Terms

Series

8.50% Series B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units

Liquidation Preference

$25.00

Coupon Rate

8.5%

Rate Type

Fixed To Floating

Annual Dividend

$2.12

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

October 15, 2027

First Call Price

$25.00

Redemption Notice Period

30 days

Capital Stack Ranking

Junior To: All Indebtedness And Other Liabilities, Senior Securities (If Any Created With Required Consent); Pari Passu With: Series A Preferred Units, Any Other Parity Securities; Senior To: Common Units, Junior Securities (Any Equity Securities Not Expressly Senior Or Pari Passu)

Regulatory (Basel III) Call

No

Tax Classification

Other

Qualifies for QDI

No

Qualifies for DRD

No

Shares Offered

6,000,000

Prospectus Summary

Teekay LNG Partners L.P. (NYSE: TGP), a Marshall Islands-based MLP and international LNG/LPG marine transporter, is offering 6,000,000 Series B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units at a liquidation preference of $25.00 per unit. The units pay a fixed rate of 8.50% per annum ($2.125/unit annually, $0.53125 quarterly) through October 14, 2027, after which distributions reset quarterly to three-month LIBOR plus 624.1 basis points; the first optional call date is October 15, 2027 at par. These are cumulative preferred units, meaning any missed distributions accrue and must be paid in full before any distributions can be made to common unitholders. The Series B Preferred Units sit above common units and any junior equity in Teekay LNG Partners' capital structure, ranking pari passu with the existing Series A Preferred Units. However, they are expressly junior to all of the partnership's indebtedness and other liabilities — a significant consideration given the partnership carries approximately $2.5 billion in total debt and capital lease obligations. As a holding-company-level partnership, distributions depend on cash flows from operating subsidiaries and joint ventures. There is no regulatory capital call provision, as this is an MLP rather than a bank issuer; the units are unrated. At a $25.00 purchase price, the current yield is 8.50%, with quarterly payments on January 15, April 15, July 15, and October 15; the record date is the last business day of the preceding month. As a non-U.S. MLP (Marshall Islands LP), distributions are treated as guaranteed payments for use of capital rather than qualified dividends — they do not qualify for the preferential 15%/20% QDI rate or the corporate dividends-received deduction (DRD), and investors should expect ordinary income tax treatment (or potential withholding for non-U.S. holders). If distributions fall six or more quarterly periods in arrears, preferred holders gain the right to elect one director to the general partner's board, but the partnership retains wide latitude over declaration of distributions subject to legally available funds.

Summarized from the SEC prospectus filing.

Distribution History

Floating Rate Terms

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If distributions on the Series B Preferred Units are in arrears for six or more quarterly periods, holders gain voting rights to elect a director; the partnership cannot issue Parity Securities while Series A or Series B distributions are in arrears, and cannot issue Senior Securities without two-thirds holder approval.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 52 (Average)