Thank you for standing by and welcome to the Capital Product Partners' First Quarter 2022 Financial Results Conference Call. We have with us Mr. Jerry Kalogiratos, Chief Executive Officer of the Company. At this time, all participants are a in a listen-only mode. There will be a presentation followed by a question-and-answer session 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 cash generation, equity returns and future debt levels, our ability to pursue growth opportunities, our expectations or objectives regarding future distribution amounts, capital reserve amounts, distribution coverage, future earnings, capital allocation as well as our expectations regarding market fundamentals and the employment of our vessels, including re-delivery dates and charter rates, may be forward-looking statements, as such as defined in Section 21E of the Securities Exchange Act of 1934 as amended. Those 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 those forward-looking statements, whether because of future events, new information, a change in our usual 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 predictions or statements 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, Sandra . Thank you all for joining us today. As a reminder, we'll be referring to the supporting slides available on our website as we go through today's presentation. The partnership's net income for the first quarter of 2022 was $25.1 million, compared with a net income of $10.9 million for the first quarter of 2021. Our Board of Directors has declared a cash distribution of $0.15 per common unit for the first quarter of 2022. The first quarter cash distribution will be paid on May 12 to common unit holders of record on May 06. The partnership's operating surplus for the first quarter was $44.6 million or $13.5 million after the quarterly allocation to the capital reserve. We recommend acquiring units under our unit buyback program on February 14th. For the quarter, we repurchased 89,345 of the partnership's common units at an average cost of $15.67 per unit. As of yesterday and since the inception of our unit buyback program, we have acquired a total of 508,505 units at an average unit price of $12.78. Finally, the partnership started coverage for 2022 and for 2023 stands at 95% and 92% respectively with a remaining total duration corresponding to 4.7 years. Now, turning to Slide Three, revenues for the quarter were $73.4 million compared to $38.1 million during the first quarter of 2021. The increase was primarily attributable to the net increase in the average number of vessels in our fleet by 38% following the acquisition of three Panama containers in February, 2021 and the acquisition of six LNG carriers during the second half of 2021, partly set off by the sale of the two 9,000 TEU container vessels in 2021. Total expense for the quarter were $40.2 million compared to $24.2 million in the first quarter of…

And we will now take our first question. Please go ahead. Your line is open.

William Burke. B Riley. Hey Jerry, how are you?

Hi, Liam. I'm well, how are you?

Good. Thank you. You've got some very attractive dropdown opportunities here, the end of '22 and then early '23. Obviously there's the loan to value that you have in your head. How do you plan on funding the equity portion of it?

That's I think a great question. So the focus right now is really on the four vessels that come first. That is the three 13,000 users we discussed and the LNG carrier, which has time charter in place. So in broad terms, assuming let's say for ease of reference $60 million of EBITDA and multiple of 10 times, that would imply an equity requirement of somewhere between $140 million to $160 million. So I think then we have having this number in mind, and this is not setting stone, but just to have to be able to navigate through this question. I think we will have a number of levers at our disposal. In the first place, I think as demonstrated by this quarter, the free cash flow of the partnership is quite strong and we remain strong as everything is fixed out on charters. Then there is additional liquidity that we can source by refinancing certain of credit facilities that have ample room in view of relatively small debt balance outstanding. And finally, we will continue to look for attractive capital, external capital, be it in the preferred equity or fixed income market like for example, with a Greek bond. Of course markets are much more challenging at this point, but I think we will definitely look as to what we can tap, but just to make this a little more tangible. So if you look at the cash balance as of quarter end, it's around $50 million. Operating surplus after reserve which is -- let's say proxy for free cash flow was $13.5 million. In the reserve, there is a non-cash item, which is the reserve that we make for the bond of about $8.5 million. So if you want the more accurate proxy for free cash, it…

It sounds like you have that surrounded and in terms of asset, just staying with the dropdowns, are you particularly -- do you prefer LNG the container or is it more the charter duration and structure?

