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Non-Tech : Income Investing
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From: Elroy11/5/2025 8:58:04 AM
3 Recommendations

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I've mentioned the high coupon on the NGL-B and NGL-C preferreds a few times. They currently are both paying about 11.5%.
NGL itself reported last night, with a great report in terms of future growth. They're increasing growth Cap Ex of the current fiscal year (which ends in March) from $60m to $160m. The increase is to be able to support new contracts which increase processed water volumes by 500k per day for the next nine years. NGL raised fiscal 2026 EBITDA forecast and said fiscal 2027 EBITDA will be above $700m (fiscal 2025 EBITDA was about $620m).

Anyways, the point is the business strength makes it a lot less likely that things for NGL may go South and they may put the preferreds into arrears (as they were for three years starting with Covid). My hunch (just a hunch) is they're going to get EBITDA as high as possible for their fiscal 2027 (which ends in March 2027), and then in about Q2 2027 issue additional long term debt to redeem all outstanding preferreds.

NGL-B and C are publicly traded, NGL-D is private. The D's must be redeemed by H2 2027 or they can be put back to the company. The B's and C's have been trading around $22.30 (par is $25), and they're the safest 12% yield I've ever known.

NGL is an MLP, and the preferreds give a K-1 with one box each year, box 4BC "Payments for use of capital" which (I think) is classified like regular income for tax purposes.
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