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Golar LNG Partners Limited Partnership Message Board

  • sjsrhs sjsrhs Jul 18, 2013 1:35 PM Flag

    WOW another secondary at 30 a share


    that's what's leaking from head quarters folks.

    Sentiment: Strong Sell

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    • Obviously there is another offering at $3x.xx coming up...though I don't think it's "leaking from head quarters.."...that just sounds like a cold.

      That's the plan...GLNG builds vessels and finds employment for them, sells them to GMLP for more than they cost to build. GMLP finances the purchase with debt and a portion of equity. With GLNG's newbuilds approaching completion, this leak seems more like common knowledge.

      The upside for GMLP holders is increased DCF/share (keep in mind GLNG owns a ton of GMLP units) leading to distribution growth and increased diversity in operating risk (each vessel makes up a lower % of revenue).

      If you aren't prepared for equity offerings to pay for the vessels, maybe look at GLNG? They've pushed the equity portion down to GMLP. I sold a quarter of my GMLP at 34.xx and covered the rest with Nov $35 calls (got a little over a dollar for them). I will look to re-add that quarter on an offering if the acquisition is good and the price drops close to or below $30. Then sell that quarter if we move back towards the mid 30s on distribution increases. It's not a ton of movement, but they're in a sweet spot now with their LT contracts.

      I'm not sure what will happen later in this decade when the initial fleet approaches contract seems that larger size FSRU and more efficient carriers will be the standard then, and current GMLP valution has a pretty optimistic terminal value on those assets. Will trade around the margins until then.

    • Is your BS on every board?

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