Tortoise today announced that the Board has authorized the reinstatement of distributions and a share repurchase program for certain closed-end funds.
Tortoise Energy Infrastructure Corp. (NYSE: TYG) and Tortoise Midstream Energy Fund, Inc. (NYSE: NTG) declared a quarterly distribution of $0.30 and $0.31, respectively, payable on July 31, 2020 to shareholders of record as of July 24, 2020. The Board has decided to pay these distributions for TYG and NTG in July, and expect to return to the regular fiscal quarter distribution schedule in November.
Additionally, we are implementing a share repurchase program effective through December 31, 2020, for TYG, NTG and Tortoise Pipeline & Energy Fund, Inc. (NYSE: TTP). Under the share repurchase program, TYG, NTG and TTP, intend to purchase in the open market, $25 million, $12.5 million and $5 million, respectively, of their outstanding common shares, if trading at a discount to NAV in excess of 10%.
TYG and NTG are modifying their distribution policies to shift to a NAV-based distribution. Distribution amounts will normally be reviewed annually and are generally expected to fall in the range of 5% to 7% of NAV. For example, TYG’s annualized distribution of $1.20 represents 5.6% of its July 7, 2020, NAV of $21.31.
"The pivot to NAV-based distributions for TYG and NTG aligns with the goal of maximizing NAV, and provides the portfolio management team the flexibility to own investments with the most compelling total return potential across a broader set of energy infrastructure companies," said Brad Adams, CEO of Tortoise’s closed-end funds. "Net cash flow not distributed can be reinvested in portfolio securities, used to fund share repurchases or to redeem leverage. The share repurchases at a discount are in-line with the goal of maximizing NAV, and will be accretive to per share cash flow available for future distributions as well. Furthermore, management and the Board will continue to consider strategic options to enhance stockholder value in the long-term."
The Board also affirmed leverage utilization for TYG, NTG and TTP. Leverage as percent of total assets will vary depending on market conditions, but will normally range between 20% and 30% of total assets.
The Board will monitor the repurchase programs which includes deciding whether or not to renew the repurchase programs at the end of their terms. Repurchase activity, including the number of shares purchased, the average purchase price and the average discount to net asset value, will be disclosed in the funds' quarterly reports to stockholders. The share purchase program will follow Rule 10b-18 requirements, and there is no assurance that the Funds will repurchase shares in any amount.
For more information, a Q&A document is available here.
About Tortoise Energy Infrastructure Corp.
Tortoise Energy Infrastructure Corp. (NYSE: TYG) owns a portfolio of master limited partnership investments in the energy infrastructure sector. Tortoise Energy Infrastructure Corp.’s objective is to provide its stockholders a high level of total return with an emphasis on current distributions.
About Tortoise Midstream Energy Fund, Inc.
Tortoise Midstream Energy Fund, Inc. (NYSE: NTG) owns a portfolio of midstream energy entities that own and operate a network of pipeline and energy-related logistical infrastructure assets with an emphasis on those that transport, gather, process and store natural gas and natural gas liquids (NGLs). Tortoise Midstream Energy Fund, Inc.’s objective is to provide its stockholders a high level of total return with an emphasis on current distributions.
About Tortoise Pipeline & Energy Fund, Inc.
Tortoise Pipeline & Energy Fund, Inc. (NYSE: TTP) is a non-diversified, closed-end management investment company that seeks to obtain a high level of total return with an emphasis on current distributions. TTP invests primarily in equity securities of pipeline companies that transport natural gas, natural gas liquids (NGLs), crude oil and refined products and, to a lesser extent, in other energy infrastructure companies.
Tortoise invests in essential assets – those assets and services that are indispensable to the economy and society. With a steady wins approach and a long-term perspective, Tortoise strives to make a positive impact on clients and communities. For additional information, please visit tortoiseadvisors.com.
Tortoise Capital Advisors, L.L.C. is the Adviser to the funds.
Safe harbor statement
This press release shall not constitute an offer to sell or a solicitation to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer or solicitation or sale would be unlawful prior to registration or qualification under the laws of such state or jurisdiction.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains certain statements that may include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, included herein are "forward-looking statements." Although the funds and Tortoise Capital Advisors believe that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the fund’s reports that are filed with the Securities and Exchange Commission. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required by law, the funds and Tortoise Capital Advisors do not assume a duty to update this forward-looking statement.
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Maggie Zastrow, (913) 981-1020