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MLP post

TSP_TransferTSP_Transfer
in Fund Discussions
@Junkster Missed your earlier M L P post ????
Anyways, You might be getting some M L P,s or their debt in some of your Junk Fund portfolios !


Kinder Morgan's attempt to reassure instead stirs up more questions
Dec 4 2015, 18:55 ET Seeking Alpha
Kinder Morgan (NYSE:KMI) rolled over late in today's trade to close -12.7%, not far off an all-time low $16.56 reached earlier in the session, as its midday attempt to reassure investors about its dividend and cash flow did little to ease concerns.

Analysts increasingly expect a dividend cut, given that KMI said it will not issue more equity and plans to retain its investment grade rating, which means it also cannot issue more debt; KMI could sell assets but only at bargain basement prices, or find additional alternative financing, but it already issued a big chunk of convertible preferred shares this year.

"Dividend growth is unrealistic,” says Jefferies' Vivek Pal, calculating that the company needs a 50% dividend cut to avoid being downgraded to junk.

TheStreet.com's Dan Dicker, still a KMI bull, believes Rich Kinder will not force a full-scale capitulation of its shareholders by slashing the dividend.

Citi analyst Faisel Khan keeps his rating at Neutral with a reduced $22 price target, incorporating a 40% dividend cut.

KMI is now the weakest pipeline operator in the S&P 500 this year, -60% YTD.
http://seekingalpha.com/news/2967346-kinder-morgans-attempt-to-reassure-instead-stirs-up-more-questions

Comments

  • JunksterJunkster
    edited December 2015
    And ETE down over 57% from its earlier high this year and EPD down 40% on top of the aforementioned KMI 62%. Not affecting my junk munis whatsoever though. I had said that just maybe the so called experts will be proven prescient in their call for a bloodbath in the junk corporate market. I get leery when too many are making the same call though. But the action in corporate junk compared to equities and junk munis, the latter hitting historical highs on a total return basis just this past Wednesday, is downright nasty. The default rate among smaller gas and oil producers just keeps piling up. As mentioned previously, for now would not touch the junk corps with a ten foot pole. Januaries are by far junk's best month historically so anxious to see what that month brings this time around.
  • heezsafe
    @Junkster Agree. Corporate junk is actually in a lot more distress than I think many (most?) people believe. Specifically,
    http://wolfstreet.com/2015/12/02/distress-in-corporate-debt-spikes-to-september-2009-level/
    Just look at the distress ratios for some of the sectors that haven't been mentioned yet in the news. Not insignificant, and they're growing. So much of it is unsecured, or subordinated; in the event of a default, investors will get very little in recovery.
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