Charter party/country risk

Article on Jan 1st 2022 touting the supposed safety of Dynagas LNG Preferred shares (DLNG-A; DNLG-B) with 8.75% and 9% yields.

Author touts all the positives of the preferred shares and the supposed advantages.…

Author forgot to properly assess one/two risks: charter-party & country risk.

Dynagas LNG Partners (DLNG) owns 6 LNG tankers, each with a multi-year charters. Unfortunately, three of the six charters are with Gazprom, and another two, Yamal LNG, in Russia …Ooops!!!

I can relate to this development. About 10 years ago, I owned shares of both Seadrill (SDRLF now; SDRL then) and subsidiary North Atlantic Drilling Limited (NADL). NADL had a significant project with ongoing revenues and a significant backlog for future drilling, with Russian partners. Whoosh! As I recall, it was at least $4B of contracted drilling revenue that disappeared as a result of sanctions applied against Russia. NADL never recovered from that situation. Seadrill wilted away when the offshore drilling sector took a multi-year industry hit. Recovery has been slow, even to this day.

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