Hello, the yield is not real. MEP is now overpaying its distribution big time. MEP had a huge bump in ebitda in 2015 but 2016 projections are looking like they did in 2014. It looks like EEP set the stage to take MEP public at a very opportune moment hoping that dropdowns could paper over what is clearly a lousy portfolio of midstream assets. So the distribution overpayments will translate into a lower price for MEP and I expect EEP to sell to a private buyer or another midstream company that can make it fit into their asset map much better but do not look for a payday from sale.
Try $6-$7 NOT $10. Lawsuits over what Enbridge sold to the public will be coming anyway because when it sure looks like Enbridge played everyone for fools by selling really lousy assets to the public hoping follow on dropdowns would paper over just how bad those midstream assets included in the IPO really were.
It means you are a bag holder and should dump this POS ASAP.
Loss in value of pipeline systems received in dropdown. Enbridge has a lot of explaining to do at some point.... a 2/3 drop in ebitda in a 3 month period? Me thinks there is litigation here for misleading investors as to valuation at time of IPO.
Try again.... except the words "shareholders are SOL" needs to be substituted for your nonsensical statement that there will be any existing shareholders getting anything at all. Creditors best case will own LINE worst case full blown liquidation.
It is hard for investors who demand instant gratification to see out into the future. ETE will own Transco which is the premier pipeline running up the entire eastern area of the US. I would like to see the ETE family simplify by merging into one large entity like KMI. I think in time Kelsey Warren will see the wisdom in terms of lower cost of capital and necessary in order to fund future capex growth at rates that can be justified in terms of specific capex projects.
I know today's investor wants instant gratification from their investments. Two years from now we may be looking at ETE being the most powerful pipeline player in the US. This deal with WMB and getting Transco will be incredible. Keep in mind there are WMB assets that can be sold but must be held for eventual sale at better prices.
So if you cannot take the pain of near term dilution and possible distribution cut then you move on but sometimes great moves like acquiring WMB during the worst of times will pay off big for shareholders who actually remember something called the long term.
Looks like ETE found its path to $2+ billion.... question is will the WMB deal go thru or is this money to pay WMB to go away?
It may be that NYT article talking about how the former CFO tried to rework the WMB deal or trash the deal or negotiate a breakup fee w/o consent of CEO..... maybe
Did U listen to the conference call? AT NO POINT WAS THE WORD "$1.43" STATED! What was said was "100% of dcf" and that would mean $0.55 to $0.88 based on revised dcf for 2016. The 100% dcf commitment for 2015 was 100% covered by definition. The same will be true for 2016 except at lower levels of dcf.
Regardless of all that you say ETE mgmt. handled this matter terribly. The idea of failing to have a back door out makes the members of the mgmt. team responsible for the WMB buyout look like the guys who could not shoot straight and the guys who are not ready for primetime. The best outcome would be if Williams looking to the long term accepts reduced cash and more shares and get rid of that compensatory share thing and just put it all in ETE and not the newly created entity of ETC. I doubt there would be any litigation of substance inasmuch as the destruction of the underlying commodities is responsible for this global mess.
To the plaintiff's bar who would choose to sue go after Saudi Arabia.
No, MEP is being priced based upon just how crummy the base assets were that were part of MEP's IPO. A 2/3 falloff in dcf???? It appears MEP was structured with very poor midstream assets with a plan to cover over these base assets in the IPO with dropdowns but when the oil/NG market collapsed dropdowns could not happen and now the assets have been exposed as having no clothes like the emperor.
Where do you see ONE REFERENCE to ":$1.43"? There was ZERO REFERENCE to a $1.43 during the CC. It is always based upon dcf and 2015 dcf supported the $1.43 distribution AND 5% growth. 2016 will be in the $0.55 to $0.88 range and that will happen under the agreement terms even if EEP must forego its entire IDRs never to be reimbursed.. Listen to the CC.
Hasn't anyone figured out if MEP was going to pay $1.43 for two more years they would have announced it so it could be heard from the highest mountain meaning MEP could price closer to $7 on a discounted cash flow/FMV model.
Do you not understand the distribution is going down to $0.55 to $0.88/share based upon 100% coverage based on DCF? The current year payment of $1.43/share was based on dcf coverage of 100%. Where anyone got the idea MEP would pay 2 years more of $1.43/share is beyond me.
That is why MEP is being re-priced to reflect the new 100% dcf coverage dividend range given with earnings. Any of you who believe they are going to pay $.1.43 for next two years....... IF THAT WERE TRUE IT WOULD HAVE BEEN SO STATED IN THE CONFERENCE CALL and no such statement was made because their guarantee is 100% of dcf which is now between $0.55 and $0.88/SHARE.
There should be litigation here. a 2/3 drop in dcf? When you take into account the cutting of $70M in expenses that means MEP would have made nothing in 2016 without those cuts. MEP appears to be a case where sub-par assets were gathered into a new MLP and EVERYTHING was based on getting dropdowns into MEP ASAP in order to support the $1.43 distribution plus 5% growth. Without the dropdowns humpty dumpty came crashing down.
This is disappointing because underperforming BDCs should simply be sold for their capital to BDCs that can deploy the capital in a less risk adverse manner. FSC can do nothing of the kind because their investor base is high yield junkies who have long ago forgotten the game is supposed to be about total return. FSC investors have negative returns because every step forward (dividend income) is met with greater losses of capital.
The answer may be Anadarko's volumes..... Bid went to $4.52/share in after hours. Me thinks they will reduce distribution to 100% dcf coverage and not maintain present distribution.