UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13A-16 OR 15D-16

OF THE SECURITIES EXCHANGE ACT OF 1934

DATED: August 3, 2020

Commission File No. 001-33811

NAVIOS MARITIME PARTNERS L.P.

Q2 2020 false --12-31 0001415921 June 30, 2020

7 Avenue de Grande Bretagne, Office 11B2

Monte Carlo, MC 98000 Monaco

(Address of Principal Executive Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☒                 Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes  ☐                No  ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes  ☐                 No  ☒

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  ☐                 No  ☒

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A

 NAVIOS MARITIME PARTNERS L.P.

FORM 6-K

TABLE OF CONTENTS

This Report on Form 6-K is hereby incorporated by reference into the Navios Maritime Partners L.P. Registration Statement on Form F-3, File No. 333-237934.

Operating and Financial Review and Prospects

The following is a discussion of the financial condition and results of operations for the three and six month periods ended June 30, 2020 and 2019 of Navios Maritime Partners L.P. (referred to herein as “we”, “us”, “Company” or “Navios Partners”). All of the financial statements have been stated in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). You should read this section together with the consolidated financial statements and the accompanying notes included in Navios Partners’ 2019 Annual Report filed on Form 20-F with the U.S. Securities and Exchange Commission (the “SEC”) on April 1, 2020.

This Report contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events including Navios Partners’ 2020 cash flow generation, future contracted revenues, future distributions and its ability to have any distributions going forward, opportunities to reinvest cash accretively in a fleet renewal program or otherwise, potential capital gains, our ability to take advantage of dislocation in the market and Navios Partners’ growth strategy and measures to implement such strategy; including expected vessel acquisitions and entering into further time charters. Words such as “may,” “expects,” “intends,” “plans,” “believes,” “anticipates,” “hopes,” “estimates,” and variations of such words and similar expressions are intended to identify forward-looking statements. Such statements include comments regarding expected revenue and time charters. These forward-looking statements are based on the information available to, and the expectations and assumptions deemed reasonable by Navios Partners at the time these statements were made. Although Navios Partners believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of Navios Partners. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, global and regional economic and political conditions including the impact of the COVID-19 pandemic and efforts throughout the world to contain its spread, including effects on global economic activity, demand for seaborne transportation of the products we ship, the ability and willingness of charterers to fulfill their obligations to us and prevailing charter rates, shipyards performing scrubber installations, drydocking and repairs, changing vessel crews and availability of financing, potential disruption of shipping routes due to accidents, diseases, pandemics, political events, piracy or acts by terrorists, including the impact of the COVID-19 pandemic and the ongoing efforts throughout the world to contain it, the creditworthiness of our charterers and the ability of our contract counterparties to fulfill their obligations to us, tanker industry trends, including charter rates and vessel values and factors affecting vessel supply and demand, the aging of our vessels and resultant increases in operation and dry docking costs, the loss of any customer or charter or vessel, our ability to repay outstanding indebtedness, to obtain additional financing and to obtain replacement charters for our vessels, in each case, at commercially acceptable rates or at all, increases in costs and expenses, including but not limited to: crew wages, insurance, provisions, port expenses, lube oil, bunkers, repairs, maintenance and general and administrative expenses, the expected cost of, and our ability to comply with, governmental regulations and maritime self-regulatory organization standards, as well as standard regulations imposed by our charterers applicable to our business, potential liability from litigation and our vessel operations, including discharge of pollutants, general domestic and international political conditions, competitive factors in the market in which Navios Partners operates; risks associated with operations outside the United States; and other factors listed from time to time in Navios Partners’ filings with the U.S. Securities and Exchange Commission, including its reports on Form 20-F and reports on Form 6-K. Navios Partners expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Navios Partners’ expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. Navios Partners makes no prediction or statement about the performance of its common units.

Recent Developments

Liquidation of Navios Europe II Inc.

On June 29, 2020, the liquidation of Navios Europe II was completed and Navios Partners purchased two Ultra-Handymax and three Panamax dry bulk vessels with a fair value of $56.1 million from Navios Europe II. The purchase was funded through a new financing agreement and cash on hand for total of $36.1 million and the assumption of working capital liability of $2.7 million.

