Dec. 4, 2014, 3:25 PM
- Enbridge (ENB +10.8%) soars to all-time highs on heavy volume following news of its sweeping plan to raise its dividend by 33% and transfer ownership of its Canadian pipelines to affiliates in a bid to lower funding costs for future expansion and new projects.
- The dropdown allows ENB “to accelerate dividend growth immediately and for the next four-plus years,” ScotiaBank analyst Matthew Akman says.
- "It's another attempt to remove the conglomerate discount by streamlining its businesses," says Colin Cieszynski of CMC Markets.
- The move comes as rival TransCanada (TRP +1.6%) faces pressure from activist investors to overhaul its business, including accelerating dropdowns into its U.S.-based affiliate TC Pipelines (TCP +0.6%) and a spinoff of its power business.
- EEP +6.6%, EEQ +7.3%.
Sep. 19, 2014, 10:29 AM
- TransCanada (TRP +4.8%) is sharply higher in early trading as speculation abounds that U.S. activist hedge funds - perhaps including Dan Loeb's Third Point, which has amassed a position in recent months - are reviewing the company for a possible breakup.
- Responding to recent trading activity, TRP defends its corporate structure as the best way to maximize profit and dividend payouts to shareholders
- TRP also remains committed to plans to sell the rest of its U.S. natural gas pipeline assets to its TC PipeLines (TCP +4%) MLP over the coming years; it expects the assets to generate nearly $500M EBITDA in 2016 and beyond.
Feb. 11, 2014, 3:12 PM
- Boardwalk Pipeline Partners (BWP +7.1%) lost nearly half its value yesterday after slashing its payout by more than 80%, but some analysts see a buying opportunity amid the carnage.
- Citigroup upgrades shares to Buy from Neutral, urging value investors to note the severity of yesterday’s move relative to where other midstream MLPs trade on a cash flow multiple basis; the firm figures BWP trades at 10.3x 2015 EBITDA and 9.4x 2016 EBITDA, more favorable than other midstream MLPs with similar challenges such as TC Pipelines (TCP) and Niska Gas Storage Partners (NKA).
- Given the weaker outlook, Morgan Stanley says BWP/Loews (L) made the wisest choice to substantially reduce the distribution rate while remaining able to fund the capital plan internally, preserving maximum value.
- Deutsche Bank is staying away, however, maintaining its Sell rating with a $12 price target (from $20), expecting a longer, slower restoration of distribution.
Aug. 23, 2013, 12:25 PM
- TC Pipelines (TCP -2%) is downgraded to Underperform from Buy with a $51 price target (from $53) at BofA Merrill Lynch, which says the rating change brings TCP more in line with other dry natural gas exposed MLPs such as SEP, BWP and EPB.
- The firm cites valuation after solid recent gains, minimal organic growth over the medium-term, some remaining re-contracting risk, expected low single-digit cash distribution growth, and the continued sporadic timing of potential dropdowns from general partner TransCanada (TRP).
May. 17, 2013, 3:58 PMTC Pipelines (TCP +2.6%) is upgraded to Buy from Neutral with a $51 price target at BAML on plans to acquire additional equity interests in Gas Transmission Northwest and Bison. The firm views TCP's recently announced drop-down as alleviating most concerns about uncertainty around the ability to re-contract pipeline capacity on attractive terms and below peer-average distribution growth. | 1 Comment
May. 16, 2013, 8:28 AMTransCanada (TRP) plans to sell down its stake in two natural gas pipelines to affiliated company TC PipeLines (TCP) in a ~$1B deal including debt, which it says will free up funds for capital investments. TCP -2.8% premarket after saying it would sell 7.7M units in an effort to raise funds for the acquisition. | Comment!
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