#61553
Re: Cobas AM: Nueva Gestora de Francisco García Paramés
Lo veo así.
Sé que otros foreros también la tienen muy estudiada pero el tema es la divergencia de opiniones sobre qué van a hacer con el dividendo y el precio de monetización de los IDRs.
He mostrado mi postura clara al respecto desde hace más de un año: mi apuesta clara es TGP aunque me estoy cubriendo una parte comprando también TK por si hacen una golfada (que veo improbable).
El mercado no es gilipollas y si se ha llevado TK desde los 10$ a los 3$ es por algo.
¿y si los IDRs no valen una mierda porque los dividendos nunca se volverán a subir a 70cts/q?
En SeekingAlpha hoy han colgado la opinión de un banco de inversión al respecto (no apto para believers de TK y los IDRs como el negocio del siglo)
Summary Incentive distribution rights (IDRs) were a way to incentivize the sponsor company to dropdown assets onlyto the MLP as the sponsor would get an increasing share of distribution growth. However, after most MLPs increased distributions too much, it has become clear that IDRs were not a good idea. Good thing Teekay LNG has already cut distributions and stated they believe the company will not be anywhere close to split-levels in the foreseeable future, effectively saying the IDRs have little to no value.
However, in 2018 the parent company announced they were planning on monetizing the IDRs. Since then no monetization has happened, but it remains an overhang on TGP units. We believe it is time to either put a buyout permanently on hold or resolve on a conservative sum. Ultimately, we believe TGP is set to re-rate higher as leverage falls, particularly if IDRs are resolved reasonably.
Key Points Teekay LNG is currently distributing $0.19/quarter although it has announced that it will be increased to$0.25 in May. The first IDR split begins at $0.4125/quarter. We estimate distributable cash flow to be about$0.65/quarter in 2020, i.e. the new distributions are 38% of availability. However, with leverage beyond the comfort level, the next several years need to be focused on balance sheet repair and beyond that retaining cash flow for fleet replacement and eventual growth.
IDR value has been shrinking. TGP is in a strange position as there is no cash flow and no identifiable hope of cash flow for years to come, so effectively a buyout would be simply for some long-dated extremely out of the money option. However, even that option value has been shrinking for the following reasons: The MLP industry is shifting from distribution growth. Investors place little value on that growth, particularly as MLPs have not been able to cover increasing distribution requirements. Investors have instead preferred more organically generated growth and reduction of leverage. Thus even in cases where IDRs have actually associated cash flow, there has been a dramatic reduction in takeout value (we expect 8-10 times cash flows is the current market rate).•LNG shipping is out of favor, particularly those MLPs with exposure to that sector.
The market clearly believes that distributions for those partnerships are likely to see distribution compression, meaning that IDR takeouts for those other situations were needlessly dilutive. Again driving down the value of future similar transactions. What's it worth. By reaching the high splits we estimate TGP would be paying about $17 million of annual IDR with the potential to grow beyond that. However, at 8x-10x $17 million the undiscounted value would be $136 million to $170 million.
Assuming 5 years at least before this is possible and a 10%-12% discount rate, the value would be $77 million to $105 million. Given the partnership has no aspirations of returning toa high payout model, even as debt comes down, the practicality of realistic reaching those levels is small, so any buyout would be to remove the long-dated out of the money option value that it might happen. Thus putting a realistic probability rating on those valuations, we believe something below a $50 million TGP share payment to TK to remove the IDR is more reasonable.
What to do. We expect the sponsor has taken out expectations that are anchored to outdated now perhaps unrealistic expectations. However, the uncertainty is still an overhang on TGP valuation. Ultimately, we believe TGP announcing they have no intention of buying out the IDRs would be a solution or drawing a hard line on price would be another. One way or the other, TGP clearly has the leverage in the negotiation. Valuation. With units trading at 6.2x adjusted EBITDA, at a 7.3% yield following the stated increase, and best in case cash flow visibility, it is hard for us to see a downside in the shares (outside of silly price IDR takeout dilution). Thus, we still like this name for multi-year value creation
Sé que otros foreros también la tienen muy estudiada pero el tema es la divergencia de opiniones sobre qué van a hacer con el dividendo y el precio de monetización de los IDRs.
