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Alliance Holdings GP, L.P. Message Board

  • jrad52 jrad52 Feb 18, 2014 9:01 PM Flag

    Value of AHGP's IDRs

    Last summer, the IDRs that AHGP holds from ARLP were being valued in the $ 2.5 billion - $ 2.6 billion area, with a yield around 4.2%. Today, with the IDRs generating more income due to the increases in ARLP's distribution rate, they are being valued significantly lower; I estimate the current value embedded in AHGP's price is only $ 2.3 billion with a yield of 5.2%. Interest rates have increased a bit since last summer so that's probably a part of the drop in value, but I think it's overdone. The IDRs generate $ 4 million/year extra, now versus then. My opinion doesn't mean much, but I think AHGP is the palce to be for now.


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