Financing Arrangements

In June 2020, Navios Partners entered into a new credit facility with a commercial bank in the amount of $29.5 million in order to finance the purchase of five drybulk vessels that were acquired upon the liquidation of Navios Europe II. The credit facility has an amortization profile of 6.2 years, matures in June 2021 and bears interest at LIBOR plus 400 bps per annum up to December 2020 and 425 bps per annum subsequently.

In June 2020, Navios Partners entered into a new credit facility with a commercial bank in the amount of $17.0 million for the refinancing of four containerships. The credit facility has an amortization profile of 8.0 years, matures in December 2023 and bears interest at LIBOR plus 350 bps per annum.

Cash Distribution

In July 2020, the Board of Directors of Navios Partners declared a cash distribution for the second quarter of 2020 of $0.05 per unit. The cash distribution is payable on August 13, 2020 to all unitholders of common units and general partner units of record as of August 10, 2020. The declaration and payment of any further dividends remain subject to the discretion of the Board of Directors and will depend on, among other things, Navios Partners’ cash requirements as measured by market opportunities and restrictions under its credit agreements and other debt obligations and such other factors as the Board of Directors may deem advisable.

Overview

Navios Partners is an international owner and operator of dry cargo vessels, formed on August 7, 2007 under the laws of the Republic of the Marshall Islands by Navios Maritime Holdings Inc. (“Navios Holdings”), a global seaborne shipping and logistics company. Navios GP L.L.C., a wholly owned subsidiary of Navios Holdings, was also formed on that date to act as the general partner of Navios Partners. Currently, our general partner is Olympos Maritime Ltd. (the “General Partner”) and holds a 2.1% general partner interest in Navios Partners.

As of July 28, 2020, there were 10,987,679 outstanding common units and 230,524 general partnership units. Navios Holdings currently owns an approximately 18.8% common unit interest in Navios Partners and the General Partner currently owns a 2.1% general partner interest in Navios Partners.

Fleet

Navios Partners’ fleet consists of 23 Panamax vessels, 14 Capesize vessels, six Ultra-Handymax vessels and ten Containerships, including two Panamax bareboat charter-in vessels, that are expected to be delivered by the first half of 2021.

We generate revenues by charging our customers for the use of our vessels to transport their dry cargos. In general, the vessels in our fleet are chartered-out under time charters, which range in length up to twelve years at inception. From time to time, we operate vessels in the spot market until the vessels have been chartered under longer-term charters.

The following table provides summary information about our fleet as of July 30, 2020:

Our Charters

We provide or will provide seaborne shipping services under long-term time charters with customers that we believe are creditworthy. For the six month period ended June 30, 2020, Hyundai Merchant Marine Co., Ltd. (“HMM”) represented approximately 29.0% of total revenues. For the six month period ended June 30, 2019, HMM, Cargill International S.A. (“Cargill”) and Swissmarine Asia Pte. Ltd. (“Swissmarine”) represented approximately 29.9%, 10.8% and 10.3%, respectively, of total revenues. No other customers accounted for 10% or more of total revenues for any of the periods presented.

Our revenues are driven by the number of vessels in the fleet, the number of days during which vessels operate and our charter hire rates, which, in turn, are affected by a number of factors, including:

Time charters are available for varying periods, ranging from a single trip (spot charter) to long-term which may be many years. In general, a long-term time charter assures the vessel owner of a consistent stream of revenue. Operating the vessel in the spot market affords the owner greater spot market opportunity, which may result in high rates when vessels are in high demand or low rates when vessel availability exceeds demand. We intend to operate our vessels in the long-term charter market. Vessel charter rates are affected by world economics, international events, weather conditions, strikes, governmental policies, supply and demand and many other factors that might be beyond our control. Please read “Risk Factors” in our 2019 Annual Report on Form 20-F for a discussion of certain risks inherent in our business.

We could lose a customer or the benefits of a charter if:

Under some of our time charters, either party may terminate the charter contract in the event of war in specified countries or in locations that would significantly disrupt the free trade of the vessel. Some of the time charters covering our vessels require us to return to the charterer, upon the loss of the vessel, all advances paid by the charterer but not earned by us.

Trends and Factors Affecting Our Future Results of Operations

We believe the principal factors that will affect our future results of operations are the economic, regulatory, political and governmental conditions that affect the shipping industry generally and that affect conditions in countries and markets in which our vessels engage in business. Please read “Risk Factors” in our 2019 Annual Report on Form 20-F for a discussion of certain risks inherent in our business.

