×
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

August 11, 2013

Viewed 879 times

Week Thoughts: Market Takes a Break, MLPs Hold Up

MLPs were flat (counting distributions) in a down market week, which is pretty impressive for the second straight week of $1.0bn+ of MLP equity issued (including two IPOs) while in the tail end of ex-date season.  Oil prices slipped 0.8% and natural gas dropped 3.6% this week, dragging ethane down as well.  Propane closed the week above $1.00/gallon, 15.9% higher than last week, which is a good sign.  YTD, MLPs took back the lead in the total return race with the S&P 500.
Weekly MLP Review_8-9-13
The MLP press release machine was very active this week, with the above-mentioned 2 IPOs, some interesting earnings releases (e.g. LINE, SMLP, GLP) and another fascinating transaction by master tinkerers ETE / ETP.  The busy week was followed by some big time MLP press, including the cover of Barron’s and an investor-focused piece by Jason Zweig in the Wall Street Journal.  I may print the Barron’s piece, put it on my wall and refer back to it, because I don’t know that I’ve seen as many industry-standard answers about general MLP questions in one place before (read it here).   The title (“MLP Boom or Bust”) and the cover (“Navigating the New World of MLPs”) teased a much more interesting article than the actual content of the round-table.  I wouldn’t be saying that if I were one of the people giving the stock answers, of course.  Also, can’t really complain here about a positive general MLP, its much better than a negative upstream MLP article (Barron’s had one of those as well – read here summary of LINE’s earnings).
Barrons Cover
Zwieg’s piece in the WSJ was the more interesting one, with fresh information about the macro MLP fund complex that is a significant driver of fund flows (and returns) of MLPs. Plus, it had practical advice for the average investor looking at the MLP space.
Winners & Losers
Weak earnings were the primary driver of many MLP declines this week.  Second quarter earnings reports have been disappointing for MLPs with NGL exposure.  LINE reported weak results and discussed how their Hogshooter wells didn’t turn out to be as great as initially expected, and management was non-committal on maintaining its distribution in 2014 and wouldn’t speak to the BRY deal, which seems less likely according to most analysts.  XTEX reported a weaker quarter, and delay / slight cost overruns with the Cajun Sibon  expansion project.  But the biggest move came from GLP, down a huge 17.8% this week on weak 2Q results and lowered guidance.  EROC was down 12.3% this week, it seems there was still a line of investors that didn’t get a chance to sell after last week’s earnings.
On the positive side, ETP was up on plans to stop its streak of consecutive flat distributions at 21 quarters with a distribution increase next quarter, the result of a nifty bit of financial engineering that gets ETE closer to being a pure GP and removes 13.5% of ETP’s oustanding units (for which ETP will no longer have to pay a distribution of $44.8mm quarterly).  Until the distribution increase happens, ETP’s streak is the longest active midstream MLP streak (FGP and CQP longer).   New longest active flat distribution streak among midstream MLPs is NKA at 12 quarters and NS at 9.
Another notable winner was QEPM, which debuted on Friday with an opening print that was 10.8% higher than IPO price, but settled Friday afternoon up just 6.0%, still a pretty solid debut relative to WPT (-1.5% Friday).

Top5Bottom5MLPs_8-9_13

Year to date, GLP and AMID dropped out of the top 5 this week, replaced by HCLP and LGP.   No changes in the bottom 5, except that most of them were down week over week.

Top5Bottom5MLPs_8-9_13_YTD

News of the (MLP) World

News-of-the-World

Equity

  • QEP Midstream (QEPM) prices IPO of 20.0mm common units at $21.00/unit (4.76% yield), raising gross proceeds of $420mm
    • Priced at upper end of price range ($21.00), raising $420mm in gross proceeds at 4.76% yield
    • Rose 5.95% in debut
    • GP is public upstream corporation (QEP)
    • QEPM owns midstream assets in Wyoming, Colorado, Utah and North Dakota
  • World Point Terminals (WPT) prices IPO of 8.875mm common units at $20.00/unit (6.00% yield), raising gross proceeds of $175mm
    • Priced at midpoint of the price range, raising $175mm in gross proceeds
    • Dropped 1.5% on its first day of trading
  • DCP Midstream (DPM) prices public offering of 9.0mm common units at $50.04/unit, raising $450.4mm in gross proceeds (press release)
  • ONEOK Partners (OKS) prices public offering of 10.0mm common units at $49.61/unit, raising $496.1mm in gross proceeds (press release)
  • MarkWest Energy (MWE) files S-3 to register up to $1.0bn of common units (filing)
  • Capital Products (CPLP) prices public offering of 11.9mm common units at $9.25/unit, raising $110.1mm in gross proceeds (press release)

