×
Triangles background
OUR COMPANY AND AFFILIATES
CBRE GLOBAL INVESTORS

CBRE Global Investors, combined with CBRE Clarion Securities and CBRE Caledon, is one of the world’s leading real asset investment managers providing real estate and infrastructure investment solutions to over 500 clients worldwide.

INVESTMENT MANAGEMENT

CBRE Global Investors

CBRE Clarion Securities

CBRE Caledon Capital Management

Trammell Crow Company

MLPguy
CBRE GROUP

CBRE Global Investors is the investment management division of CBRE Group, Inc. the world’s premier commercial real estate services and investment firm.  The company’s shares trade on the New York Stock Exchange under the symbol “CBRE.”

REAL ESTATE SERVICES

CBRE

CBRE Blueprint
Our Company and Affiliates

This website uses cookies to improve the user experience. By using our website you consent in accordance with our Cookie Policy. Read More

ACCEPT
Triangles background
Back to Insights

January 18, 2015

Viewed 1138 times

MLP Week Thoughts: Bottoms...Up

What a week! The Alerian MLP Index dropped like a rock to start the week, closing Tuesday at a fresh 52-week low that was 6.0% lower than last Friday.  On the back of stabilizing oil prices, MLPs traded better the rest of the week, including a 3.3% pop on Friday, to finish the week down just 1.4%.  The Alerian MLP Equal Weight Index (AMZE) declined 3.0%, which highlights how midstream MLPs outperformed, a sign that some risk differentiation might be developing.
Weekly MLP Review_1-16-15
It’s been a risk-off year so far, with the broad market down 2%, interest rate on the 10-year are down to 1.82%, and utilities have picked up where they left off up and are up 3.3%.  Oil was volatile all week, but rallied after hitting a new low Tuesday to finish the week slightly positive (U.S. oil spot price +0.7% week over week), breaking a streak of 6 straight declining weeks.  Oil rallied 6.1% from Tuesday’s close to the end of the week.  Natural gas was volatile as well, but finished up 5.1% for the week.
Winners & Losers
Oil stabilizing didn’t help upstream MLPs much this week.  4 of the bottom 5 were upstream MLPs.  Only one of the top 5 this week was in the Alerian MLP Index (GEL).  FISH popped 14% on the news that its GP was acquired and its growth rate would be accelerated.
Top5Bottom5_1-16-15
Last week, midstream MLPs dominated the bottom five.  Not so this week.
Top5Bottom5_1-16-15_chart
It’s still very early on, but a theme is emerging on the downside so far this year (upstream MLPs still weak). On the upside, the names are spread across subsectors, but they are all smaller, more thinly-traded MLPs.
Top5Bottom5_1-16-15_YTD
 
Top5Bottom5_1-16-15_YTD_chart
News of the (MLP) World
There were encouraging signs for MLPs from the capital markets this week, as two non-investment grade MLPs successfully raised debt capital. Also, there were positive signs that strategic transaction opportunities for MLPs are beginning to emerge from the volatility.  The Azure Midstream acquisition of Marlin Midstream’s GP is a sign of things to come.  Azure was going to go public, but saw the opportunity to avoid the capital markets and get public quicker.  There will be more transactions that would have otherwise been IPOs.  Whether that’s producers shedding assets to MLPs when last year they would have gone IPO, or MLPs buying MLPs.
News-of-the-World
Debt

  • Targa Resources (NGLS) priced $1.1bn of 5.0% senior notes due 2018 at par (press release)
    • NGLS will use the proceeds from the offering to fund tender offers for bonds outstanding at Atlas Pipeline Partners (APL – gathering & processing MLP), in connection with and conditioned upon the proposed merger between NGLS and APL
    • Offering was upsized from $800mm initially offered
    • Positive indication of the ability for other MLPs to access the debt capital markets
  • SunCoke Energy Partners (SXCP) priced $200mm of 7.375% senior notes due 2020 at 102% of par (press release)
    • Proceeds from the offering will be used to partially finance the acquisition of a 75% interest in a cokemaking facility in Illinois owned by its sponsor

