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Dynagas LNG downgraded at Stifel as charter rates trail expectations

Published 12/22/2017, 11:43 AM
© Reuters.  Dynagas LNG downgraded at Stifel as charter rates trail expectations
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  • Dynagas LNG Partners (DLNG -4.7%) drops after Stifel downgrades shares to Hold from Buy with an $11 price target, cut from $17, saying it expects DLNG will cut distributions sometime during 2018.
  • Stifel says DLNG improved cash flow visibility via a new three-year contract extension with Statoil (OL:STL) for LNG carrier Arctic Aurora and a short-term extension on the carrier Clean Energy, but the rates were below expectations and the cash flow gap has widened.
  • Although the firm believes DLNG could have taken and still may take steps to support distributable cash flow, the company has made no meaningful steps to do so in recent years, and the longer the process takes, the more challenging it becomes to maintain distributions or have a reasonable cost of capital.
  • Now read: Should Investors Bail On This 14% Dividend Yield?


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