×
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

July 13, 2013

Viewed 538 times

Week Thoughts: MLPs Buoyant in Rising Tide

After sinking last week, MLPs (and upstream MLPs in particular) bobbed back this week, up 2.9%.  Stocks were euphoric again (S&P 500 up 3.0%), hitting fresh all-time highs Thursday and Friday, which helped MLPs.  Interest rates were down slightly, and gold bounced back.  Oil hit another 52-week high Wednesday before settling up 2.8% for the week, natural gas was slightly higher and propane was up again in sympathy with oil.

Weekly MLP Review_7-12-13

Not much to report this week.  We started distribution season with the usual suspects raising distributions (EPD, GEL, PAA) at healthy clips.  We had two equity deals this week, another MLP IPO filing and just one M&A deal.  I’m hearing that an IPO will launch early this week, probably Phillips 66 Partners.  Below is the list of pending MLP IPOs, with those that haven’t filed in a year removed.  I believe its just a weird coincidence that we have 2 filed MLPs with OCI in their name, not a ton of thought from a marketing standpoint from either of them, unlike the Marlin Midstream guys with their catchy ticker.
Pending MLP IPOs_7-12
On the M&A front, the combination of rising rates and high multiples paid for recent midstream deals points towards more active M&A in the next few months.  From all accounts, there are many assets out there for sale.  Rates rising generally lowers what MLPs can pay for assets, given that their cost of debt will be higher.  So, we may see M&A pick up going forward.
Winners & Losers
Upstream MLPs clawed back some of their losses from the fireworks show last week.  All 5 of the top 5 this week were upstream MLPs, and all upstream MLPs were positive for the week, although LINE became increasingly volatile late in the week, apparently on more negative articles (which LINE probably can’t really respond to while the inquiry is underway and just before earnings).  NGL and APU were both in the bottom five owing to their equity offerings, although APU sold no primary units in the secondary offering by ETP.  TLLP continues to bounce around, but was down this week.

Top5Bottom5MLPs_7-12_13

Upstream MLPs lead the losers (not counting OXF, which continues to maintain the bottom spot).  EVEP made a big move that jumped it from 2nd worst performing MLP year to date to 3rd worst.  On the positive side, EXLP bumped HCLP out of the top five.  There are now 36 MLPs with 30%+ returns YTD, 18 MLPs with 40%+ returns, 13 with 50%+ returns.  Not much else to report on the chart below, all systems go for most MLPs.

Top5Bottom5MLPs_7-12_13_YTD

News of the (MLP) World

News-of-the-World

EQUITY

  • Energy Transfer (ETP) prices upsized secondary offering of 7.5mm (up from 6.0mm) AmeriGas (APU) common units at $47.60/unit, raising $357mm in gross proceeds to the selling unitholder (ETP)
    • Priced at $47.60/unit, raising $357mm in gross proceeds to ETP
    • Overnight marketing offering, priced at 4.4% discount to prior close
  • NGL Energy (NGL) prices 9.0mm unit offering at $29.00/unit, raising $261.0mm in equity proceeds ($300.2mm with overallotment option)
    • 9.0mm unit offering raises $261.0mm, 1.35mm units sold in overallotment raises total gross proceeds to $300.2mm
    • One day marketing period, 7.7% file-to-price decline, traded up 2.1% in the session following pricing
  • OCI Resources LP (OCIR) files initial registration statement MLP IPO to raise up to $115mm (SEC Filing)
    • OCIR owns a 51% stake in OCI Wyoming, which is one of the largest producers of soda ash in the world, with the other 49% owned by Natural Resource Partners (NRP)
    • OCI Wyoming had proved and probable reserves of approximately 267.1mm short tons of trona ore, which is equivalent to 145.5mm short tons of soda ash
    • MLP will have incentive distribution rights up to 48%, 50% including 2% G.P.
  • PVR Partners (PVR) files S-3 to sell up to $150mm of equity at-the-market (SEC Filing)

