DLNG IPO Preview Nov 2013

Dynagas LNG Partners, LP (ticker DLNG) is currently out on its IPO roadshow and looking to raise $250 million by selling 12.5 million common units (before the over-allotment) at a mid-point price of $20 with an indicated mid-point yield of 7.3%. They expect to price the deal Tuesday November 12.

DLNG is a growth-oriented limited partnership focused on owning and operating LNG
carriers. DLNG’s high-specification vessels are employed on multi-year time charters, with international energy companies such as BG Group and Gazprom, providing the benefits of stable cash flows and high utilization rates. DLNG intends to leverage the reputation, expertise, and relationships of its Sponsor and Manager in maintaining cost-efficient operations and providing reliable seaborne transportation services to its customers. In addition, they intend to make further vessel acquisitions from their Sponsor and from third parties. DLNG’s Sponsor entered the LNG sector in 2004 by ordering the construction of three LNG carriers, the Clean Energy, the Ob River, and the Clean Force, from Hyundai Heavy Industries Co. Ltd. or HHI, one of the world’s leading shipbuilders of LNG carriers.

IMPORTANT: DLNG will provide investors with a 1099-DIV (instead of a K-1), which makes it acceptable to buy DLNG in tax advantaged accounts like IRAs. Here is the key language from page 23 of the Prospectus:

Material U.S. Federal Income Tax Considerations

Although we are organized as a partnership, we have elected to be treated as a corporation solely for U.S. federal income tax purposes.

If I decide to purchase any DLNG it will all be held in my IRA. I need to go and find my nautical themed pashmina afghan….

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About Philip Trinder

President of MLP Protocol, investor, trader, and proponent of Master Limited Partnerships.
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