Legacy Reserves Is the Most Leveraged among Peers
Legacy Reserves (LGCY) has $1.2 billion of outstanding debt on its balance sheet, which resulted in a debt-to-adjusted-EBITDA ratio of 6.4x at the end of the first quarter of 2016.
MLPs are going through a liquidity crisis due to a decline in earnings driven by a fall in commodity prices.
Memorial Production Partners (MEMP) has hedged a significant 89% of 2016 production.
NYMEX near-month Henry Hub natural gas futures contracts are currently trading below $2.0 per MMBtu on concerns over rising natural gas inventories and the decline in natural gas demand.
Legacy Reserves has the most “sell” ratings among the selected peer group. 37.5% of analysts rate LGCY a “sell” and the remaining 62.5% rate it a “hold.”
In this series, we’ll analyze the current liquidity and leverage positions for Vanguard Natural Resources (VNR), EV Energy Partners (EVEP), Memorial Production Partners (MEMP), and Legacy Reserves (LGCY).
The recent 5.5% year-over-year gain for home prices has put the FHFA House Price Index about 3% above its April 2007 level.
Home prices have eclipsed their April 2007 peak and are now hitting new highs. In March 2016, the FHFA reported that home prices rose 0.7% month-over-month and 5.5% year-over-year.
From March 2015 to March 2016, the Pacific states took the lead with home price appreciation of 9.5%, followed by the Mountain states with a gain of 8.5%.
U.S. municipal debt looks attractive against other bond sectors, and we see potential for inflows after munis’ recent strong performance.
Generally, MLP yield moves in the same direction as Treasury yields in the long term. MLP yields trade at a spread over Treasuries.
The higher increase in WTI versus Brent resulted in a narrowing of the WTI-Brent spread. Brent oil first-line futures prices rose 1.9% to $48.70 per barrel in the week ended May 20.
According to data released on May 19, 2016, US crude oil production fell 0.1% in the week ended May 13, 2016. A decline in crude oil production negatively impacted crude oil heavy midstream MLPs.
Mont Belvieu ethane prices fell marginally by 0.7% to $0.193 per gallon in the week ended May 20, 2016. Prices rose 2.6% to $0.194 per gallon in the previous week.
The Henry Hub–Mont Belvieu fractionation spread rose to $14.30 per barrel in the week ended May 20, 2016. It was $13.40 per barrel in the previous week.
The series covers movements in key indicators that impact MLP performance to help you make informed decisions about your investments.
One of the primary reasons for Ferrellgas Partners’ (FGP) high leverage level is its high capital expenditure.
The ten-year bond yield rose by 14 basis points to 1.84% for the week ending May 20, 2016. Ginnie Mae TBAs fell by 4 ticks. They closed at 105 17/32 and outperformed Fannie Mae TBAs.
For the week ending May 20, 2016, Fannie Mae TBAs ended at 104 19/32—down 10 ticks for the week.
Last week, the ten-year bond yield rose 14 basis points to 1.84%. Mortgage rates rose 6 basis points to 3.64%.