Terms

Series

9.00% Series A Cumulative Redeemable Preferred Units

Liquidation Preference

$25.00

Coupon Rate

9%

Rate Type

Fixed

Annual Dividend

$2.25

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

August 12, 2020

First Call Price

$25.00

Redemption Notice Period

30 days

Capital Stack Ranking

Junior To: All Indebtedness And Other Liabilities, Any Senior Securities; Pari Passu With: Any Future Parity Securities; Senior To: Common Units, Junior Limited Partner Interests

Regulatory (Basel III) Call

No

Tax Classification

Qualified Dividend

Qualifies for QDI

Yes

Qualifies for DRD

No

Shares Offered

3,000,000

Prospectus Summary

Dynagas LNG Partners LP, a Marshall Islands limited partnership focused on owning and operating LNG carriers, is offering 3,000,000 Series A Cumulative Redeemable Preferred Units at a fixed rate of 9.00% per annum on a $25.00 liquidation preference, equating to $2.25 per unit annually ($0.5625 per quarter), payable on February 12, May 12, August 12, and November 12 each year, commencing November 12, 2015. The units become optionally redeemable at $25.00 plus accrued distributions on or after August 12, 2020, and are perpetual with no mandatory redemption date. These are cumulative preferred units, meaning any unpaid distributions accumulate and must be paid in full before any distributions can be made to common unitholders. The Series A Preferred Units sit senior to Dynagas LNG Partners' common units and any other junior equity interests, but rank junior to all of the partnership's existing and future indebtedness and liabilities, which totaled approximately $570 million as of March 31, 2015. As a holding company structure, cash flows depend entirely on distributions from operating subsidiaries, introducing structural subordination risk. There is no regulatory capital call provision, as this is a non-bank MLP issuer. In a liquidation, preferred unitholders receive $25.00 plus accrued distributions before any recovery by common unitholders, but only after all debt claims are satisfied. At par, the effective yield is 9.00% annually. The partnership has elected to be taxed as a corporation for U.S. federal income tax purposes, and distributions are expected to qualify as 'qualified dividend income' (QDI) taxable at preferential 15%/20% capital gains rates for eligible individual U.S. holders who meet holding period requirements; corporate holders may be eligible for the dividends received deduction. If six or more quarterly distributions are in arrears (whether consecutive or not), preferred unitholders gain the right to elect one director to the Board — this is the primary protective mechanism should distributions be interrupted, though the cumulative feature ensures all missed payments accrue and must be paid before any resumption of common distributions.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If distributions on the Series A Preferred Units are in arrears for six or more quarterly periods, holders gain the right to elect a director; the prospectus does not contain an explicit prohibition on paying common distributions while preferred distributions are in arrears, but the cumulative nature and ranking senior to common units implies common distributions would be restricted.

Other Preferreds from Dynagas LNG Partners LP

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 43 (Average)