Impact of COVID-19 on the Company’s Business

The spread of the COVID-19 virus, which has been declared a pandemic by the World Health Organization, in 2020 has caused substantial disruptions in the global economy and the shipping industry, as well as significant volatility in the financial markets, the severity and duration of which remains uncertain.

The impact of the COVID-19 pandemic continues to unfold and may continue to have negative effect on our business, financial performance and the results of our operations, including due to decreased demand for global seaborne dry bulk and container trade and dry bulk and containership charter rates, the extent of which will depend largely on future developments. As a result, many of our estimates and assumptions required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, our estimates may change in future periods.

We have evaluated the impact of current economic situation on the recoverability of the carrying amount of our vessels. As of June 30, 2020, we concluded that events and circumstances triggered the existence of potential impairment of our vessels. These indicators included volatility in the charter market as well as the potential impact the current marketplace may have on our future operations.

As a result, we performed step one of the impairment assessment of our vessels by comparing the undiscounted projected net operating cash flows for each vessel to its carrying value. As of June 30, 2020, our assessment concluded that step two of the impairment analysis was required for three containerships held and used, as the undiscounted projected net operating cash flows did not exceed the carrying value. As a result, the Company recorded an impairment loss of $6.8 million for these vessels, being the difference between the fair value and the vessel’s carrying value together with the carrying value of deferred drydock and special survey costs related to the vessel presented under the caption “Vessels impairment loss” in the condensed Consolidated Statements of Operations (see Note 4 – Vessels, net).

Results of Operations

Overview

The financial condition and the results of operations presented for the three and six month periods ended June 30, 2020 and 2019 of Navios Partners presented and discussed below include the following entities:

The accompanying interim condensed consolidated financial statements of Navios Partners are unaudited, but, in the opinion of management, contain all adjustments necessary to present a fair statement of results, in all material respects, of Navios Partners’ condensed consolidated financial position as of June 30, 2020 and the condensed Consolidated Results of Operations for the three and six month periods ended June 30, 2020 and 2019. The footnotes are condensed as permitted by the requirements for interim financial statements and, accordingly, do not include information and disclosures required under U.S. GAAP for complete financial statements. All such adjustments are deemed to be of a normal, recurring nature. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the consolidated financial statements and related notes included in Navios Partners’ Annual Report on Form 20-F for the year ended December 31, 2019.

Fleet Employment Profile

The following table reflects certain key indicators of Navios Partners’ core fleet performance for the three and six month periods ended June 30, 2020 and 2019.

FINANCIAL HIGHLIGHTS

The following table presents consolidated revenue and expense information for the three and six month periods ended June 30, 2020 and 2019.

Period over Period Comparisons

For the Three Month Period ended June 30, 2020 compared to the Three Month Period ended June 30, 2019 Time charter and voyage revenues: Time charter and voyage revenues for the three month period ended June 30, 2020 decreased by $1.2 million, or 2.5%, to $46.5 million, as compared to $47.7 million for the same period in 2019. The decrease in time charter and voyage revenues was mainly attributable to the decrease in the time charter equivalent rate, or TCE rate, to $11,202 per day for the three month period ended June 30, 2020, from $14,130 per day for the three month period ended June 30, 2019. The available days of the fleet increased to 4,029 days for the three month period ended June 30, 2020, as compared to 3,203 days for the three month period ended June 30, 2019.

Time charter and voyage expenses: Time charter and voyage expenses for the three month period ended June 30, 2020 amounted to $1.9 million, as compared to $2.5 million for the three month period ended June 30, 2019. The decrease was mainly attributable to a: (i) $0.5 million decrease in port expenses related to the freight voyages; and (ii) $0.8 million net decrease in other voyage expenses. The above decrease was partially mitigated by a: (i) $0.5 million bareboat charter-in hire expense; and (ii) $0.2 million increase in bunkers expenses.

Direct vessel expenses: Direct vessel expenses for the three month periods ended June 30, 2020 and 2019 amounted to $2.4 million and $1.5 million, respectively. The increase of $0.9 million was attributable to the increase in amortization of drydock and special survey costs of certain vessels in our fleet.

