.

Hi Ben.

Just kind of dovetailing off of your comments on the product tanker outlook, ship moving over to the Suezmax slippage of 50% in the first quarter, can you give some color around kind of what caused that high slippage and you do expect that to continue or do you think that fleet growth will be more second half loaded?

Well, obviously, the current depressed rates, do impact a way that owners things when it comes to taking delivery of vessels. And at the same time, newbuilding prices have been on the decline since these vessels have been ordered and as such there must be a number of interesting discussions going on with ship owners and shipyards which probably delay the delivery of those ships, potentially some consolations as well. And don't forget that also owners because of the fall in asset prices, even if they have finance in places, this means that they will need additional equity. So, all this together with difficulties that shipyards are experiencing is probably creating that slippage. Now it's difficult to say, I mean overall, Suezmax slippage has experienced levels between 30% to 40% over the last few years, but you know the 56% that sound a bit of a high side. But it does very much depend in the end as to how the market will fare and the availability of finance and equity for owners.

Great. That's all I had thank you.

Thank you, Ben.

[Operator Instructions] Your next question comes from the line of Mike Gyure. Please ask your question.

Can you talk a little bit Jerry about the vessel operating expenses? It looks like you did a great job of managing the cost again this quarter. Maybe what you are looking for is trends kind of for the remainder of the year?

The operating expenses were slightly lower this year when compared to the first quarter of 2016 and don't forget that in the first quarter of 2016 we also had of dry docks that affected our bottom-line from that perspective as part of our dry docks is expensed or the largest part of our dry docks is expensed. In this quarter, we did not have any dry docks, and as a result, we have had slighter slightly lower OpEx. Overall, I think that you should expect similar OpEx rates going ahead and but of course there is the earnings evaluation from quarter-to-quarter depending on trade spare and support.

And then maybe a follow-up on the dry dock side of things, any big anticipated dry docks maybe in the second quarter for the rest of the year?

We have no scheduled dry docks for 2017 and we might decide, but that has not been decided yet to bring dry docks forward from the 2018 if the need arises or because of a positioning. But currently there are none for 2017.

Great. Thanks very much.

Thank you.

There are no further questions. Jerry, please continue.

Thank you all for joining today.