It appears that for the foreseeable future ETP's increased distribution will be on hold, therefore, prompting a positive move by ETE's management to get something at a good price. RGNC has a good track record of increasing distributions . I think this diversification could mean , and I have to look at RGNC footprint,another move away from pure NG transmission focus and into 2013 when Tiger and Fayetteville are finished. Anyone who follows RGNC better than I have via transcipts view would be appreciated.
NYMARV: It would appear that you are correct--We will be lucky if ETP dist. remain #3.58 annually.--Still this is a pretty good return in todays interest rate enviroment. I agree the focus is probably on financing Tiger & expansion in Haynesville.--However, it is worth noting that the Duncan interests and Kelcy Warren are by far the largest holders of ETE.--Dan Duncan recently died. Fortunately he passed away while the Bush estate tax cuts were in effect BUT then again he always was a pretty smart fellow.---Could it be that ther Duncan interests & Warren feel that ETP distributions will hold but NOT increase while the "smallish" RGNC, while remaining relatively small will register proportionally strong growth & distributions?--The Duncans & Warren are very savvy people.THEY KNOW THE TERRITORY.--It may well pay to hitch on to thier wagon at some point!!!
Addendum::MARV--I also note that the averages, particularly the NYSE Composite,appear tp be "rolling over" with the consequent effect on the whole market. Can't say how far it will go butit instills fear and caution is in order. Personally I have liquidated MLP management stocks because they may be the subject of tax reform leg.---Such action would give some pols cover.
What do you think.
NYMARV--It appears that RGNC is a rather "smallish" pipeline co.by comparison to EPD, Etp and the like. Kelcy Warren is no fool and he is by far the largest holder of ETP & ETE.---Perhaps, because of the size of ETP, he sees relatively slow &/or limited growth in ETP and slow or no dist. growth for ETE. On the other hand, because RGNC is "smallish" he sees an opportunity for relatively large growth w/ the same for distributions of RGNC. Let's keep in mind that Warren's real concern is "WARREN" and NOT the other unit holders. If it is good for Warren it probably is (accidentally) good for ETE & RGNC.
I bot both today.
I'm still trying to figure out who bought what. While ETE ends up with RGNC's GP and shares in RGNC, RGNC ends up with MEP. Meanwhile, ETE gives up $300M in a convertible preferred--how much power does that give GE over ETE?
When all is said and done, no cash seems to have actually changed hands. I think this is more of an alliance than a purchase or sale. I think RGNC is a winner because they now have an interstate pipeline and are closer to investment grade, ETE is about net even but has reduced its current cap-ex requirements, increased its future IDR expectations, and GE has a nice piece of both operations. As a RGNC and EPE shareholder, I guess I'm happy!
seems ete more or less trades ETP units for RGNC units, but then also buys a GP with only about a 2% yield on the $300 million purchase price...pretty steep price for a GP without massively skyrocketing earnings...not clear what makes them think this is a good deal...and leaves ETE junk-rated. Makes EPE look better and better in comparison.