I mean, it’s still 52% of the current fleet. But the uncommitted ships are only 33%. So — and that’s without taking into account potential removal of all the inefficient vessels like steamships or whatnot. So, I think the long-term period demand is there, the softer commodity price and the seasonal downturn has affected slightly the short-term period the market, but it’s still quite tight. Not to mention, of course, that newbuilding prices have been moving up. We are — in reality, we say that today, you will order a basic spec ship for the second half of 2027 that basic spec ship, if you want to be half respectable in this market means automatically mid to 160s plus, maybe even above that. And then you look at the delivered cost, take into account cost of capital and whatnot, and maybe you are much closer to $300 million together with supervision and pre-deliver installments.
So in order to get a decent return on a $300 million vessel for delivery in 2027, you still need to be very close to 6-digit day rate numbers. So, I think for all these reasons, there might be sort of fluctuations but still a very tight market overall.
Operator: [Operator Instructions] Our next question is from Ben Nolan with Stifel.
Frank Galanti: Hi, Jerry. This is Frank Galanti on for Ben. I wanted to follow up on the discussion around the LNG drop-downs, potential drop-downs. It’s sort of sounding like growth through drop-downs is becoming a priority and sort of correct me if I’m putting words in your mouth. But can you sort of frame in how much capacity you think the Partnership has for drop-downs? And how do you sort of think about balancing that between paying down debt and returning capital to shareholders?
Jerry Kalogiratos: I think it’s — this is exactly the question that we will need to answer over the coming quarters. I pointed out to our cash position and the unencumbered assets. But this is still a quite capital-intensive sport, the LNG industry. So, there is so much that we can do with these tools. So, this is what we’re going to think about, I think, over the coming months. Is it a priority? I think it is very much the same message that — it hasn’t really changed that we have communicated before. So, we have said that over time, we will continue to allocate about a quarter to a fifth of our free cash flow which is going to be returned to our unitholders with distributions and unit buybacks. And I think we are quite close to these levels.
And then the rest, we will continue to focus on growth. Opportunistically, we will repay debt. But we can always repay debt and avoid that incremental cost of capital and then if – you need to relever if there is an accretive opportunity. So I don’t think we are ready to say what we want to do and how much we want to do. But I think the message has not changed. It’s really the same. We will continue to be focused on growing both of fleets, especially in the LNG and container segment with the LNG being quite attractive at this point, and with that the same allocation, so return of capital to unitholders and then also equity going towards growth.
Frank Galanti: Okay. That’s really helpful. Sort of following up — well — yes. Actually, so following up on the leverage question, the euro-denominated bonds coming due in 2026. Obviously, it’s pretty far way away, but it’s a big bullet maturity and sort of given where prices have — or interest rates have gone, it will probably be more expensive to refinance. Is that — how do you think about that specific debt instrument?
