Seeking Alpha

Albert Alfonso

 
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  • Atlantic Power: The Dividend Remains Unsustainable [View article]
    The dividend on the preferred stock seems safe for now. It must get paid before any common stock dividends.
    Nov 12, 2014. 10:58 AM | 1 Like Like |Link to Comment
  • Atlantic Power: The Dividend Remains Unsustainable [View article]
    Sofos,

    The mandatory payments are from the new loan terms. This is done via the 50% cash sweep.

    "A Cash sweep, or Debt sweep, is the mandatory use of excess free cash flows to pay down outstanding debt rather than distribute it to shareholders." http://bit.ly/10XZtmJ
    Nov 12, 2014. 02:50 AM | Likes Like |Link to Comment
  • Update: Atlantic Power - From Bad To Worse [View article]
    That explains today's pop...
    Oct 16, 2014. 05:05 PM | Likes Like |Link to Comment
  • Update: Atlantic Power - From Bad To Worse [View article]
    Bankruptcy was avoided with the debt refinancing. AT has no big debt coming due till 2017.

    However, this does not mean that it should have been paying the dividend. FCF was zero after adjusting for the sweeps.

    Another big issue has to do with the 2018 PPAs. They are likely to reset lower. The company has sold assets in the past when it was unable to secure a PPA at a profitable level.
    See http://seekingalpha.co...
    Sep 18, 2014. 01:23 PM | 2 Likes Like |Link to Comment
  • Atlantic Power Cuts Dividend 70%; CEO Steps Down [View article]
    If you trust AT's numbers (I certainty am skeptical), the company has a book value of $6 after debt. However, these assets seemingly cannot generate an adequate return without the PPAs.
    Sep 17, 2014. 02:22 PM | Likes Like |Link to Comment
  • Atlantic Power Cuts Dividend 70%; CEO Steps Down [View article]
    TruffelPig,

    The first dividend cut came as a total surprise. This one was much more obvious.

    FCF after the sweeps was/is close to zero. I am shocked they were able to keep the dividend going for so long.

    More bad news today: Credit rating may be cut by S&P. This explains the 10% drop.
    Sep 17, 2014. 02:19 PM | Likes Like |Link to Comment
  • Atlantic Power Cuts Dividend 70%; CEO Steps Down [View article]
    That is weird. Should have said $0.40. Correction submitted. Should be fixed soon.
    Sep 17, 2014. 02:12 PM | 1 Like Like |Link to Comment
  • 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, 2014. 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, 2014. 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, 2014. 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, 2014. 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, 2014. 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, 2014. 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, 2014. 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, 2014. 10:17 PM | Likes Like |Link to Comment
More on AT by Albert Alfonso
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