I think cash flow is very important to us on visibility, for example, the three 13,000 EU containers with a 10-year charters. They very much fit our business model. On the other hand, we are as you know, quite sensitive to market development and what we perceive to be residual risk at the end of the charter. So would we buy containers and current valuations? Probably not, because they are quite inflated values going around, but buying containers with average or below cycle valuations with a 10-year charter attached, that I think does make sense and we like the cash flow. LNGs obviously we like a lot and I think over the last few months, the world likes also a lot maybe for their wrong reasons because of the unfortunate developments in Ukraine. But we want to be expanding there as well, but always with the same conservative business model that is with taking some charter coverage as we expand So cash flows are important to us but we do have an eye on market risk and residual market risk.

Great. Thank you, Jerry.

Thank you, Liam.

Thank you. And we will now take our next question Please go ahead. Your line is open.

Chris Robertson.

Hey Jerry, how are you?

Good. So I guess just springboarding off of Liam's question. So as it relates to the distribution and ongoing unit repurchases, would it be fair to say that the priority for the free cash at this point is probably related to these growth opportunities on the dropdowns?

I think as we complete more dropdowns and we increase our disable cash flow, you should also expect that we'll continue to increase the capital return to unit holders that is through unit buybacks and quarterly distributions. So I think overall, as you know, as a guidance, and of course that is subject to the final decisions of the board, we intend to return to our unit holders about a fifth a quarter of our free cash flow in the form of quarterly distributions and unit buybacks. So I think that means that we increase our disable cash flow. You should expect also the capital in terms of unit holders to increase incrementally, but also I think this is our way of balancing solid total returns for our long term unit holders and growing our fleet while of course, continuing to ensure long-term viability and cash flow generating capacity for the partnership. So hopefully we can achieve both.

Okay. That's fair. Thanks for that. As it relates to the Cape Agamemnon, when is the next special survey for that vessel? And is it IMO ready for 2023 and beyond, or is there any incremental CapEx that would be required to get it up to speed?

So 2000 -- must be 2025 due for here next special survey. If you -- do you mean in terms of EXI, we'll require an additional CapEx. We anticipate some incremental CapEx, but not something material. I don't necessarily have a number, but it's not going to be anything that will move the needle. Having said that, I think the idea is to hopefully divest from this asset before that. I know that I have said that before. I think so far we are very opportunistic about it. I think so far not having sold the ship has been the right decision, but if we see the market firming up, we want potentially to sell the ship. It's a non-core asset doesn't really fit the bill because of the spot exposure. It's also an older ship and to the extent that we can sell older ships, that of course applies to container vessels. We will we opportunistically try to get there.

Okay. Yeah, that's great color. I guess last question for me relates to the G&A expense for this quarter. It was much lower quarter-over-quarter versus 4Q. Just wondering if there was anything special about that a one-time occurrence, or if we should think about that as a run rate from here?

I think firstly you didn't have transaction expenses which we had in the fourth quarter and that plays a role. We also had a smaller impact in terms of the equity incentive plan, which will pick up into the next quarter. I think a rate closer to what you had in the previous quarter or maybe slightly lower than that is a better proxy including non-Cash items.

Okay. Yeah. Thank you for -- thanks for the time.

Thank you, Chris.

Thank you. And we will now take our next question. Please go ahead. Your line is open.

Hey, Jerry. It's Ben from Steve. Can you hear me?

Hi Ben, how are you?

Good, good. So I wanted to start on interest rates. I'm curious if you could give a little color as to well, I guess the interest cost was a little bit lower, we thought it would be. Could you talk to where your cost of interest is at the moment and going forward, how much you have hedged or how much is fixed?

So I think about a fifth of our debt is fixed in the sense, split between or rather which is the total of the bond plus one of our facilities, a lease back facility that is on a fixed rate. We also, in certain of our facilities, we are able to fix one month LIBOR and potentially I'm not sure if that made a difference compared to your model, if you were assuming three month LIBOR because there has been -- the Delta there has grown for reasons over the last few months. There is not -- there is no other cap or heads at this point, but we are of course mindful of developments on the interest rate front and we will seek to the extent that we can to grow the percentage of our indebtedness going forward on a fixed basis. In terms of the actual all-in cost, happy to give you a call after this to give you a precise number.

Okay, well, do you have a sense as to sort of what the blended average is going forward LIBOR plus whatever?

It should be. So the margin is you mean excluding that, I assume the fixed.

Excluding the fix. Yeah, yeah. Right.

So that would be close, lower than 3%. So closer to 2.7%, 2.8%.

Okay, perfect. And to that end, obviously interest rates have been rising quickly and appear to continue to be headed that direction. Does that change at all how you think about acquisitions? I know you outlined the containerships and obviously the ones that haven't been delivered, you're not going to be buying until they're delivered. So not all of that happens right away, but as the cost of debt and the absolute cost of capital rises do you have to think about the appropriate multiple differently i.e. sub 10% because, the return requirements are greater.

So in the end, all transactions that we would look at, they have to be accretive and to distributable cash flow, as well as EPU and the rise of interest rates and because also we know that typically the cash flow is going forward, the rise of interest rates eats into that accretion. So hitting the right blend of data and equity, I think it is going to be important going forward. We don't disagree. In terms of the multiple, I think this is this dictated by a number of things and we have done transactions on the LNG front around 10 times with charters that are in place that with charter duration of five years plus and I think even in an increased rate interest rate environment if you're at the same time are getting longer cash flows, it would be justifiable to transact around the same multiples but, in the end, the criterion is quite robust. So accretion has to be there and this is what the board would be looking for if we were to acquire more ships.

Okay. That's helpful. And then lastly, we hadn’t seen quite a bit of forward fixing on containerships. The market was really hot and so people were willing to -- minors were willing to transact on vessels, well, in excess of a year of prior to the current charters rolling off. There's been very little activity because there's very little available, but it feels like the market is softening a little bit. I was curious if that is also translated in the ability to forward fix, especially if you have the one vessel that comes off contract next year. Is there -- is it too far out to be able to do something on that and is the windows sort of short or the appetite to do that, that sort of forward fixture shrinking and all these things?

So as always, this is a yes and a no question -- answer. So you have -- you have two things going on and on the one hand you're right, the charter market is in a wait and see mode right now especially for forward fixing. And there has been some softening on rates, but of course still at very high levels. Transactions and fixtures are taking place at historically extremely high level. So there is no doubt about that. What has become less liquid is the forward end. But then you look at the AKADIMOS our 9,000 TEU vessel, this is wide beam ship with 1,650 reefer flags AMP on both sides. So a very good ship, unique ship in a way and very fuel efficient compared to an 8,000 TEU classic post Panamax. It has as much as 30 tons per day savings. So this is a very attractive vessel and we don't know of any similar size vessel opening between now and April, 2023, actually. So, I think we have seen people approach us on the vessel because of its uniqueness. On the other hand, we don't feel that the market is about to cross. There might be a bit less liquidity in the forward cave, but people are still there to do deals. If anything there is a good chance that if whenever China opens up, we will -- we will have a huge draw for cargo to be moved. So we are not going to hurry either. but I would expect that over the next three to four months, we should have a lot more clarity with regard to the AKADIMOS. It should, people are already looking at it. It's a good shape. I think we will find a good charter quite soon.

All right. I appreciate the thorough color as always, Jerry.

Thank you, Ben.

Thank you. There are no further question. I will now pass the floor back to Mr. Kalogiratos for closing remarks.

Thank you all for joining us today.

Thank you. Ladies and gentlemen, that does conclude your conference for today. Thank you all for participating and you may now disconnect.