Speaking of Yield – Teekay LNG’s Investors Pick Up Some MoreSpeaking of Yield – Teekay LNG’s Investors Pick Up Some More

Teekay LNG Partners announced today that it had reached an agreement to acquire a 50% interest in two LNG carriers owned by Exmar for an equity purchase price of approximately $70 million, which includes approximately $7 million of working capital and other cash assets plus the assumption of $100 million in pro rata debt secured by the vessels. Exmar will retain its original 50% and continue to manage and operate the vessels. The consideration for the transaction will consist of $35 million in cash, which will be financed by drawing down on one of the partnership’s existing revolvers and the issuance of approximately 1,050,000 partnership units to Exmar ($34.5 million based upon yesterday’s closing price of $32.87).

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Teekay LNG goes to the Shelf

Having filed its F-3 shelf registration on October 20th (effective on the 29th), Teekay LNG Partners wasted no time and announced on Monday the offering of 3.5 million common units with a green shoe of a further 525,000 shares. On Tuesday the company announced that the shares were priced at $24.40, which is a discount of about 5% to Monday’s close at $25.67 just before the announcement.
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Deleveraging

Teekay LNG Partners announced on Tuesday that it plans to offer 4 million common units in a public offering led by Citi, Morgan Stanley and UBS Investment Bank. Underwriters will be granted the option for another 600 thousand shares to cover over-allotments. Interestingly the proceeds of the offering are not to be used to cover capex but instead to repay amounts outstanding under one of its revolvers, which amounts may subsequently be re-borrowed. The shares were priced yesterday at $17.60, a premium of $0.10 over Tuesday’s closing price. Gross proceeds, including the over-allotment, will approximate $81 million.

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