Giant MLP Global Partners Announces New Fix-to-Floating Issue

Giant midstream MLP Global Partners (NYSE:GLP) has announced the issuance of a new fixed-to-floating rate preferred stock issue.

Details are not announced as of yet, but we may have an interest–for at least a ‘flip’ if we can buy it right–we’ll have to see the details.  The issue will involve a K-1.

The preliminary prospectus is here.

Thanks to George for the ‘heads up’ on this issue.

8 thoughts on “Giant MLP Global Partners Announces New Fix-to-Floating Issue”

  1. Could be a decent coupon in that the common is currently paying a 10%+ (at 18.85) dividend on the common. Not a big fan of K1’s , but if the return is good, I can deal with it. Lets see what the coupon ends up being.

      1. The coupon rate was just announced at 9.75%, so it must be a fairly risky security to pay at this level.

        1. Looks like Kaptain Lou is correct.
          Yes, if you’re doing preferreds that pay a decent coupon, the risk is real. But the coupon alone is just one part of the risk equation. As they say; no risk, no reward.

          Global Partners LP Prices Public Offering of Series A Preferred Units
          Business Wire 31-Jul-2018 5:54 PM

          Global Partners LP (NYSE:GLP) (“Global” or the “Partnership”) today announced that it has priced an offering of 2,400,000 of its 9.75% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units, liquidation preference of $25.00 per unit (the “Series A Preferred Units”), at $25.00 per Series A Preferred Unit in an offering registered under the Securities Act of 1933, as amended. In connection with the offering, Global granted the underwriters a 30-day option to purchase up to 360,000 additional Series A Preferred Units. Distributions on the Series A Preferred Units will be payable quarterly and are cumulative from and including the date of original issue to, but excluding, August 15, 2023 at a fixed rate of 9.75% per annum of the stated liquidation preference of $25.00. On and after August 15, 2023, distributions on the Series A Preferred Units will accumulate for each distribution period at an annual floating rate equal to the three-month LIBOR plus a spread of 6.774%. Global intends to use the net proceeds from this offering to reduce indebtedness under its credit agreement. Global expects to close the sale of Series A Preferred Units on August 7, 2018, subject to the satisfaction of customary closing conditions.

          1. The last moody’s investment rating I found was from 2015. B2 credit rating. I don’t know what this issue is.

        2. This is where you have to dig in and find out why its so high. If its a bridge type capital infusion to deleverage from a recent acquisition or something like that the risk would minimize over time.. If its basically being issued to run a mediocre outfit on being leveraged to the hilt and shoveling out quarterly payments to the unitholders that is a different situation. And I am sure management will be 100% truthful and accurate with their stated goals and means to accomplish them, lol.

  2. Tim and George,

    Thanks so much for finding this jewel. Big cap and fairly long history of paying large dividends to the commons. While the preferred coupon has not been determined it probably will not be so shabby. I bought some SSW-H, the lowest coupon ones, and probably will sell off some higher SSW preferreds to buy GLP preferred.

  3. DCP-B has been climbing nicely and I am already in that pretty deep. Im not a really able to go big on these K-1 MLP preferreds as I dont mess with those forms and buy in tax free accounts. The UBTI limit is a bit worrisome for me also so I cant look at these types until I dump B.
    One of my frequent (when available) trading preferreds went wild today. Bought 400 of ASRVP at 27.75 after it dropped 75 cents or so. Then it explodes back over $30 before settling back near where it started at 28.50. This has been fun one to play with over the years due to is bouncing, illiquidity, and being years past first call and way over par.

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