This would still be yielding over 8%. That is pretty respectable and I am hoping that scenario is an extreme one. Given the response of the stock lately though you would think it is going to 0. Maybe naive to think it is not going to be cut or only cut about 10-20%. If so I can't why this would be a bad buy at this price level. My real hope is that it is not cut and the reinvestment is done at these low levels. GLTA.
Eagle Rock Announces Second Quarter 2013 Cash Distribution, Earnings Release Date and Amendment to Senior Secured Credit Facility
HOUSTON, July 23, 2013 (GLOBE NEWSWIRE) -- Eagle Rock Energy Partners, L.P.(EROC) ("Eagle Rock" or the "Partnership") today declared a cash distribution for the quarter ended June 30, 2013 of $0.22 per common and eligible restricted unit, equivalent to $0.88 per unit on an annualized basis. This distribution is equal to the distribution paid for the first quarter 2013. The distribution will be paid on Wednesday, August 14, 2013, to unitholders of record as of the close of business on Wednesday, August 7, 2013.
Based on preliminary financial results for the quarter ended June 30, 2013, management expects distribution coverage for the second quarter to be in-line with or slightly improved from first quarter 2013 levels (i.e., substantially below 1.0x) due primarily to the current natural gas liquids pricing environment and lower than expected upstream and midstream volumes through much of the quarter. Management recommended maintaining the $0.22 / unit distribution for the second quarter in part due to its expectation of meaningful volume increases in both operating businesses as soon as the second half of 2013. This expectation is supported by recent higher plant inlet rates in the Texas Panhandle Segment and higher production rates in the Upstream Business. Management will provide further commentary on these developments on the second quarter 2013 earnings conference call.
Eagle Rock also announced today that the Partnership and its lending group amended Eagle Rock's existing senior secured credit facility to allow for a temporary step-up in the Total Leverage Ratio and the Senior Secured Leverage Ratio, as defined in the credit facility, through the third quarter of 2014.
More likely it would still have the same or current yield because the price would drop accordingly and perhaps even more because confidence would have been lost. So you'd have both lower distribution and lower price but still have a high yield. Not the best outcome.
Point taken Liz however the point of my post was merely to show it isn't the end of the world like some of the posters are suggesting. And I would not invest in this type of scenario if I didn't think that scenario would only be short term. By I couldn't agree with you more that this is not an ideal circumstance.
Technically this not good time to buy. Personally I feel this a good price to enter, but if this sell-off is by some one with insider info, this will go a lot lower. The bounces will be temporary and selling will continue.
I can't argue with that however I don't invest in these based on technicals (right or wrong). Long term the lower price is going to be offset by the reinvestment of dividends etc. Frankly part of me likes the low price so when reinvestment occurs I am able to accumulate more shares. That said - it is only a good thing if the long term story here is a good. I think it is.......but I am one person who has been wrong before.