MLP governance structure puts investors at risk, Moody's says

|By:, SA News Editor

Moody’s warns the corporate governance structure of MLPs provides less protection to investors and creditors than the structure of a typical public company, calling it a credit negative for the MLP sector.

At public companies, accountability to shareholders is a net plus for bondholders, even when bondholder and shareholder interests differ, Moody's says; by contrast, in the MLP model, the general partner’s limited accountability to the partnership’s actual owners - the common unitholders - is a disadvantage for the MLP’s bondholders.

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