Debt

  • Plains All American (PAA) prices $700mm of 3.85% senior notes due 2023 at 99.792% of par
  • Western Gas (WES) prices $250mm of 2.60% senior notes due 2018 at 99.879% of par

M&A / Growth Projects

  • EV Energy (EVEP) announces agreement to divest acreage in Ohio’s Utica Shale for $284.3mm to an undisclosed buyer (press release)
  • Lehigh Gas (LGP) announces acquisition of 17 sites in Tri-Cities, TN region for $21.1mm (press release)
    • LGP will purchase 14 motor fuel stations and assume leases for 3 motor fuel stations in the Tri-Cities region
    • LGP will lease or sublease the 17 sites and supply fuel to Lehigh Gas – Ohio, LLC in a 15 year agreement
    • Close expected Q3 2013
  • Kinder Morgan Energy (KMP) and MarkWest Energy (MWE) announce JV to develop Marcellus / Utica processing complex and NGL pipeline to Gulf Coast (press release)
    • JV will pursue two new projects to support producers in the Utica and Marcellus Shales
    • First project consists of development of a 400 MMcf/d cryogenic processing complex in Tuscarawa County, Ohio, utilizing an existing, 220-acre site that Kinder Morgan has under option
    • Second project consists of development of an initial, 200,000 bpd, C2+ NGL pipeline at the planned JV processing facilities in Ohio that will transport NGLs to Gulf Coast fractionation facilities
    • Will compete with BWP / WMB Bluegrass project
  • Suncoke Energy Partners (SXCP) announces acquisition of Kanawha River Terminals LLC  for $86mm (press release)
    • Kanawha River Terminals LLC, a metallurgical and thermal coal blending/handling terminal service provider with the collective capacity to blend and transload over 30mm tons of coal annually
    • Closing expected Q4 2013
  • Spectra Energy Partners (SEP) announces acquisition of transmission, storage and liquid assets of Spectra Energy Corp (press release)
    • SE will receive 172mm newly issued LP units, 3.5mm GP units and $2.2bn cash, and SEP will assume $2.5bn of acquired asset debt
    • Closing expected Q4 2013
  • Teekay LNG (TGP) announces acquisition of one LNG carrier newbuilding from Awilco LNGA ASA for $205mm (press release)
    • Expected delivery of the vessel, currently under construction, is Q3 2013
    • Closing Expected Q3 2013
  • Constellation Energy (CEP) acquires assets for cash and equity from subsidiary of Sanchez Oil & Gas
    • Sanchez now owns a 17.7% interest in CEP

Other

  • Energy Transfer (ETP) announces buyback and retirement of 13.5% of its units from Energy Transfer Equity (ETE) in exchange for 50% of the G.P. interest and incentive distribution rights of SXL (press release)
    • Allows for restart of distribution growth that has been stalled since 2008

Distribution Announcements

  • Increases: SUSP: $0.4828, +3.5%; LGP: $0.4775, +5.5%
  • Variable: TNH: $4.02
RELATED CONTENT
No posts matching your criteria
MLPguy Post
Week Thoughts: Midstream Flattens Friday Midstream and MLPs looked to be coasting to a third straight week of solid gains, but a sharp selloff across energy stocks Friday erased the gains for the week.
MLPguy Post
Week Thoughts: Midstream Unchained, MLP Eruption MLPs followed up last week’s modest bounce with a huge week in a risk-on surge for equity markets, commodity markets and everything else this week.
MLPguy Post
Week Thoughts: Midstream Asymptomatic as Oil Declines The stock market broke its losing streak, and MLPs and U.S. midstream came along for the ride this week, bouncing slightly after a rough week, month, quarter and year. Weakness in Canadian midstream dragged down the AMNA Index.
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.