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Albert Alfonso

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  • Atlantic Power Refinancing: Positive For Common And Preferred [View article]
    I think this deal is quite the coup for debt holders, including for the preferred stock. AT was able to access capital at an attractive rate, though with harsh terms (50% of cash swept). The current discount to par to should narrow.

    As for the dividend to common stockholders, the company noted that it is under review. A cut seems to be priced in, but I still expect some volatile short-term.
    Feb 28 01:08 PM | Likes Like |Link to Comment
  • Atlantic Power: Is Another Dividend Cut In The Cards? [View article]
    Hi,

    Not sure where you saw that info. AT declared a dividend inline with its previous rate.

    JE is another stock that had already lowered its dividend and may need to do another cut due to worsening fundamentals. However, there payout seems to be much stronger short-term compared to AT's.
    Feb 23 01:57 PM | Likes Like |Link to Comment
  • Atlantic Power: Is Another Dividend Cut In The Cards? [View article]
    AT's present management was transferred over from when it was held via a PE firm. I agree, this team needs to go ASAP.
    Feb 5 07:33 AM | 1 Like Like |Link to Comment
  • Atlantic Power: Is Another Dividend Cut In The Cards? [View article]
    CD,

    I am not sure how to response, but your comment merits one.

    I will admit that AT duped me into believing the dividend was safe back in late 2012. However, this turn out to be very false. The company's press releases, CC statements, and presentations turned out to be utterly misleading.

    I turned bearish AT the moment I read its Q4 2012 earnings report and saw that suddenly a large portion of its cash flow and revenues were gone. The FL assets were sold at less than 1.0x EBITDA, yet AT failed to mention that they generated the majority of its cash flow.

    I sold AT at $7.00 per share, for a loss of well over 40%. I know many others followed me out and have since avoided the future declines.

    Also, if you think my article is the cause for the decline, you are ignoring the recent downgrade from a major Canadian firm (TD). AT is very widely held in that country, likely more so than in the US.
    Feb 3 10:36 AM | Likes Like |Link to Comment
  • Atlantic Power: Is Another Dividend Cut In The Cards? [View article]
    I agree. If it weren't for the poison pill, AT would be an ideal target for a PE firm. Its assets inside a lower cost of capital structure would be much more profitable.
    Feb 3 09:38 AM | Likes Like |Link to Comment
  • Atlantic Power: Is Another Dividend Cut In The Cards? [View article]
    Hi,

    I probably should have been clearer there. $50M is pretty much the amount of the current dividend. However, as noted in the first comment, we may also have to factor in AT's preferred dividend payments. These currently run at $13M per year. Combined, these total $63M.

    The current loan covenant regarding the 2018 debt will limit AT's dividend payments to the greater of $50M or $68M (2% of net assets). However, net assets will take a hit in Q1 due to the expected make-whole payments.

    There is also the issue as to how far the new covenants will restrict future dividend payments.
    Feb 3 02:52 AM | Likes Like |Link to Comment
  • Atlantic Power: Is Another Dividend Cut In The Cards? [View article]
    The company was very unlikely to have the cash needed to liquidate the 2014 notes.
    Feb 1 10:18 PM | 1 Like Like |Link to Comment
  • Atlantic Power: Is Another Dividend Cut In The Cards? [View article]
    They are basically paying off long-term debt with short-term debt. The rate on the old senior secured facility had a LIBOR margin of 4.25%. I expect the new debt to be even higher.
    Feb 1 10:17 PM | Likes Like |Link to Comment
  • Atlantic Power: Is Another Dividend Cut In The Cards? [View article]
    Hi Chris,

    Net assets will plunge once the Q1 charge is realized.

    The press release did not mention of the preferred dividends were included in the total dividend payments figure. If so, these obviously take preference over the payments dividends to the common.
    Feb 1 10:09 PM | Likes Like |Link to Comment
  • Atlantic Power's Debt Burden Looms Large Over The Stock [View article]
    search google for TSE:AZP-A
    Dec 14 11:00 AM | Likes Like |Link to Comment
  • Atlantic Power's Debt Burden Looms Large Over The Stock [View article]
    Hi Christian,

    I cannot say I have. They seem to have limited liquidity and as you noted are trading at a deep discount to par. My guess would be that they are safer than the common but not by much.
    Dec 13 01:01 PM | Likes Like |Link to Comment
  • Atlantic Power's Debt Burden Looms Large Over The Stock [View article]
    AT's poison pill has to be one of the most shareholder unfriendly moves I have ever seen. AT has valuable assets, worth well in excess to its debt, but the management would rather keep their jobs than sell the company.
    Jul 10 06:25 PM | 2 Likes Like |Link to Comment
  • Atlantic Power's Debt Burden Looms Large Over The Stock [View article]
    Yes, AT does have some cash, but $50M is less than 5% of its debt. Power prices will not help AT much as it has long term PPA in place which basically lock in its margins. The thing is about AT is that it is just not that profitable, mostly due to its crushing high-yield debt load.
    Jul 10 06:23 PM | Likes Like |Link to Comment
  • Atlantic Power's Debt Burden Looms Large Over The Stock [View article]
    CD,

    Spark some selling? I have no position in AT, long or short. I did at one time have a long position, but was sold out after the abysmal Q4 2012 earnings.
    Jul 10 06:20 PM | Likes Like |Link to Comment
  • Atlantic Power: A 10% Dividend Yield And Potential Sale Could Yield An Additional 70% Capital Gain [View article]
    This article seems to be glossing over or ignoring several factors about AT.

    1. It is still not clear what changed between November 2012 and February 2013 that resulted in the company to eliminate the majority of its explicitly promised and investor coveted dividend.

    Really, it is not clear what happened? The company sold off its FLA assets which generated about 33% of EBITDA but over 60% of cash flow. The new assets, while generating EBITDA, generate virtual no cash flow.

    2. The new dividend is safer, as it is a lower percentage of EBITDA and operating cash flow.

    If by safer you mean 100% of cash flow, then yes. AT's dividend is unsustainable, especially considering its debt due in 2014, which it plans to fund partly with equity.

    3. We do not believe that management will put the company up for sale without shareholder pressure.

    Put the company for sale? I doubt it. They seem to want to hold onto their jobs more than create shareholder wealth.

    4. Finally, as management and directors own few shares, an activist investor will be able to initiate a sales process easier than if management held a significant stake.

    Umm, AT's shareholder rights plan, AKA poison pill, will snuff out any activist shareholder http://prn.to/12keywQ
    Jul 9 07:25 PM | 10 Likes Like |Link to Comment
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