SOME MORE RESHUFFLING
When your chart looks like this you need serious help. Atlas Pipeline Partners (APL) is on the move this morning as it sells its NOWARK gas transmission system to Spectra Energy Partners (SEP). For Spectra its a good deal for unit holders as they get a distribution boost of a penny. The financing of this deal is important.
The Company expects long-term financing for the transaction to be a combination of debt and equity consistent with its current and target capital structure. Pending long- term financing, the Company expects to utilize its existing credit facility and a bridge loan from its sponsor, Spectra Energy Corp.
"This financing approach retains more than sufficient liquidity to fund projects currently in execution into 2010, while maintaining our strong balance sheet and investment- grade credit metrics," added Rizzo.
So its nice to see a deal getting done these days. On the Atlas Pipeline side the money will be used to pay down debt.
Gene Dubay, President and Chief Executive Officer of Atlas Pipeline stated, “With this sale and the previously announced Williams transaction, we will be paying down approximately $400 million of debt. We continue to work on other transactions which should generate additional cash and further de-lever our company. Concurrently, we are focusing on APL’s core strengths which, in our opinion, will make the new, leaner APL a stronger provider of gathering and processing services in the Mid-Continent and in Appalachia, where our new alliance with Williams will allow us to accelerate our Marcellus initiatives.”
Premarket shows Atlas is getting bid up to 5 dollars up 47 cents. No indications on Spectra.
Meanwhile the markets were sharply lower this morning but as news leaked on impending treasury action on insurance companies financials rallied and stock futures have turned nicely higher. Crude is down a bit this morning with a 48 handle. Inventory numbers due out this morning. No other corporate developements this morning at least so far.
Passover begins at sundown tonight and tomorrow is Holy Thursday. Look for the pace of trading to slow as we head into a 3 day Easter Weekend.
joseph cioffi's Source Page - Associated Content
3 comments:
I have downloaded most of the tax packages for my MLPs, but am missing downloads for TPP, LINE and NRGY. Maybe they aren't available online, but I read on one of the yahoo blogs that others were doing it. Anyone have any help on those three?
steve
FWIW:
For those who believe there is a correlation between bond yields and MLP prices, there has been a dramatic reduction in BBB- and dramatically lower yields over the last 4 weeks.
I do a daily screen on Ameritrade for BBB- Bonds, 9% yield (85 price).
The number of bonds offered that fits this screen has dropped dramatically from about 2000 offers to 920 as I type this post.
The real number of bond offers is significantly lower if you remove the real Basket cases like AIG, CIT, and GNW which are priced for bankruptcy.
Perhaps this reflects the risk of Armageddon is diminished, the Fed's action are perceived as working, or that fear based selling has passed. Perhaps it's just self delusion by investors.
In any case if BBB- yields are trending lower, then credit for rolling over debt is becoming more available at more reasonable rates.
HS: I think that is the crux of the MLP argument. If credit improves, as noted by the High Yield Indices, MLP price performance should follow.
The relative value trade of buying the MLP bond versus buying the MLP equity also comes into play.
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