M&A / Growth Projects

  • Marlin Midstream (FISH) announced the sale of its general partner and 90% of its incentive distribution rights to private company Azure Midstream Energy, LLC (press release)
    • As part of the transaction, FISH will acquire Azure’s Legacy gathering system in East Texas and northern Louisiana for $162.5mm
    • Azure will retain additional assets to sell down to FISH over time
    • Azure (owned by private equity firm Energy Spectrum) had been planning an MLP IPO of these assets, but this is a short cut
    • The Legacy acquisition and the future drop-down acquisitions combine to raise FISH’s distribution growth profile, and FISH’s stock price reflected that re-rating this week
  • Bloomberg reports that three large MLPs were among the bidders for a large pool of midstream assets owned by Pioneer Natural Resources (Bloomberg)
    • The assets are said to be worth as much as $3bn, and include natural gas and condensate infrastructure in the Eagle Ford Shale in South Texas
    • The MLPs were Williams Partners (WPZ), Enterprise Products Partners (EPD) and Energy Transfer Partners (ETP)
  • Enlink Midstream (ENLK) announced acquisition of oil logistics company for $100mm (press release)
    • ENLK continues to execute its plan to use its investment grade balance sheet and debt capacity to make accretive acquisitions
  • SunCoke Energy (SXCP) announced $245mm drop-down acquisition of interest in a cokemaking facility (press release)
RELATED CONTENT
No posts matching your criteria
MLPguy Post
Week Thoughts: Midstream Canceled Again The S&P 500 closed negative for a 4th straight week, while midstream had its worst week since June in what has been a brutal September so far.
MLPguy Post
Week Thoughts: Midstream Yield High, Interest Low Midstream stocks bounced back early in the week after two rough weeks, but then as the market rolled over later in the week, midstream and MLPs were dragged back down.
MLPguy Post
Week Thoughts: Another Setback Setback for Midstream Midstream struggled again this week, in a risk-off week for stocks and commodity prices.
MLPguy Post
Week Thoughts: Midstream, The Final Season With the market taking a very well-publicized breather this week, midstream followed the market and oil prices lower. MLPs were down each day this week and finished down 4.7%.
MLPguy Post
Week Thoughts: Stocks Up, Midstream Down MLPs staged a comeback effort late in the week (+3.7% Wednesday to Friday), but finished down vs. last week, and well below the S&P 500’s 3.3% gain.
MLPguy Post
Week Thoughts: Midstream Militia Retreats After a few weeks of positive performance, midstream rolled over this week. Energy stocks in general were negative, despite benign commodity price movements and strength among market indexes (which clearly are dominated by tech stocks).
MLPguy Post
Week Thoughts: Blue Flame Special for Midstream Midstream followed up last week’s big week with another strong week of price action. Midstream’s gains were mostly isolated to Monday and Wednesday, but those two days were good enough for a 3% week for the group overall, better than the S&P 500, utilities and infrastructure.
MLPguy Post
Week Thoughts: Midstream Restraint Rewarded Midstream was higher each of the first 4 days this week, before taking a breather Friday, to finish up 5-6% over last week. MLPs were particularly strong, especially gathering & processing stocks....
MLPguy Post
Week Thoughts: Midstream Still Waiting for Its Kodak Moment Midstream underperformed this week, even after counting the juicy dividends that were paid this week. Tech stocks, utilities and other sectors reported strong earnings and saw stock price gains as a result.
MLPguy Post
Week Thoughts: KMI Anthem Over, Play Ball! Midstream performance was mixed this week, with strength in MLPs offset by weakness among large U.S. corporations like WMB and KMI, the latter of which reported less than stellar 2Q results coupled with low energy commentary.
MLPguy Post
Week Thoughts: Positive Pipeline Performance Pre-Earnings Midstream bounced back this week, riding a strong market, stable oil prices and the ramp into distribution season.
MLPguy Post
Week Thoughts: Dakota Access Denied Midstream struggled in an otherwise strong week for the market, hurt by a court decision that rocked the Bakken while not offering much confidence for any midstream company seeking to develop energy infrastructure going forward.
MLPguy Post
Week Thoughts: Market Party, MLPs Stay Home Stocks of all kinds were positive in this pre-holiday week, except for MLPs. Midstream overall lagged the broad market, despite oil and natural gas price gains.
MLPguy Post
Week Thoughts: Midstream Dusted After a solid start to the week, midstream stocks collapsed over the last four days this week, including big declines Tuesday and Friday.
MLPguy Post
Week Thoughts: Midstream Bounce Faded It was an up and down week for midstream, but overall positive vs. last week, helped by a huge day Monday. The Supreme Court ruling in favor of pipeline development across the Appalachian Trail seemed to help midstream stocks broadly on Monday.
MLPguy Post
Week Thoughts: Midstream Paper Jam After an all-time good week across the sector last week, Midstream stocks gave it all back this week. Most of the damage came on Thursday, when the broad equity market dropped 6%.
MLPguy Post
INFRASTRUCTURE: ANOTHER MIDSTREAM EXIT OPPORTUNITY Midstream stocks and MLPs have bounced 100%+ off the latest multi-year low in late March, and they are enjoying a rare respite from fund outflows, despite fundamental challenges. Without the stress of daily extreme volatility and negative stock performance, now is an ideal time to re-evaluate midstream exposure and consider (or re-consider) listed infrastructure.
MLPguy Post
Week Thoughts: Midstream Breaks Out with No Brakes Midstream stocks had an all-time great week of stock performance, with double-digit returns across all three indexes, driven by a double-digit gain in oil prices and another surge in the broad stock market.
MLPguy Post
Week Thoughts: MLPs Lose Week, Win May It was a short week with not much news, so midstream and MLPs followed the broad equity market higher. The melt-up of the broader equity market continued, supported by stimulus and optimism that permeated the markets for most of the week as areas of the country opened back up.
MLPguy Post
Week Thoughts: Midstream Refreshed After Pause After pausing last week, the bounce back for midstream resumed in a big way this week. MLPs and the AMUS put up their biggest week of the year on the back of another big week of oil price gains and strength in the broader stock market.
MLPguy Post
Guest Q and A with ETF Expert on AMLP Guest Q&A with an expert on ETF structuring where we focus discussion on the most popular ETF in the midstream sector, AMLP.
MLPguy Post
Week Thoughts: Midstream Remains Resilient (Recently) The streak is over, midstream stocks traded down for the first time in 7 weeks. But positive sentiment for energy stocks due to higher oil prices helped MLPs (and to a lesser extent broader midstream stocks) outperform utilities and the S&P 500 slightly this week.
MLPguy Post
Week Thoughts: Midstream Stocks Up on Lower Guidance Midstream rallied for a 6th straight week, but this week was different than the prior 5. This week’s rally was led by larger, more integrated players in the U.S. and Canada, not by gathering & processing MLPs. This week was less about bottom fishing or short covering. Broad equity market strength and a 25% oil price gain helped.
MLPguy Post
Week Thoughts: Midstream Gains Again Midstream and MLPs ran their streak of positive weeks to 5, this time trading up with oil prices even as the broader equity market and utilities were negative. Late in the week, the market threw a couple of pails of cold water on the risk-on euphoria, sending midstream and MLPs lower Thursday and Friday.