Rentech Nitrogen Partners (RNF +12.3%) powers ahead for a second day after it said its $320M...


Rentech Nitrogen Partners (RNF +12.3%) powers ahead for a second day after it said its $320M debt offering fully finances estimated costs of its announced expansion and maintenance projects. David White sees the news, combined with the explosion of the Texas nitrogenous fertilizer producing plant, as positive for RNF, also a nitrogenous fertilizer producer.

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Comments (6)
  • Chris Damas
    , contributor
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    I don't agree.

     

    Jim Cramer said RNF was a "buy down here" last night on Mad Money.
    That's enough to make anything go up 10% the next day.

     

    None of the other nitrogen producers are up more than about 1% so it isn't because of the Texas fertilizer explosion.
    19 Apr 2013, 03:20 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2862) | Send Message
     
    The brief here leaves out the fact that part of this offering will be used to retire higher cost debt, and that the lower debt service obligations will mean there will be approximately $1.75/unit of cash available for distributions over the 2014-2017 period. RNF is up on the prospect of higher distributions.

     

    The explosion in Texas has a few ways to look at it. First, less production means less supply and higher prices. Or new safety regulations mean increased cap-ex. Or how many plants does RNF have, and does an accident at one plant mean the distribution gets slashed?
    19 Apr 2013, 04:10 PM Reply Like
  • Chris Damas
    , contributor
    Comments (1727) | Send Message
     
    It's amazing how little information is gathered before people comment.

     

    The West, Texas ammonia depot is one of probably hundreds in the USA. There was no production only storage and maybe blending, and the ammonia lost was 1 millionth of what the US consumes every year. Rentech's only ammonia plant at East Dubuque, Illinois is about 850 miles from Texas and has no relation to the accident and so there is no distribution that will be slashed because of this.

     

    The units are up though. But they could decline equally quickly. Look at Cramer's call on HFC a couple of months ago. Same deal - big time up then big time down.
    19 Apr 2013, 04:27 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2862) | Send Message
     
    I wasnt saying the distribution could be cut because of this, I was saying that if there was an accident at RNF's plant, what happens to the distribution? The headline suggests that the explosion is a positive development, which I disagree with.

     

    And I did enough research to know RNF was up due to the debt restructuring last night, and not just attribute it to Cramer.
    19 Apr 2013, 04:42 PM Reply Like
  • Chris Damas
    , contributor
    Comments (1727) | Send Message
     
    My apologies.
    19 Apr 2013, 06:42 PM Reply Like
  • Chris Damas
    , contributor
    Comments (1727) | Send Message
     
    It looks like they had ammonium nitrate at that site - storage and blending. Retail farm centers would be impacted by regulation - more for Agrium than for producers such as Rentech.

     

    http://nbcnews.to/13ye7ki

     

    http://bit.ly/104UacW-/
    19 Apr 2013, 08:03 PM Reply Like
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