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KED Reports Earnings MarketWire 7-07 Kayne Anderson Energy Development Company reported a Net Increase (decrease) in Net Assets Resulting from Operations of $5.159 million. Net investment loss was $1.5 million. Net realized gains was $0.9 million. The Net increase in unrealized gains was $5.8 million. Top five investments in private MLPs were in Direct Fuels [midstream pipeline] which is doing great, Millenium [midstream pipeline] that is doing great, International Resouce Partners [coal] that is performing slightly below expectations due to some operational problems; ProPetro [Rockies natural gas pipeline that is losing business (ProPetro bought Utah drilling, and KED brought back the old CEO of that company), the ProPetro CEO was let go, business now improving but their loans are not current and some interest was written off], VantaCore Partners [asphalt business] that is doing OK despite decline in construction. Net asset value as of May 31, 2008 was $23.51/share. Public MLPs and MLP Affiliates were $84.6 million with an average yield of 8.0%; Private MLPs (including warrants) were $166.8 million with an average yield of 7.9%; and Fixed Income investments were $34.1 million with an avereage yield of 8.9%. KED estimates dividends, distributions, and interest income will be approximately $5.8 million/quarter. The debt-to-total-asset ratio was approximately 22%. From the Conference Call: Public MLPs are growing their distributions at double digit rates and KED projects that to continue, while KED would not give guidance on the increase of private equity MLP distributions. Privete MLPs tend to have higher coverage ratios and are building a cushion - and this should result in higher growth going forward. Why don't private MLPs yield more that public MLPs? KED: They do. Your press release does not show that KED gave an example of Interhational Resouce Partnerships where the units were purchased at 8.5% and KED increased its valuation, so that yield has gone down. KED was asked about their view of the MLP IPO market. Three IPOs were done this year, raising $750 million. We think the window is still open to do more. It is currently harder for upstreams to do IPOs. KED in discussions with operators who may form private MLPs. TTO Reports Earnings Business Wire 7-09 Tortoise Capital Resources reported DCF for the three months ended May 31, 2008 was approximately $2.377 million, an increase over the prior quarter of approximately $0.2 million. TTO paid out $2.3 million or 98% if DCF during the quarter. TTO rates each investment’s risk profile on a scale of one to three. As of May 31, 2008, all portfolio companies achieved a rating of one, indicating portfolio performance is at or above expectations with trends and risk factors that are generally favorable to neutral. The weighted average yield-to-cost on the investment portfolio (excluding short-term investments) as of May 31, 2008 was 8.9%. Net assets increased from $117.7 million or $13.28 per share at February 29, 2008 to $121.5 million or $13.69 per share at May 31, 2008. GNV Reports Earnings Business Wire 7-14 GSC Investment Corp. reported Net Investment Income of $3,195,473 [divided by 8,291,384 share = $0.3853/share - compared to a dividend of $0.39/share]. Net loss on investments was $384,225 resulting in a Net Increase in Net Assets Resulting from Operations of $2,811,248 or $0.34/share compared to $3,679,748 or $0.59/share in Q2-07. Net asset value was $11.75/share [compared to $11.80 at the end of the last quarter]. As of May 31, 2008, the weighted average current yield on GNV's first lien term loans, second lien term loans, senior secured notes, unsecured notes and the GSCIC CLO subordinated notes were 7.7%, 10.1%, 11.5%, 12.2% and 8.4%, respectively, which results in an aggregate weighted average current yield of 10.0%. [At the end of the last quarter, the weighted average current yield on the GNV's first lien term loans, second lien term loans, senior secured notes, unsecured notes and structured finance securities were 8.1%, 10.8%, 11.5%, 12.2% and 8.2%, respectively, which results in an aggregate weighted current yield of 10.3%] As of May 31, 2008, 33.6%, or $52.5 million, of GNV's interest-bearing portfolio was fixed rate debt with a weighted average current coupon of 11.7% and 47.6%, or $74.4 million, of its interest-bearing portfolio was floating rate debt with a weighted average current spread of LIBOR plus 6.1%. There were no non-performing or delinquent investments during the quarter. From the Conference Call: This quarter we worked on diversification of our portfolio. GNV's five largest was equal to 26% of the portfolio vs. a 40% share of the top five investments a year ago. The largest investment [19% of portfolio] is our CLO, which contains 145 investments. The weighted average yield on the portfolio was down due to the falling yields on floating rate assets - which was nearly offset by the cost of our floating rate debt being down. Turcane Holdings was the investment with the largest markdown [$2.2 million]. For calculating fair value of the portfolio: [1] 