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Buckeye Partners, L.P. Message Board

  • yournamehere43 yournamehere43 Jan 24, 2013 9:41 AM Flag


    I wonder how this partnership dilution will effect the dividend.

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    • It wont it pars dedt that was taken on to build on and builld new prodjects that bring in more income to partership/with more income might even get a increase the process the mlp get more assest to deperat and it starts over again this is not first time a mlp has done this

    • The pie now gets cut in 6,000,0000 more pieces. What do you think? OK, so they don't have to pay as much interest because they are retiring some debt but if they keep the distribution at the same level they are paying out ~8% in distributions on the amount they they raised in the offering. How much interest were they paying on the debt they are retiring is the question.

    • Can someone explain what is going on here?

      • 3 Replies to joshua_the_kid
      • Stupidity is what it looks like to me

      • Suggest all above take a read at the National Association of Publically traded Partnerships and read their primer called MLP101. It will tell you how a MLP works and that there are only two ways for a MLP to either buy or build new assets. They must either borrow money or issue new units. This is usually done in about a 50/50 mix since no bondholder would buy without equity behind the bonds.

        THERE IS NO DILUTION - This is because the money was used to build an expansion of the BORCO facility, add rail to Albany marine terminal and several others totalling $270M. BPL also bought a terminal in NJ for $260M. These projects show an estimated EBITDA of about $66M according to RBC using 8X on organic projects and 10X on the purchase. The $ on the new units is about $25M and the interest on the debt about $10. Thus there is at least $30M or about an additional .30-.35 per unit to distribute. The EBITDA numbers shown by MS and others show the EBITDA number I used to be a bit low.

        Also FWIW - MLPs do not pay dividends. They pay distributions and there is a VERY big difference. Nobody should buy a MLP w/o knowing the ins and outs of MLPs. The posts above show some of the posters do not or are simply joking around.


      • We have more partners and less of a percentage of the pie. But the company is now making more money. Since they are paying debt we might well see the price of the stock recover in a few weeks. But it is all too soon to tell.

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