He mostrado mi postura clara al respecto desde hace más de un año: mi apuesta clara es TGP aunque me estoy cubriendo una parte comprando también TK por si hacen una golfada (que veo improbable).
El mercado no es gilipollas y si se ha llevado TK desde los 10$ a los 3$ es por algo.
¿y si los IDRs no valen una mierda porque los dividendos nunca se volverán a subir a 70cts/q?
En SeekingAlpha hoy han colgado la opinión de un banco de inversión al respecto (no apto para believers de TK y los IDRs como el negocio del siglo)
Summary Incentive distribution rights (IDRs) were a way to incentivize the sponsor company to dropdown assets onlyto the MLP as the sponsor would get an increasing share of distribution growth. However, after most MLPs increased distributions too much, it has become clear that IDRs were not a good idea. Good thing Teekay LNG has already cut distributions and stated they believe the company will not be anywhere close to split-levels in the foreseeable future, effectively saying the IDRs have little to no value.
However, in 2018 the parent company announced they were planning on monetizing the IDRs. Since then no monetization has happened, but it remains an overhang on TGP units. We believe it is time to either put a buyout permanently on hold or resolve on a conservative sum. Ultimately, we believe TGP is set to re-rate higher as leverage falls, particularly if IDRs are resolved reasonably.
Key Points Teekay LNG is currently distributing $0.19/quarter although it has announced that it will be increased to$0.25 in May. The first IDR split begins at $0.4125/quarter. We estimate distributable cash flow to be about$0.65/quarter in 2020, i.e. the new distributions are 38% of availability. However, with leverage beyond the comfort level, the next several years need to be focused on balance sheet repair and beyond that retaining cash flow for fleet replacement and eventual growth.
IDR value has been shrinking. TGP is in a strange position as there is no cash flow and no identifiable hope of cash flow for years to come, so effectively a buyout would be simply for some long-dated extremely out of the money option. However, even that option value has been shrinking for the following reasons: The MLP industry is shifting from distribution growth. Investors place little value on that growth, particularly as MLPs have not been able to cover increasing distribution requirements. Investors have instead preferred more organically generated growth and reduction of leverage. Thus even in cases where IDRs have actually associated cash flow, there has been a dramatic reduction in takeout value (we expect 8-10 times cash flows is the current market rate).•LNG shipping is out of favor, particularly those MLPs with exposure to that sector.
The market clearly believes that distributions for those partnerships are likely to see distribution compression, meaning that IDR takeouts for those other situations were needlessly dilutive. Again driving down the value of future similar transactions. What's it worth. By reaching the high splits we estimate TGP would be paying about $17 million of annual IDR with the potential to grow beyond that. However, at 8x-10x $17 million the undiscounted value would be $136 million to $170 million.
Assuming 5 years at least before this is possible and a 10%-12% discount rate, the value would be $77 million to $105 million. Given the partnership has no aspirations of returning toa high payout model, even as debt comes down, the practicality of realistic reaching those levels is small, so any buyout would be to remove the long-dated out of the money option value that it might happen. Thus putting a realistic probability rating on those valuations, we believe something below a $50 million TGP share payment to TK to remove the IDR is more reasonable.
What to do. We expect the sponsor has taken out expectations that are anchored to outdated now perhaps unrealistic expectations. However, the uncertainty is still an overhang on TGP valuation. Ultimately, we believe TGP announcing they have no intention of buying out the IDRs would be a solution or drawing a hard line on price would be another. One way or the other, TGP clearly has the leverage in the negotiation. Valuation. With units trading at 6.2x adjusted EBITDA, at a 7.3% yield following the stated increase, and best in case cash flow visibility, it is hard for us to see a downside in the shares (outside of silly price IDR takeout dilution). Thus, we still like this name for multi-year value creation
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