lorddarley

Top 10 Energy Stocks and an Overlooked Power Fund

One minor correction of a typo in that last post:

I'm hopeful that cross-defaults of that type are [NOT] present, and will ask for confirmation at the next cc.

LD

Top 10 Energy Stocks and an Overlooked Power Fund

Atlantic Power units, which I acquired recently, make up a large position for me and crtain clients. A few points were not mentioned in Cliff W's article that were important to me when I decided to invest.

(1) On the plus side, they advise that their project debt is non-recourse to the parent. That's important in case one of the projects turns out to be a stinker. However, the loan documents for each transaction are not available, so I don't know if there are cross-default provisions (i.e. a failure under one project is a failure for all), which could be almost as bad. I'm hopeful that cross-defaults of that type are present, and will ask for confirmation at the next cc.

(2) Another plus. The looney is in the crapper. That's had the effect of saving lots of money, because the share dividend and the coupled 11% note are payable in looneys, while the revenue from projects is US dollars.

(3) On the "negative" side (or maybe it's positive if you like ballsy management), they bought Auburndale in November by cleaning out the credit line. The debt is reasonable, but there is little margin for error. This is not your grandmother's utility company.

Anyway, it's nice to see coverage on these units, which are obscure, but very promising.

LordDarley