Yeah but who will lend to LINE in the next expansionary cycle after getting burned badly? Fact is these E&P MLPs that fail as miserably as LINE has failed will have to be absorbed; taken out so the bad memories are absorbed by a larger entity that will survive and prosper going forward.
What may be more interesting is whether EPD will look at Targa... they have a lot common asset overlays and EPD could truly dominate the gulf export business combined with Targa and get into Louisiana and all of Targa's fractionators. Targa also has many fractionators in the gulf and that would allow EPD to stop building new ones for awhile.
No, the solution for investors is to own better and best of breed BDCs. Dump FSC, MCC, PSEC... they are NOT better of breed or best of breed. High yields with negative returns on capital translate into total returns so low you cannot justify owning a BDC. Better and best of breed did not cut dividends and they have capital growth for superior total returns. Better to take a lower yield and better total return potential than FSC, MCC, or PSEC.
EPD should buy so they can gather up all those fractionators in the gulf and Louisiana in addition to a lot of assets that EPD can easily do bolt-on to their existing systems. EPD has to get into the game using their currency even though weakened and cash if necessary to acquire something big. MWE was easy to acquire because no GP. I don't expect GEL to be independent that much longer for that reason. An EPD/GEL merger would not be a big surprise either.
PSEC has produced negative TOTAL returns for investors for years. Big dividends failing to keep up with the lost capital.
It may be that a lot of sellers do not want to incur the tax consequences of this transaction not knowing the tax consequences may have been baked in for accrual accounting purposes already. I believe management is fully aware of timetables and the gap they must fill and I believe they will carefully assess the next steps before moving forward.