Vessel operating expenses (management fees): Vessel operating expenses for the three month period ended June 30, 2020, increased by $5.4 million, or 32.9%, to $21.9 million, as compared to $16.5 million for the same period in 2019. The increase was mainly attributable to a: (i) $4.9 million increase in management fees paid to our manager, Navios Shipmanagement Inc. (the “Manager”) due to the increased number of owned and bareboat chartered-in vessels in Navios Partners’ fleet; and (ii) $0.7 million increase in management fees due to the increase in daily rate pursuant to the management agreement (as defined herein). The increase was partially mitigated by a $0.1 million decrease in management fees due to the sale of the Navios Galaxy I in April 2019.

General and administrative expenses: General and administrative expenses increased by $0.5 million to $7.0 million for the three month period ended June 30, 2020, as compared to $6.5 million for the three month period ended June 30, 2019. The increase was mainly due to a $0.7 million increase in administrative fees paid to the Manager due to the increased number of owned and bareboat chartered-in vessels in Navios Partners’ fleet. The above increase was partially mitigated by a $0.2 million net decrease in legal and professional fees, as well as audit fees and other administrative expenses.

Depreciation and amortization: Depreciation and amortization amounted to $13.7 million for the three month period ended June 30, 2020, as compared to $13.2 million for the three month period ended June 30, 2019. The increase of $0.4 million was mainly attributable to a $1.1 million increase in depreciation expense due to the delivery of nine vessels in December 2019. The above increase was partially mitigated by a: (i) $0.1 million decrease in depreciation expense due to the sale of the Navios Galaxy I in April 2019; and (ii) $0.6 million decrease in depreciation expense of one of our vessels as a result of the impairment test performed in the fourth quarter of the fiscal year 2019. Depreciation of vessels is calculated using an estimated useful life of 25 and 30 years for drybulk vessels and containerships, respectively, from the date the vessel was originally delivered from the shipyard. Intangible assets are amortized over the contract periods, which range from one to twelve years, at inception.

Vessels impairment loss: As of June 30, 2020, we concluded that events and circumstances triggered the existence of potential impairment of our vessels. These indicators included volatility in the charter market as well as the potential impact the current marketplace may have on our future operations. As a result, Navios Partners recognized an impairment loss of $6.8 million related to three containerships, as the undiscounted projected net operating cash flows did not exceed the vessels’ carrying value. There was no impairment for the corresponding interim period of the previous year.

Interest expense and finance cost, net: Interest expense and finance cost, net for the three month period ended June 30, 2020 decreased by $6.0 million or 48.8% to $6.3 million, as compared to $12.2 million for the three month period ended June 30, 2019. The decrease was mainly due to: (i) a decrease of the weighted average interest rate for the three month period ended June 30, 2020 to 4.80% from 7.13% for the same period in 2019; (ii) a $1.5 million write-off of the deferred finance fees and debt discount following the $73.5 million prepayments of the Term Loan B Facility in the second quarter of 2019; and (iii) the decrease in Navios Partners’ average loan balance to $471.3 million for the three month period ended June 30, 2020 as compared to $491.9 million for the same period of 2019.

Interest income: Interest income decreased by $1.6 million to $0.2 million for the three month period ended June 30, 2020, as compared to $1.8 million for the three month period ended June 30, 2019.

Other income: Other income for the three month period ended June 30, 2020 amounted to $1.3 million, as compared to $0.4 million for the three month period ended June 30, 2019.

Other expense: Other expense for the three month period ended June 30, 2020 amounted to $2.0 million, as compared to $4.1 million for the three month period ended June 30, 2019.

Equity in net (loss)/ earnings of affiliated companies: Equity in net loss of affiliated companies for the three month period ended June 30, 2020 amounted to $0.7 million as compared to $0.2 million earnings for the three month period ended June 30, 2019. The amounts consisted of the income/ (loss) related to the investment in Navios Maritime Containers L.P. (“Navios Containers”).

Net loss: Net loss for the three month period ended June 30, 2020 amounted to $14.6 million as compared to $6.5 million net loss for the three month period ended June 30, 2019. The increase in net loss of $8.1 million was due to the factors discussed above.

