DORIAN LPG LTD. Fair Value Disclosure
21. Financial Instruments and Fair Value Disclosures
Our principal financial assets consist of cash and cash equivalents, investment securities, amounts due from related parties, derivative instruments, and trade accounts receivable. Our principal financial liabilities consist of long-term debt, accounts payable, amounts due to related parties, and accrued liabilities.
| (a) | Concentration of credit risk: Financial instruments, which may subject us to significant concentrations of credit risk, consist principally of amounts due from our charterers, including the receivables from Helios Pool, and cash and cash equivalents. We limit our credit risk with amounts due from our charterers, including those through the Helios Pool, by performing ongoing credit evaluations of our charterers’ financial condition and generally do not require collateral from our charterers. We limit our credit risk with our cash and cash equivalents and restricted cash by placing it with highly-rated financial institutions. |
| (b) | Interest rate risk: Two of our long-term bank loans are based on SOFR and hence we are exposed to movements thereto. We entered into interest rate swap agreements in order to hedge a majority of our variable interest rate exposure related to the 2023 A&R Debt Facility. Three of these swaps expired on March 26, 2025. |
On January 20, 2023, we entered into an interest rate swap agreement with ING in order to manage our variable interest rate exposure risk by effectively converting a portion of our debt from a floating to a fixed rate. The notional value increased as the three other swaps amortized and now decreases with the debt outstanding under the 2023 A&R Debt Facility until final settlement in July 2029. The effect is to maintain a constant ratio between the debt outstanding under the 2023 A&R Debt Facility and the notional hedges. The initial notional value of $3.5 million became effective on June 26, 2023 with a fixed interest rate of 2.8525%. We have no exposure to floating rate movements on any of our other debt financings.
The principal terms of our interest rate swaps are as follows:
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Transaction | Termination | Fixed | Nominal value |
| Nominal value |
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Interest rate swap | Date | Date | interest rate | March 31, 2026 |
| March 31, 2025 |
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2023 A&R Debt Facility - ING(1) | January 2023 | July 2029 |
| 2.8525 | % | $ | 132,000,000 | $ | 148,000,000 | |||||
| (1) | Reduces quarterly with final settlement of $80.0 million in July 2029. |
| (c) | Fair value measurements: Interest rate swaps are stated at fair value, which is determined using a discounted cash flow approach based on market‑based SOFR swap yield rates. SOFR swap rates are observable at commonly quoted intervals for the full terms of the swaps and, therefore, are considered Level 2 items in accordance with the fair value hierarchy. The fair value of the interest rate swap agreements approximates the amount that we would have to pay or receive for the early termination of the agreements. |
Additionally, we have, at times, taken positions in freight forward agreements (“FFAs”) as economic hedges to reduce the risk related to vessels trading in the spot market and to take advantage of fluctuations in market prices. Customary requirements for trading FFAs include the maintenance of initial and variation margins based on expected volatility, open position and mark-to-market of the contracts. FFAs are recorded as assets/liabilities until they are settled. Changes in fair value prior to settlement are recorded in unrealized gain/(loss) on derivatives. Upon settlement, if the contracted charter rate is less than the average of the rates for the specified route and time period, as reported by an identified index, the seller of the FFA is required to pay the buyer the settlement sum, being an amount equal to the difference between the contracted rate and the settlement rate, multiplied by the number of days in the specified period covered by the FFA. Conversely, if the contracted rate is greater than the settlement rate, the buyer is required to pay the seller the settlement sum. Settlement of FFAs are recorded in realized gain/(loss) on derivatives. FFAs are considered Level 2 items in accordance with the fair value hierarchy. We had no outstanding FFAs as of March 31, 2026 and 2025.
The following table summarizes the location on the balance sheet of the financial assets and liabilities that are carried at fair value on a recurring basis, which comprise our financial derivatives all of which are considered Level 2 items in accordance with the fair value hierarchy:
March 31, 2026 | March 31, 2025 |
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Other non-current assets | Long-term liabilities | Other non-current assets | Long-term liabilities |
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Derivatives not designated as hedging instruments | | Derivative instruments | | Derivative instruments | | Derivative instruments | | Derivative instruments |
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Interest rate swap agreements | $ | 2,337,425 | $ | — | $ | 3,497,493 | $ | — | |||||
The effect of derivative instruments within the consolidated statements of operations for the periods presented is as follows:
Year ended | ||||||||||||
Derivatives not designated as hedging instruments | | Location of gain/(loss) recognized |
| March 31, 2026 | | March 31, 2025 | March 31, 2024 |
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Interest rate swaps—change in fair value |
| Unrealized (loss)/gain on derivatives | (1,160,068) | (5,786,717) | 5,665 | |||||||
Forward freight agreements—realized loss | Realized loss on derivatives | — | (512,082) | — | ||||||||
Interest rate swaps—realized gain |
| Realized gain on derivatives | 1,759,508 | 5,824,074 | 7,493,246 | |||||||
Gain/(loss) on derivatives, net | $ | 599,440 | $ | (474,725) | $ | 7,498,911 | ||||||
As of March 31, 2026 and March 31, 2025, no fair value measurements for assets or liabilities under Level 1 or Level 3 were recognized in the consolidated balance sheets with the exception of cash and cash equivalents, restricted cash, and securities. We did not have any assets or liabilities measured at fair value on a non-recurring basis during the years ended March 31, 2026 and 2025.
