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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: E_K_S who wrote (50042)	11/14/2012 9:08:12 PM
From: Spekulatius	1 Recommendation Read Replies (1) \| Respond to of 78748

I bought a bunch of SEP today at 27.3$ average. I did not think an secondary was imminent but it occured obviously to provide an equity contribution for the dropdown of the interest in the Maritimes and Northeastern Pipeline from SE. My models states that we are looking at a very safe 7.2% yield with a mid single digit cash flow and distribution growth per unit through organic growth and dropdowns. That is a total return in the low double digits, which is not bad, given SEP excellent credit metrics, support from the general partner SE and the lack of commodity exposure (all revenues are fee based). The only issue is with the NG storage assets that may be less in demand, since NG is plentifulh, with less need of storage. This may put pressure on renewal rates, once the contracts are up, but that is only a moderate part of SEP business. I regard SEP as an "equity bond".