Operating (deficit)/surplus: Navios Partners generated Operating Deficit for the three month period ended June 30, 2020 of $(1.1) million, as compared to operating surplus $6.2 million for the three month period ended June 30, 2019. Operating Surplus is a non-GAAP financial measure used by certain investors to assist in evaluating a partnership’s ability to make quarterly cash distributions (See “Reconciliation of EBITDA and Adjusted EBITDA to Net Cash from Operating Activities, EBITDA, Operating Surplus and Available Cash for Distribution” contained herein).

For the Six Month Period ended June 30, 2020 compared to the Six Month Period ended June 30, 2019

Time charter and voyage revenues: Time charter and voyage revenues for the six month period ended June 30, 2020 decreased by $1.5 million, or 1.6%, to $93.0 million, as compared to $94.6 million for the same period in 2019. The decrease in time charter and voyage revenues was mainly attributable to the decrease in the TCE rate, to $10,957 per day for the six month period ended June 30, 2020, from $13,664 per day for the six month period ended June 30, 2019. The available days of the fleet increased to 8,126 days for the six month period ended June 30, 2020, as compared to 6,480 days for the six month period ended June 30, 2019, mainly due to the increase of the fleet.

Time charter and voyage expenses: Time charter and voyage expenses for the six month period ended June 30, 2020 amounted to $5.0 million, as compared to $6.0 million for the six month period ended June 30, 2019. The decrease was mainly attributable to a: (i) $1.4 million decrease in bunkers expenses; and (ii) $0.6 million decrease in port expenses related to the freight voyages. The above decrease was partially mitigated by a $1.1 million bareboat charter-in hire expense.

Direct vessel expenses: Direct vessel expenses for the six month periods ended June 30, 2020 and 2019 amounted to $4.9 million and $3.1 million, respectively. The increase in direct vessel expenses of $1.8 million was attributable to the increase in amortization of drydock and special survey costs of certain vessels in our fleet.

Vessel operating expenses (management fees): Vessel operating expenses for the six month period ended June 30, 2020, increased by $11.0 million, or 33.3%, to $44.1 million, as compared to $33.1 million for the same period in 2019. The increase was mainly attributable to a: (i) $9.8 million increase in management fees paid to the Manager due to the increased number of owned and bareboat chartered-in vessels in Navios Partners’ fleet; and (ii) $1.5 million increase in management fees due to the increase in daily rate pursuant to the management agreement (as defined herein). The increase was partially mitigated by a $0.5 million decrease in management fees due to the sale of the Navios Galaxy I in April 2019.

General and administrative expenses: General and administrative expenses increased by $0.6 million to $11.1 million for the six month period ended June 30, 2020, as compared to $10.5 million for the six month period ended June 30, 2019. The increase was mainly due to a $1.3 million increase in administrative fees paid to the Manager due to the increased number of owned and bareboat chartered-in vessels in Navios Partners’ fleet. The above increase was partially mitigated by a: (i) $0.2 million net decrease in in compensation to the directors and/ or officers of the Company and equity compensation expense; and (ii) $0.5 million net decrease in legal and professional fees, as well as audit fees and other administrative expenses.

Depreciation and amortization: Depreciation and amortization amounted to $27.3 million for the six month period ended June 30, 2020, as compared to $26.7 million for the six month period ended June 30, 2019. The increase of $0.6 million was mainly attributable to a $2.1 million increase in depreciation expense due to the delivery of nine vessels in December 2019. The above increase was partially mitigated by a: (i) $0.4 million decrease in depreciation expense due to the sale of the Navios Galaxy I in April 2019; and (ii) $1.2 million decrease in depreciation expense of one of our vessels as a result of the impairment test performed in the fourth quarter of the fiscal year 2019. Depreciation of vessels is calculated using an estimated useful life of 25 and 30 years for drybulk vessels and containerships, respectively, from the date the vessel was originally delivered from the shipyard. Intangible assets are amortized over the contract periods, which range from one to twelve years, at inception.

Vessels impairment loss: As of June 30, 2020, Navios Partners recognized an impairment loss of $6.8 million related to three containerships, as the undiscounted projected net operating cash flows did not exceed the vessels’ carrying value. As of March 31, 2019, the Company had a current expectation that, more likely than not, the Navios Galaxy I would be sold before the end of its previously estimated useful life, and as a result performed an impairment test of the specific asset group and recorded an impairment loss of $7.3 million. The vessel was sold on April 23, 2019.

