U.S. Markets closed

Southcross Energy Rallied on New Equity Commitment Announcement

Kurt Gallon

Midstream and Upstream MLP Gainers and Losers on August 19

Top gainers

Southcross Energy Partners (SXE) was the top gainer among midstream MLPs at the end of trading on Wednesday, August 19. It rose 27.74% in a single trading session yesterday.

Southcross Energy Partners

Southcross Energy Partners rose after an announcement of $175 million in new equity commitment from its private equity sponsors, Charlesbank Capital Partners, EIG Global Energy Partners, and Tailwater Capital. According to the press release, the funds would be used to “to enhance liquidity and support anticipated growth initiatives for Southcross and Holdings.”

Also, “Southcross expects to achieve a coverage ratio of greater than 1.0x on current outstanding common units in the fourth quarter of 2015 and throughout fiscal year 2016, assuming the current quarterly distribution of $0.40 per common unit.”

Delek Logistics Partners

Delek Logistics Partners (DKL) is next on our list of the top midstream MLP gainers. It rose 2.51% yesterday. With yesterday’s gain, Delek Logistics’ YTD (year-to-date) returns improved to 10.46%. Delek Logistics’ solid YTD market performance can be attributed to its strong operating results, impressive distribution coverage, and distribution growth. Delek Logistics was formed by Delek US Holdings (DK) in 2012 to own, operate, acquire, and construct crude oil and refined products logistics and marketing assets.

Other gainers

The remaining two MLPs on the list of the top five midstream MLP gainers on August 19 are MPLX LP (MPLX), MarkWest Energy Partners (MWE), and Enable Midstream Partners (ENBL). They rose 2.33%, 1.78%, and 1.08%, respectively.

MPLX moves in tandem with MarkWest Energy Partners since their merger announcement. Traders take advantage of any discrepancy in the swap ratio dictated prices. For an in-depth analysis of the MarkWest Energy-MPLX merger, read Key for Investors: Analyzing the MarkWest-MPLX Merger.

The Alerian MLP ETF (AMLP) and the UBS ETRACS Alerian MLP ETN (AMU) fell 1.16% and 1.71% yesterday, respectively. MarkWest Energy accounts for ~8.34% of AMLP. For context, the upstream energy company heavy SPDR S&P Oil & Gas Exploration & Production ETF (XOP) fell 3.75% on the same day.

Continue to Next Part

Browse this series on Market Realist: