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Crosstex Energy, AŞ Message Board

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  • rrb1981 rrb1981 Aug 21, 2005 5:26 PM Flag

    Dividend Machine Part 1

    The great thing about it is, is that XTEX has super low cost equity capital. I hope we see either a seondary offering or a private placement that allows them to raise about $300 million in equity capital. I figure they could raise $300 million between a secondary offering of around 3 million units and a private placement of around 5 million units, assuming a price of say $40/unit. This would allow them to fund the Barnett Shale project as well as the El Paso project and leave only the Louisiana expansion project unfunded as far as equity capital is concerned. They have a lot of work to fund these projects, but clearly, they know what they are doing. What may end up happening is a series of secondary and private placement offerings that they string out over a year or 18 months. Kind of hard to float that many units on the public of private capital markets. Even with generous placement prices and average lock up restrictions, I doubt that the private guys like Kayne, Fiduciary, Tortoise and Claymore could swallow 5 or 6 million units.