August 16, 2023 – Energy Transfer LP (NYSE: ET) announced it has executed a definitive merger agreement under which it will acquire all outstanding units of Crestwood Equity Partners LP in an all-stock transaction valued at approximately $7.1 billion.
As of 8/15, the 2.07 exchange ratio represented no premium to CEQP’s previous closing price. However, the CEQP debt and preferred securities will transition from a BB rated issuer to a BBB- rated issuer under Energy Transfer. Additionally, S&P put CEQP’s issuer and preferred credit rating on “watch positive” while also upgrading ET to BBB after the announcement. We therefore expect the CEQP 9 ¼ convertible preferred to trade higher and yield closer to that of the outstanding ET preferred securities.
Per public holdings, as of August 16, 2023, Infrastructure Capital Advisors, LLC (“ICA”) beneficially holds Crestwood Equity Partners LP 9.25% Preferred Partnership Units in the Virtus InfraCap U.S. Preferred Stock ETF (PFFA) and the InfraCap MLP ETF (AMZA), which represents 3.8% and 0.50% of each portfolio respectively. ICA also beneficially holds a position in Crestwood Equity Partners LP common stock in the InfraCap MLP ETF (AMZA), which represents 6.3% of its portfolio.
For more information about this transaction, see the press release here: https://www.businesswire.com/news/home/20230816214795/en/Energy-Transfer-to-Acquire-Crestwood-in-a-7.1-Billion-All-Equity-Transaction
DISCLOSURE:
The information contained herein represents our subjective belief and opinions and should not be construed as investment advice. The information and opinions provided should not be taken as specific advice on the merits of any investment decision. Investors should make their own decisions regarding any investments mentioned, and their prospects based on such investors’ own review of publicly available information and should not rely on the information contained herein. Infrastructure Capital Advisors, LLC nor any of its affiliates accepts any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of the information contained herein. This data includes information based on data and calculations sourced from Bloomberg and third-party sources. We believe that the data is reliable, we have not sought, nor have we received, permission from any third-party to include their information in this article. Comparative fund information is provided for informational purposes only, funds may have different characteristics and risks which are not presented. Many of the statements in this commentary reflect our subjective belief.
This information is not an offer to sell, or solicitation of an offer to buy any investment product, security, or services offered by Jay Hatfield, or Infrastructure Capital Advisors, LLC, (“ICA”) or its affiliates. ICA, will only conduct such solicitation of an offer to buy any investment product or service offered by ICA, if at all, by (1) purported definitive documentation (which will include disclosures relating to investment objective, policies, risk factors, fees, tax implications and relevant qualifications), (2) to qualified participants, if applicable, and (3) only in those jurisdictions where permitted by law. Jay Hatfield or ICA has beneficial long position in securities discussed either through stock ownership, options, or other derivatives; nonetheless, under no circumstances does any article or interview represent a recommendation to buy or sell these securities. This discussion is intended to provide insight into a market event and preferred stocks and is not a solicitation of any kind. ICA buys and sells securities on behalf of its fund investors and may do so, before and after any particular article herein is published, with respect to the securities discussed in any article posted. ICA's appraisal of a company (price target) is only one factor that affects its decision whether to buy or sell shares in that company. Other factors might include, but are not limited to, the presence of mandatory limits on individual positions, decisions regarding portfolio exposures, and general market conditions and liquidity needs. As such, there may not always be consistency between the views expressed here and ICA's trading or holdings on behalf of its fund investors. There may be conflicts between the content posted or discussed and the interests of ICA. Please reach out to the ICA for more information. Investors should make their own decisions regarding any investments mentioned, and their prospects based on such investors’ own review of publicly available information and should not rely on the information contained herein. ICA nor any of its affiliates accepts any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of the information contained herein. We have not sought, nor have we received, permission from any third-party to include their information in this article. Certain information contained in this document constitutes “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue” or “believe” or the negatives thereof or other variations thereon or other comparable terminology. Due to various risks and uncertainties, actual events or results may differ materially from those reflected or contemplated in such forward-looking statements. The information contained herein represents our subjective belief and opinions and should not be construed as investment, tax, legal, or financial advice. If you have any questions, please reach out to Craig Starr at Craig.Starr@icmllc.com or 212-763-8336.
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