> I agree that equity issuance by xtxi isn't ideal, but it seems to be about the only choice here due to the nature of the deal.
How about the borrow the principal + 18 months interest from BoFA. After that, the subords become common and their distributions will be covering the interest payments, while we would enjoy the increased dividends.
Of course they could do that (borrow to fund the purchase of xtex units), but it might create some cash flow issues for those 18 months (yes they could borrow for that as well).
I'd be very happy if they decided to fund it with debt rather than equity, but they've been pretty clear that they don't want debt at the gp level. I agree it's frustrating that they're going ahead with issuing very cheap equity (but would most of us be here if it wasn't cheap?). I'm not defending it, just saying I can understand where they're coming from.