33% of the investments were liquid; 13% were valued by an independent firm; [3] 17% valued by market quotes; and [4] 37% valued internally - thus 63% based on market inputs or by the independent firm. At the end of the quarter, GNV had 39 investments in 37 companies. At the end of the quarter, GNV had $60.7 million borrowed. In May - two investments were added to the watch list, resulting in a total of 4 investments or 11% of the dollar amount of the portfolio. GNV's $6.5 million investment in Atlantis Plastics is the only GNV investment where a less than par recovery is expected - Atlantis Plastics is being sold and GNV is working on maximizing its recovery. For the total portfolio, the average debt to EBITDA ratio was 4.8x. The impact of our CLO to GNV earnings is yet to hit, but when it does [in Q3 of their fiscal year - calender quarter number four], the average yield it will generate is at a 20.36% interest rate. No investment in the CLO is in default or is delinquent. The leveraged loan market is challenging and continues to be volatile. CLOs had been the most active loan investments in prior years - now very few are being done. We think many high yield bonds are over-priced based on their risks. We expect continued increased covenant breaches and defaults in the market in general. We are focused on maintaining our credit quality of our investments. GNV's NII covers the dividend - and GNV expects that to continue. We would not do a secondary in this market [implied - due to price/NAV being below one] - we would do rights offering - but we have liquidity. Greg Mason with Steffil Nicholas: There appeared to be some impact on your return from the CLO - did you do accrual? GNV: Yes we did, at 8% on the $30 million. After the third quarter it will be 20%. What will it be in Q3? GNV - it will be a blend between the current 8% and the eventual 20%. Mason: What are the issues for the companies in the watch list? GNV: [1] Atlantis Plastics. [2] EuroFresh with tomatoes concern - but expect it to come out OK. We project improving. [3] Terphane Holdings is a $10 million investment. Our senior secured note is very high in the capital structure. The company has a reasonable leverage ratio. They make plastic coverings and packaging in Brazil. It has a loan that matures next year, and since the market conditions are so uncertain, that upcoming maturity is a concern. [4] And GNV had a $1.5 million investment is M/C Communications - which is experiencing weaker earnings. Mason: What are the current EBITDA trends of your companies/investments in your portfolio in general? GNV: In portfolio itself, one third of the companies have earnings ahead of last year - one half have with weaker earnings. For the total balance sheet - is it modestly lower. In CLO - two thirds are performing ahead of prior year. Loans on the Watch List EuroFresh loan at cost was $6,894,636 while fair value was $4,585,000 M/C Communications loan at cost was $1,564,727 while fair value was $943,510 Atlantis Plastics Films loan at cost was $6,476,904 while fair value was $3,964,690 Terphane Holdings first loan at cost was $4,854,132 while fair value was $3,443,500 Terphane Holdings second loan at cost was $5,094,049 while fair value was $3,611,948 Terphane Holdings third loan at cost was $498,822 while fair value was $355,000 On 7-01 Wachovia Upgraded On 6-04 Zacks downgraded ACAS to a Hold from a Buy. On 6-09 Wachovia Initiated covereage of PSEC at Outperform. On 6-11 Robert W Baird initiated coverage of ACAS with a "neutral" rating and set the target price at $33. On 6-12 Oppenheimer initiated coverage of ALD with an "outperform" rating and set the target price at $22. On 6-12 Friedman Billings upgraded ALD from "underperform" to "market perform" at set the target price at $15. On 6-12 Oppenheimer initiated coverage of AINV with a "perform" rating. On 6-12 Oppenheimer initiated coverage of KCAP with an "outperform" rating and set the target price at $13.50. On 6-27 Stifel Nicolaus Initiated KED at Buy. On 6-02 CSE declared a dividend of $0.60/share payable on or about June 30, 2008 to shareholders of record on June 16, 2008. The ex-dividend date will be June 12, 2008. On 6-06 PNNT declared a distribution of $0.22/share payable on June 30, 2008 to stockholders of record as of June 23, 2008. On 6-06 HCD declared a distribution of $0.2625/share payable on June 30, 2008 to holders of record on June 20, 2008. On 6-16 KCAP declared a dividend of $0.41/share payable on July 28, 2008 to shareholders of record as of July 9, 2008. On 6-19 NGPC declared a dividend of $0.40/share payable July 11, 2008 to stockholders of record on June 30, 2008. NOTE #1: This page is ment to be a supplement for those already getting monthly sector updates from another source. Data entry errors sporadically happen. There are other metrics not covered here that should not be ignored. NOTE #2: This page has a forcasting spreadsheet - and until that mathamatical model has had a year or two of testing, it is probably best for you to totally ignore it. NOTE #3: The owner of this site owns shares in NGPC - and this could distort the coverage of that BDC. |