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PalmDesertRat Comments (508)
 
Could this be the sign of a market top? When the "experts" all decide it's a good time to sell,it often is.
3 Feb, 07:51 PM Reply Like

dividend_growth Comments (1854)
 
KMI will be living on the back of KMP holders. Because of the MLP structure, expansion capital has to be financed through new issues of shares, thus diluting existing owners. Thus, MLPs selling new shares is more caused by availability of attractive projects.

However, KMI will always get 45% of the total profits, and will benefit more from any successful expansions.
3 Feb, 08:39 PM Reply Like

bigbenorr Comments (339)
 
Hmmm, but the distribution is still higher than KMI, and as far as I understand the taxes will be lower (or deferred) on KMP's payouts.
3 Feb, 09:07 PM Reply Like

Dr. V Comments (1025)
 
Poor investors? You make it sound like one side wins.

Read:

http://bit.ly/xJEfS6

It is indeed win/win.
6 Feb, 02:59 AM Reply Like

PalmDesertRat Comments (508)
 
As they say there is more than one way to skin a cat.

If KMI needs expansion capital they could look at other alternatives, such as bringing in other companies with a carried interest, selling a portion of another project, borrowing,etc.

In fact I'm sure a company like KMI has thoroughly analyzed all alternatives together with their highly paid advisors. They've concluded that the best alternative for KMI is to get the money out of the retail investor. Which is why I made my first comment.

I prefer to buy low and sell high rather than buy high and hope to sell higher. But that's just me.
4 Feb, 06:42 AM Reply Like

River18 Comments (139)
 
I think the fact that Bernanke has interest rates at Zero percent, until the cows come home, represents a great time for companies to borrow cheap money to grow and expand. After all one of the reasons to have interest rates so low is to help the banks from going belly up. Many corporations are borrowing money close to zero percent and buying back stock or growing their enterprise.
3 Feb, 09:46 PM Reply Like

Daniel Wilson Comments (30)
 
MLPs time their secondaries to take advantage of fully valued shares, if possible, but the motivation behind secondaries is the opportunity to put the money to work in a (hopefully) accretive way.

Low interest rates has nothing to do with KMP issuing equity, but it is helping MLPs issue debt for project funding.
3 Feb, 10:45 PM Reply Like