Giant MLP Energy Transfer Announces New Preferred Units

Giant MLP Energy Transfer (NYSE:ET) has announced the issuance of new preferred units.

The shares will be the 3rd fixed-to-floating rate unit the company will have outstanding.

The shares will carry with them the issuance of a K-1 at tax time.

Shares will like carry credit ratings of BB from S&P and Ba2 from Moodys–not investment grade but fairly strong.

The shares will likely be issued with an initial coupon of 7.50% to 7.625%, although with a fixed to floating rate issue there are many moving parts such as the spread that will apply when the coupon begins to float in 5 years.

The preliminary prospectus can be read here.

The OTC Grey Market ticker has been announced as ETPEP which means we should see pricing on the issue tonight.

10 thoughts on “Giant MLP Energy Transfer Announces New Preferred Units”

  1. I’ll throw a few bones out to be chewed on:
    Experienced managements and a history thru ups and downs,
    Steady payers when it would have been convenient to make excuses,
    Their share of detractors whose observations are not based on NOT being in the chair managing tough businesses,
    Common div under pref,
    not running to the bond brokers to load up the balance sheet,
    essential businesses shave/sleep/ship/support lots of real lives,
    Here are the commons with prefs on top to investigate as I have this week:
    I own two, sold one (and UMH earlier) and am okay with the sweetened returns above current average. May be at fair value right now?
    FFXDF (QDI by the way although an IRA cap gain candidate, paid to wait, mentioned it a few months ago here), MNR, MAA, CDR.
    I expect some flak! JA
    PS: This is easier than being a hockey player.

    1. Joel, you will get none from me…For me anyways its all about matching ones risks that correctly align to the investment and the proper entry point to execute the trade. And of course that depends on what each person’s criteria is.
      Im afraid Blues needed that game 4 to win the series. Jets just look bigger, faster, and create more open space with the puck. Bennington cant stop them all.

    2. Typo above: not FFXDF that is on a watch list of mine, a Fairfax Company.
      I meant FRHLF, Freehold Royalty. Sorry, neighboring brain cell.

    3. I prefer Altagas(ALTGF) and Enbridge(EBBGF). Trades in US dollars. Some exposure to energy sector (as well as utilities). Paying 6.8% BB- rated and BB+ rated. Low reset rate off the 5 year US TBILL but offset by big discounts to PAR. As they come closer to their next call date, I would expect that discount to shrink.

      Some additional information on Canadian resets that I found doing some due diligence on these type of investments

      https://www.raymondjames.ca/branches/premium/pdfs/preferredsharesreport.pdf

      I guess I find Grid’s sock drawer a good place for me also

        1. Danzeb, I am sure it is. I own EBGEF and EBBNF which is a play off the 1.8% 5 yr US Tbill from 2017 reset. I also own EBRGF. I can certainly relate to mistyping the 5 digit OTC issues as 5 letters exceeds my memory limit. Of course F is a freebee because it stands for Foreign, but it still taxes my limit.

        2. Danzeb : sorry – it is as you stated EBGEF.

          Grid : I saw the IG rating on Enbridge. It is what I called a mixed IG instead of a ‘”pure” IG so I went with the lower rating. People must really hate the Canadian dividend issue. ENBA on the US exchanges trade about 4% over par and have a current yield of 6.14%. Same company with tens of thousands of shares daily. Let’s see would I rather get 6.8% and buy it 20% under Par or go with ENBA at far less yield and 4% over par?

          In terms of ETP, you have the K1 tax item (not opposed to K1) which also adds some tax considerations. With that said, this ETP is a good offering, I just prefer a different company because I think I can earn more.

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