MASTER LIMITED PARTNERSHIPS

Friday, October 17, 2008

Up 13 points and climbing here. We may actually close near the highs of the week!

6 comments:

Anonymous said...: good grief, another buying panic in MLPs. I can't take it.; 10/17/2008 1:47 PM
Anonymous said...: Dow and S&P red!

The volatility is sickening.; 10/17/2008 3:24 PM
Anonymous said...: The corporate bond market is in total disarray.

I just bought some:

29273RAE9), ENERGY TRANSFER PARTNERS LP, 6.125%, due , 02/15/2017, Bought 14M @ 73.707 -10,478.57

(805901AQ8), SCANA CORP MED TERM NTS BK EN, 6.25%, due , 02/01/2012, Bought 12M @ 88.395

713291AG7), PEPCO HOLDINGS INC, 6.45%, due , 08/15/2012, Bought 12M @ 85.832 -10,443.89

The ETP + POM bonds yielding 11 % to maturity, the Scana over 10.5% to maturity.

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This is why MLPs are in the toilet, because of the cost of money for new debt.

If ETP bonds are yielding 11% to maturity, with over 1/2 billion in distros to LP units protecting the bond interest payments (LP dstros could be eliminated to pay bond interest if necessary)... we better pray for this credit freeze to thaw... or we're in for something worse than a stiff recession.

HS; 10/17/2008 4:23 PM
Anonymous said...: HS, u lost me on that one, what are distros? TIA.; 10/17/2008 4:45 PM
Anonymous said...: Distros = distributions.

From the point of view of a bond investor, dividends ( common + preferred stock )and distributions ( if MLPs), could be eliminated if necessary before interest payments are at risk for the bondholder.

ETP has (according to yahoo) 151.8 million shares. ETP pays a current distribution of $3.58 a share annually. That comes out to about 543 million in distributions, that are after bondholders in the partnership structure.

HS; 10/17/2008 5:02 PM
Anonymous said...: "LP dstros could be eliminated to pay bond interest if necessary"

It's just very hard to imagine that scenario when it's more likely that ETP's distros will continue to go up.; 10/18/2008 5:48 AM

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