M&A / GROWTH PROJECTS

  • KNOT Offshore (KNOP) announces $145.0mm acquisition of Knutsen Shuttle Tankers 13 AS, which owns shuttle tanker Carmen Knutsen
    • KNOP to acquire Knutsen Shuttle Tankers 13 AS, which owns shuttle tanker Carmen Knutsen
    • Acquired from Knutsen NYK Offshore (KNOT), purchase price of $145mm, less $89.1mm of existing bank debt
    • Purchase price to be funded with cash payment of $45.4mm, with seller financing from via a $10.5mm loan from KNOT
    • Carmen Knutsen is a 157,000 deadweight ton shuttle tanker delivered to KNOT in January 2013, operated under 5 year contract with Repsol

OTHER

  • USA Compression (USAC) announces Bill Manias (most recently CFO of Crestwood Midstream) as new COO, replacing resigning Kevin Bourbonnais
  • Direxion files for MLP ETF
  • Distribution Announcements
    • GEL: $0.51, +2.5% quarter over quarter
    • PAA: $0.5875, +2.2%
    • EPD: $0.68, +1.5%
    • Flat quarter over quarter: PNG ($0.3575), TGP $0.675, TOO ($0.5253)
    • Variable: DMLP ($0.395583)
RELATED CONTENT
No posts matching your criteria
MLPguy Post
Week Thoughts: Mariner Makes Midstream Mixed Midstream stocks were mixed across categories, with Canadian midstream outperformance offset by MLP weakness, but overall finished positive for the week, helped by broad market strength and income stock strength.
MLPguy Post
Week Thoughts: Midstream Captures More Downside The slow bleed in midstream continued this week. MLPs again lagged broader the Midstream Index (AMNA), because of Canadian midstream and a few large U.S. corporations. Higher commodity prices and strong broader equity market trading weren’t enough to get midstream moving higher...
MLPguy Post
Week Thoughts: Midstream Earnings Hit, Stocks Miss Midstream and MLPs were slight underperformers among energy stocks (XOP and XLE were largely flat) and underperformed general equities (as measured by S&P 500), which rallied 1.5%. Earnings, ex-dates for distributions and month-end strangeness whipped things around a bit in between a basically flat week.
MLPguy Post
Week Thoughts: MLPs Less Travelled Midstream basically kept pace with the broader market this week, while MLPs underperformed, again. Oil prices and broader equities were supportive, but that wasn’t enough to get MLPs moving ahead of EPD results Monday to kick off the meat of 3Q reporting season.
MLPguy Post
Week Thoughts: Midstream Inaction Quiet week in the stock market this week, which translated into a quiet week for midstream as well. The AMNA finished basically unchanged, while the MLP Index was slightly lower.
MLPguy Post
Week Thoughts: MLPs Brace for Earnings Midstream was negative across the board this week, and the MLP Index lost more ground to the other midstream indexes that include corporations. Lower oil prices, higher interest rates and general aversion to energy stocks were likely reasons for continued weakness for the sector.
MLPguy Post
Week Thoughts: Macro Noise Offsets MLP News After 5 straight negative days last week, midstream had three positive days this week, including an intra-day reversal Thursday and a positive Friday.
MLPguy Post
Status Update: Midstream Green in September Given the end of the month and quarter fell on a Monday, I wanted to get a quick post out with updated month and quarter end numbers. I hope you’ll understand if the upcoming weekly post is a bit shorter as a result.
MLPguy Post
Week Thoughts: MLPs Selloff On Purpose Risk was definitively off this week across energy stocks, commodities and the broader stock market. Naturally, utilities and REITs caught a bid, and midstream did not. Within midstream, Canada held up well and helped AMNA outperform the AMZ and AMUS.
MLPguy Post
Week Thoughts: Midstream Stocks Sustain September Surge Midstream stocks traded up amid a strong backdrop for energy stocks and for income stocks...
MLPguy Post
Week Thoughts: Scarcity Value Rally in MLPs Midstream stocks outpaced the S&P 500 and utilities this week in the face of falling oil prices and rising interest rates. MLPs were the best performers within midstream, benefitting from the “value rally”...
MLPguy Post