Impairment of receivable in affiliated company: Impairment of receivable in affiliated company for the six month period ended June 30, 2020 amounted to $6.9 million, related to the other-than-temporary impairment recognized in the Navios Partners’ receivable from Navios Europe II. There was no impairment for the corresponding interim period of the previous year.

Interest expense and finance cost, net: Interest expense and finance cost, net for the six month period ended June 30, 2020 decreased by $10.5 million or 44.4% to $13.2 million, as compared to $23.8 million for the six month period ended June 30, 2019. The decrease was mainly due to: (i) a decrease of the weighted average interest rate for the six month period ended June 30, 2020 to 5.04% from 7.29% for the same period in 2019; (ii) a $1.5 million writte-off of the deferred finance fees and debt discount following the $73.5 million prepayments of the Term Loan B Facility in the second quarter of 2019; and (iii) the decrease in Navios Partners’ average loan balance to $477.8 million for the six month period ended June 30, 2020 as compared to $504.7 million for the same period of 2019.

Interest income: Interest income decreased by $3.2 million to $0.4 million for the six month period ended June 30, 2020, as compared to $3.5 million for the six month period ended June 30, 2019.

Other income: Other income for the six month period ended June 30, 2020 amounted to $2.2 million, as compared to $0.6 million for the six month period ended June 30, 2019.

Other expense: Other expense for the six month period ended June 30, 2020 amounted to $2.5 million, as compared to $4.3 million for the six month period ended June 30, 2019.

Equity in net (loss)/ earnings of affiliated companies: Equity in net earnings of affiliated companies for the six month period ended June 30, 2020 amounted to $1.0 million as compared to $0.2 million for the six month period ended June 30, 2019. The amounts consisted of the income related to the investment in Navios Containers.

Net loss: Net loss for the six month period ended June 30, 2020 amounted to $25.4 million as compared to $16.0 million net loss for the six month period ended June 30, 2019. The increase in net loss of $9.3 million was due to the factors discussed above.

Operating (deficit)/surplus: Navios Partners generated Operating Surplus for the six month period ended June 30, 2020 of $3.3 million, as compared to $11.9 million for the six month period ended June 30, 2019. Operating Surplus is a non-GAAP financial measure used by certain investors to assist in evaluating a partnership’s ability to make quarterly cash distributions (See “Reconciliation of EBITDA and Adjusted EBITDA to Net Cash from Operating Activities, EBITDA, Operating Surplus and Available Cash for Distribution” contained herein).

Liquidity and Capital Resources

In addition to distributions on our units, our primary short-term liquidity needs are to fund general working capital requirements, cash reserve requirements including those under our credit facilities and debt service, while our long-term liquidity needs primarily relate to expansion and investment capital expenditures and other maintenance capital expenditures and debt repayment. Expansion capital expenditures are primarily for the purchase or construction of vessels to the extent the expenditures increase the operating capacity of or revenue generated by our fleet, while maintenance capital expenditures primarily consist of drydocking expenditures and expenditures to replace vessels in order to maintain the operating capacity of or revenue generated by our fleet. Investment capital expenditures are those capital expenditures that are neither maintenance capital expenditures nor expansion capital expenditures. We anticipate that our primary sources of funds for our short-term liquidity needs will be cash flows from our equity offerings, operations, proceeds from asset sales, long-term bank borrowings and other debt raisings. As of June 30, 2020, Navios Partners’ current assets totaled $67.6 million, while current liabilities totaled $141.2 million, resulting in a negative working capital position of $73.6 million. Navios Partners’ cash forecast indicates that it will generate sufficient cash to make the required principal and interest payments on its indebtedness, provide for the normal working capital requirements of the business and be in a positive working capital position through twelve months from August 3, 2020. Generally, our long-term sources of funds derive from cash from operations, long-term bank borrowings and other debt or equity financings to fund acquisitions and expansion and investment capital expenditures, including opportunities we may pursue under the Omnibus Agreement. We cannot assure you that we will be able to secure adequate financing or to obtain additional funds on favorable terms, to meet our liquidity needs.

Cash deposits and cash equivalents in excess of amounts covered by government provided insurance are exposed to loss in the event of non-performance by financial institutions. Navios Partners does maintain cash deposits and equivalents in excess of government provided insurance limits. Navios Partners also minimizes exposure to credit risk by dealing with a diversified group of major financial institutions.

