SWHM

Atlas Siblings Each Offer Different Opportunities

Citibank analyst cut the target to $9 on 11/14 based on fear that APL will violate debt covenants in 1Q09 if oil stays around $65, which Citibank assumes. If so, the banks would renegotiate and charge higher interest rates, etc. This would drastically reduce the distributions. This seems contrary to Cohen's comments during conference call and the existing hedges. What is Citibank missing?

Atlas Pipeline: As Dividend Continues, Why Is Stock Falling?

On November 14, Citibank issued a new downgrade, to $9, based on the assumption that oil will be $65 in 1Q2009 and, if so, APL will violate its debt covenants. That would lead to renegotiations with banks greatly increasing interest rates and a huge cut in the distribution. This fear seems directly contradicted by Cohen's comments in the conference call, relying on the hedges already in place. Any thoughts on the likelihood that Citibank has correctly concluded that the hedges will not protect APL at these prices?