Shares of Hoegh LNG Partners LP (HMLP) plummeted 60.9% in morning trading, enough to make them the biggest loser listed on major U.S. exchanges, after the company, which engages in undertaking of floating storage and re-gasification units (FSRUs) slashed its quarterly dividend by 98% while it resolves issues related to the refinancing of a credit facility. Hoegh LNG said late Tuesday it will cut is quarterly dividend to 1 cent a share from 44 cents, with the new dividend payable on Aug. 13 to shareholders of record on Aug. 6. The dividend cut lowers the implied dividend yield to 0.57%, at current stock prices, from an implied yield of 9.85% as of Tuesday's closing price. The company said it needs to preserve cash while it resolves issues related to the PGN FSRU Lumpung credit facility: "The ongoing refinancing of the PGN FSRU Lampung credit facility, which had been scheduled to close by the end of the second quarter of 2021, is not yet completed due to the failure by the charterer of the PGN FSRU Lampung to consent to and countersign certain customary documents related to the new credit facility," the company stated. Stifel Nicolaus analyst Benjamin Nola cut his price target to $8 from $15, saying "the risk that kept us up at night had materialized." He said Hoegh was one of the few partnerships still paying out almost all of its cash flows, but there was a big "risk of something going wrong" as it only had five earnings assets. The stock has now shed 51.2% year to date, while the S&P 500 has gained 17.3%.
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