Navios Partners may use funds to repurchase its outstanding common units and/or indebtedness from time to time. Repurchases may be made in the open market, or through privately negotiated transactions or otherwise, in compliance with applicable laws, rules and regulations, at prices and on terms Navios Partners deems appropriate and subject to its cash requirements for other purposes, compliance with the covenants under Navios Partners’ credit facilities, and other factors management deems relevant.

In January 2019, the Board of Directors of Navios Partners authorized a common unit repurchase program for up to $50.0 million of the Company’s common units over a two year period. Common unit repurchases will be made from time to time for cash in open market transactions at prevailing market prices or in privately negotiated transactions. The timing and amount of repurchases under the program will be determined by Navios Partners’ management based upon market conditions and other factors. Repurchases may be made pursuant to a program adopted under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. The program does not require any minimum repurchase or any specific number of common units and may be suspended or reinstated at any time in the Company’s discretion and without notice. The Board of Directors will review the program periodically. Repurchases will be subject to restrictions under the Company’s credit facilities. As of August 3, 2020, the Company had repurchased and cancelled 312,952 common units, on a split adjusted basis, at a total cost of approximately $4.5 million.

Long-Term Debt Obligations

Navios Partners’ long-term borrowings are presented under the captions “Long-term financial liabilities, net”, “Long-term debt, net”, “Current portion of financial liabilities, net” and “Current portion of long-term debt, net”. As of June 30, 2020 and December 31, 2019, total borrowings, net of deferred finance fees amounted to $488.2 million and $489.0 million, respectively. The current portion of long-term borrowings, net amounted to $93.5 million at June 30, 2020 and $59.8 million at December 31, 2019.

Credit Facilities

As of June 30, 2020, the Company had secured credit facilities with various banks with a total outstanding balance of $425.9 million. The purpose of the facilities was to finance the construction or acquisition of vessels or refinance existing indebtedness. All of the facilities are denominated in U.S. dollars and bear interest based on LIBOR plus spread ranging from 2.6% to 7.0% per annum. The facilities are repayable in either semi-annual or quarterly installments, followed by balloon payments with maturities, ranging from September 2020 to June 2025. See also the maturity table included below.

On June 26, 2020, the Company entered into a new credit facility with ABN Amro Bank N.V. of up to $32.2 million in order to finance the purchase of the five drybulk vessels acquired from Navios Europe II. The credit facility is repayable in four consecutive quarterly installments of $1.2 million, with a final balloon payment of $24.7 million to be repaid on the last repayment date. The facility matures in the second quarter of 2021 and bears interest at LIBOR plus 400 bps per annum up to December 31, 2020 and 425 bps per annum up to maturity date. As of June 30, 2020, the total outstanding balance was $29.5 million.

On June 25, 2020, the Company entered into a new credit facility with Hellenic Bank Public Company Limited for the refinancing of the existing ABN credit facility, relating to four of the containerships, of up to $17.0 million. The credit facility is repayable in four consecutive quarterly installments of $0.5 million and 10 consecutive quarterly installments of $0.7 million, with a final balloon payment of $8.3 million to be repaid on the last repayment date. The facility matures in the fourth quarter of 2023 and bears interest at LIBOR plus 350 bps per annum. As of June 30, 2020, the total outstanding balance was $17.0 million.

Amounts drawn under the credit facilities are secured by first preferred mortgages on certain Navios Partners’ vessels and other collateral and are guaranteed by the respective vessel-owning subsidiaries. The credit facilities contain a number of restrictive covenants that prohibit or limit Navios Partners from, among other things: incurring or guaranteeing indebtedness; entering into affiliate transactions; charging, pledging or encumbering the vessels; changing the flag, class, management or ownership of Navios Partners’ vessels; changing the commercial and technical management of Navios Partners’ vessels; selling or changing the beneficial ownership or control of Navios Partners’ vessels; not maintaining Navios Holdings’ (or its affiliates) ownership in Navios Partners of at least 15.0%; and subordinating the obligations under the credit facilities to any general and administrative costs relating to the vessels, including the fixed daily fee payable under the management agreement.

