CPLP - Capital Product Partners: Pivoting Towards Buybacks Over Distributions After Another Solid Quarter

• Capital Product Partners reduced their distributions by a massive 71% in the middle of 2020 due to the Covid-19 downturn.
• Following a continued strong and surprisingly quick recovery, they are now starting a $30m unit buyback program that equals approximately 17% of their current market capitalization.
• Whilst each investor is entitled to their own views, I feel that special distributions would have been a superior way to return cash to unitholders.
• Thankfully their leverage and liquidity improved during the fourth quarter of 2020 and thus should be sufficient to handle these unit buybacks and their new vessel acquisitions.
• Following these rather mixed developments, I will be maintaining my neutral rating.

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