| (d) | Book values and fair values of financial instruments. In addition to the derivatives that we are required to record at fair value on our balance sheet (see (c) above) we have investment securities that are recorded at fair value and included in other current assets in our balance sheet. We have other financial instruments that are carried at historical cost including trade accounts receivable, equity securities, at cost, amounts due from related parties, cash and cash equivalents, restricted cash, accounts payable, amounts due to related parties and accrued liabilities for which the historical carrying value approximates the fair value due to the short-term nature of these financial instruments. |
The summary of gains and losses on our investment securities included in other gain/(loss), net on our consolidated statements of operations for the periods presented is as follows:
Year ended | ||||||||||
| March 31, 2026 | | March 31, 2025 | March 31, 2024 | ||||||
Unrealized gain/(loss) on investment securities | $ | 1,076,390 | $ | (1,300,287) | $ | 1,483,522 | ||||
Realized gain on investment securities | — | — | 872,557 | |||||||
Net gain/(loss) on investment securities | $ | 1,076,390 | $ | (1,300,287) | $ | 2,356,079 | ||||
We have long-term bank debt related to the 2023 A&R Debt Facility and Areion Facility for which we believe the carrying values approximate their fair values as the loans bear interest at variable interest rates based on SOFR at March 31, 2026 and 2025, which are observable at commonly quoted intervals for the full terms of the loans, and hence are considered as a Level 2 item in accordance with the fair value hierarchy. We have long-term debt related to the Corsair Japanese Financing, Cresques Japanese Financing, Cratis Japanese Financing, Copernicus Japanese Financing, Chaparral Japanese Financing, Cougar Japanese Financing, Caravelle Japanese Financing, and Captain Markos Dual-Fuel Japanese Financing, (collectively, the “Japanese Financings”) that incur interest at a fixed rate. We have long-term debt related to the BALCAP Facility that incurs interest at a fixed rate. The Japanese Financings and BALCAP Facility are considered Level 2 items in accordance with the fair value hierarchy and the fair value of each is based on a discounted cash flow analysis using current observable interest rates. The following table summarizes the carrying value and estimated fair value of our fixed rate debt obligations as of:
March 31, 2026 | March 31, 2025 | |||||||||||||
| Carrying Value | | Fair Value | | Carrying Value | | Fair Value | |||||||
Corsair Japanese Financing | $ | 24,645,833 | $ | 24,354,660 | $ | 27,895,834 | $ | 27,449,194 | ||||||
Cresques Japanese Financing | 22,071,744 | 23,176,904 | 23,840,367 | 25,079,649 | ||||||||||
Cratis Japanese Financing | 33,340,000 | 32,066,599 | 37,420,000 | 35,683,595 | ||||||||||
Copernicus Japanese Financing | 33,340,000 | 32,066,599 | 37,420,000 | 35,683,595 | ||||||||||
Chaparral Japanese Financing | 54,594,492 | 54,386,863 | 57,316,129 | 56,960,711 | ||||||||||
Caravelle Japanese Financing | 35,300,000 | 33,893,259 | 39,200,000 | 37,313,039 | ||||||||||
Cougar Japanese Financing | 36,500,000 | 37,996,095 | 40,100,000 | 41,274,707 | ||||||||||
Captain Markos Dual-Fuel Japanese Financing | 48,230,000 | 51,115,820 | 50,960,000 | 54,060,280 | ||||||||||
BALCAP Facility | 49,891,595 | 49,119,651 | 58,266,112 | 56,498,815 | ||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | May 27, 2026 | Showing above |
| 2025 | May 29, 2025 | |
| 2024 | May 29, 2024 | |
| 2023 | Jun 2, 2023 | |
| 2022 | Jun 2, 2022 | |
| 2021 | Jun 2, 2021 | |
| 2020 | Jun 12, 2020 | |
| 2019 | May 30, 2019 | |
| 2018 | Jun 28, 2018 | |
| 2017 | Jun 14, 2017 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.