The credit facilities require compliance with a number of financial covenants, including: (i) maintain a required security amount ranging over 120% to 140%; (ii) minimum free consolidated liquidity in an amount equal to at least $0.5 million to $0.65 million per owned vessel; (iii) maintain a ratio of EBITDA to interest expense of at least 2.00:1.00; (iv) maintain a ratio of total liabilities or total debt to total assets (as defined in our credit facilities) of less than 0.75; and (v) maintain a minimum net worth to $135.0 million.

It is an event of default under the credit facilities if such covenants are not complied with in accordance with the terms and subject to the prepayments or cure provisions of the facilities.

As of June 30, 2020, Navios Partners was in compliance with the financial covenants and/or the prepayments and/or the cure provisions, as applicable, in each of its credit facilities.

Financial Liabilities

In December 2018, the Company entered into two sale and leaseback agreements of $25.0 million in total, with unrelated third parties for the Navios Fantastiks and the Navios Beaufiks. Navios Partners has a purchase obligation to acquire the vessels at the end of the lease term and under ASC 842-40, the transfer of the vessels was determined to be a failed sale. In accordance with ASC 842-40, the Company did not derecognize the respective vessels from its balance sheet and accounted for the amounts received under the sale and leaseback agreements as a financial liability. Navios Partners is obligated to make 69 and 60 consecutive monthly payments, respectively, of approximately $0.16 million each, commencing as of December 2018. As of June 30, 2020, the outstanding balance under the sale and leaseback agreements of the Navios Fantastiks and the Navios Beaufiks was $21.9 million in total. The agreements mature in the third quarter of 2024 and fourth quarter of 2023, respectively, with a purchase obligation of $6.3 million per vessel on the last repayment date.

On April 5, 2019, the Company entered into a new sale and leaseback agreement of $20.0 million, with unrelated third parties for the Navios Sol, a 2009-built Capesize vessel of 180,274 dwt. Navios Partners has a purchase obligation to acquire the vessel at the end of the lease term and under ASC 842-40, the transfer of the vessel was determined to be a failed sale. On April 11, 2019, the amount of $20.0 million was drawn. Navios Partners is obligated to make 120 consecutive monthly payments of approximately $0.19 million each, commencing as of April 2019. As of June 30, 2020, the outstanding balance under the sale and leaseback agreement of the Navios Sol was $18.6 million. The agreement matures in the second quarter of 2029, with a purchase obligation of $6.3 million on the last repayment date.

On June 7, 2019, the Company entered into a new sale and leaseback agreement of $7.5 million, with unrelated third parties for the Navios Sagittarius, a 2006-built Panamax vessel of 75,756 dwt. Navios Partners has a purchase obligation to acquire the vessel at the end of the lease term and under ASC 842-40, the transfer of the vessel was determined to be a failed sale. On June 28, 2019, the amount of $7.5 million was drawn. Navios Partners is obligated to make 36 consecutive monthly payments of approximately $0.18 million each, commencing as of June 2019. As of June 30, 2020, the outstanding balance under the sale and leaseback agreement of the Navios Sagittarius was $5.6 million. The agreement matures in the second quarter of 2022, with a purchase obligation of $2.0 million on the last repayment date.

On July 2, 2019, the Company entered into a new sale and leaseback agreement of $22.0 million, with unrelated third parties for the Navios Ace, a 2011-built Capesize vessel of 179,016 dwt. Navios Partners has a purchase obligation to acquire the vessel at the end of the lease term and under ASC 842-40, the transfer of the vessel was determined to be a failed sale. The vessel was not derecognized and continues to be depreciated over its useful life and tested for impairment as per the Company’s policy. On July 24, 2019, the amount of $22.0 million was drawn. Navios Partners is obligated to make 132 consecutive monthly payments of approximately $0.2 million each, commencing as of July 2019. As of June 30, 2020, the outstanding balance under the sale and leaseback agreement of the Navios Ace was $20.9 million. The agreement matures in the third quarter of 2030, with a purchase obligation of $6.3 million on the last repayment date.

The maturity table below reflects the principal payments for the next five years and thereafter of all borrowings of Navios Partners outstanding as of June 30, 2020 based on the repayment schedules of the respective credit facilities and financial liabilities (as described above).

The following table presents cash flow information derived from the unaudited condensed Consolidated Statements of Cash Flows of Navios Partners for the six month periods ended June 30, 2020 and 2019.