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Inergy Midstream LLC Message Board

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  • lizahuang54321 lizahuang54321 Dec 20, 2011 3:02 PM Flag

    Good first trade day

    "I don't know what their distribution policy will be and I don't know when they'll reach the high splits."

    In this case, the "high splits" are any amount higher than the initial/minimum quarterly distribution. Any amount (even .0001) more than the initial quarterly distribution immediately qualifies as a 50% IDR level.

    The structure of NRGM is pretty shareholder-unfriendly in that respect. I have argued on the LINE board that IDRs are not as bad as some people make them out to be (especially in the case of new MLPs where the growth is in the future). But this is the exception to the rule...this unusual IDR structure means the pre-IDR high growth phase is eliminated and they go immediately to the high splits.

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