Northern Tier Energy LP (NTI), a Delaware limited partnership ("Northern Tier Energy"), announced today the declaration of a cash distribution of $1.27 per common unit for the fourth quarter of 2012. The distribution will be paid on February 28, 2013 to holders of record as of February 21, 2013.
Oops, a lot of people have been pounding the table about last quarter's $1.48 being only for 2 quarters. They have egg on their faces, now.
Will be interesting to see whether ALDW and CVRR sell off in sympathy.
I see NTI and ALDW down in AH, but not CVRR yet.
I doubt CVRR will sell off tomorrow, because it already did today and CVRR has a lot more "visibility" on its distribution than NTI. Even know I am a little fuzzy on where the cash came from for NTI's first distribution- Jack Hiller made a decent argument on the pbkef board that the first distribution, based on 2 months of operation, included cash on hand not generated during the 2 months- seems he was right, to some extent. That's why I will be very curious about the operating income etc when NTI reports earnings 3/14- if they are padding the distribution with cash on hand and not just operations during the quarter, could see a selloff- as folks expecting the high yield being talked about realize its unsustainable even with current crack spreads
I think what many people will soon find out that "variable" distribution MLPs that are benefiting from the cyclical top will have to "cut" their distributions when margins compress. Based on the euphoria that I see on many of the boards regarding the refining MLPs..I think it will be a tough pill to swallow for some of them.
I've argued that the proliferation of the MLP space into these sectors probably does more harm than good. Half of the investors don't even know what they own, they see the high yield on a screen and know it is an MLP. Most of these investors do not realize that "variable" means it can also go down.
It will be interesting to see if the distribution was all from operating income/cash flow, or some from their cash hoard. The implied annualized yield from distribution and AH share price of 28.5 is 17.8%
(compares to CVRR's ~15.2% for share price 31.1)
the nice drop after hours in NTI saved my butt on a pairs trade, ended up making a nice 23% profit thanks to that early sell-off in NTI after hours, I give thanks to the person who sold cheap
hard to compare LINE and NTI- models are so different . But IMO there r plenty of reason to believe keystone XL north leg will not get approved (political, economic, environmental) so NTI remains in sweet spot, looking to add on a decent pullback