Week Thoughts: Market Advances, Midstream Unmoved It was a short, but steady week for midstream, helped by strong Canadian midstream performance that more than offset weakness from MLPs. Midstream stocks underperformed utilities and the S&P 500...
MLPguy Post
Week Thoughts: Takeout Bid Stops Midstream Bleeding Midstream broke out of its 6-week slump this week, helped by a private equity bid lobbed in Tuesday night, but also helped by risk-on broad market action and rebounding commodity prices.
MLPguy Post
Week Thoughts: Midstream Checked, Market Unbalanced Midstream stocks declined for a 6th straight week, this time joined by a pretty scary broad stock market decline on Friday. Broad market fear appears to be joining the energy sector antipathy and midstream apathy we’ve seen all summer.
MLPguy Post
Five Years Since Midstream Peak: Universe Update and In Memoriam The end of next week, the last trading day of August, will be the 5-year anniversary of the peak of the Alerian MLP Index.
MLPguy Post
Week Thoughts: Yield Inversion, Midstream Aversion Midstream stocks were down inline with broad equities this week, after a rally Friday that almost salvaged the week. It was a 4th straight negative week for midstream, and the MLP Index (on a price basis) now sits 11.3% lower than its high for the quarter reached in mid-July.
MLPguy Post
Week Thoughts: Un-Navigable Midstream Midstream and MLP stock performance accelerated to the downside this week, finishing with bigger losses this week than last week. It was also the 4th consecutive negative week for midstream, the longest such streak since late December.
MLPguy Post
Week Thoughts: Midstream De-Rated It was an inauspicious start to August for the stock market, for oil prices, and for the midstream sector due to the overriding influence of interest rates and tariff rates this week. MLPs had their second worst week of the year and worst week since early February.
MLPguy Post
Week Thoughts: Midstream Flagging into Earnings Barrage Midstream started the week strong Monday, but the bounce back was short-lived as midstream sold off each of the remaining days of the week, even as oil prices stabilized and the broad market rallied. Canada and a few larger corporations dragged down broader midstream indexes relative to the MLP Index, which continues to hold up well in a backdrop of upstream carnage.
MLPguy Post
Week Thoughts: Sweltering Energy Discontent Hits Midstream Midstream stocks, and MLPs in particular, held up ok this week, all things considered. This week saw a combination of negative macro forces converge to crush energy stocks more broadly.
MLPguy Post
Summer Cliff Notes: Answers to Common Questions on Midstream and MLPs I have recently been receiving a flurry of more basic questions from advisors who appear to be circling back to the midstream and MLP sector after a long layoff. The questions sometimes reflect implied misconceptions in the question itself, but also reflect how little time advisors care to spend to delve into the nuance of the midstream sector.
MLPguy Post
Week Thoughts: Uptrend is Midstream's Friend Midstream rode higher commodity prices and a record-setting broad equity market to another positive week. The steady grind higher for midstream continues. This was the 6th straight positive week for the MLP Index, which is up up 5.7% over those 6 weeks (WTI oil price is up 13.1% over that same time).
MLPguy Post
Week Thoughts: Midstream Floats Higher in Light Action On the week of America’s birthday, U.S. midstream (MLPs and corporations) outperformed Canadian ones, but the overall sector kept pace with a positive week for the S&P 500 and utilities. The AMNA crested 25% total return for 2019 so far and is off to a good start for the back half of the year.
MLPguy Post
Week Thoughts: Midstream Leads at Midpoint MLPs finished positive for the week, making it three straight positive weeks for MLPs to close out strong month of returns helped by a bounce back in oil prices and broad equity markets. Utilities were soft this week, and came in with first half returns below midstream and below the S&P 500, despite nearly 70 basis point reduction in the 10-year treasury interest rate.