HOUSTON, Aug. 6, 2013 /PRNewswire/ --Salient Midstream & MLP Fund (the "Fund") (NYSE: SMM) announced today its net asset value (NAV) as of July 31, 2013. The Fund also announced that it had increased its dividend for the fourth consecutive quarter by 1.5% sequentially for the third quarter ended August 31, 2013.
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At the close of business on July 31, 2013, the Fund's net assets were $225.9 million and the NAV per share was $23.78, compared with April 30, 2013, when the net assets were $226.5 million and the NAV per share was $23.87.
On July 31, 2013, the closing share price of the Fund was $23.81, which was trading at a 0.1% premium to the NAV.
The Fund increased its quarterly dividend to $0.345 per share for the quarter ending August 31, 2013, which represents a 6.2% year-over-year increase over the $0.325 paid in August 2012. The increased dividend will be payable on August 29, 2013 to common stockholders of record on August 19, 2013. It is anticipated that the majority portion of this dividend will be treated as a return of capital for tax purposes. The final tax status of the dividend may differ substantially from this preliminary information, and the final determination of such amount will be made in early 2014 when the Fund can determine its earnings and profits for the 2013 fiscal year.
The Fund's quarterly distributions per share for the past year as of July 31, 2013 are listed below:[1]
AMOUNT | QUARTERLY GROWTH RATE (%) | PAYABLE DATE | EX-DATE | RECORD DATE |
$0.345 | 1.5% | August 29, 2013 | August 15, 2013 | August 19, 2013 |
$0.34 | 1.5% | May 29, 2013 | May 17, 2013 | May 21, 2013 |
$0.335 | 1.5% | February 28, 2013 | February 15, 2013 | February 19, 2013 |
$0.33 | 1.5% | December 3, 2012 | November 15, 2012 | November 19, 2012 |
$0.325 | -- | August 22, 2012 | August 15, 2012 | August 17, 2012 |
Past performance is no guarantee of future results. The tax characteristics of the distributions are as follows: 63% estimate return of capital for Q2 2013, 100% estimate return of capital for Q1 2013 and 100% return of capital for 2012. |
The Fund was invested in long-term investments as shown in the pie chart below as of July 31, 2013.
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Also as of July 31, 2013, the Fund's 10 largest consolidated holdings were:
Company | Sector | Shares | Amount (in millions) | Percent of Consolidated Gross Assets |
Enterprise Products Partners, LP* | MLP | 500,162 | $31.0 | 9.1% |
Plains All American Pipeline, LP* | MLP | 388,700 | $20.7 | 6.1% |
Enbridge Energy Management, LLC | MLP Affiliate | 644,524 | $20.3 | 6.0% |
Kinder Morgan Management, LLC | MLP Affiliate | 241,154 | $19.5 | 5.7% |
Williams Companies, Inc. | Midstream Company | 547,900 | $18.7 | 5.5% |
Kinder Morgan, Inc. | Midstream Company | 401,998 | $15.2 | 4.5% |
Linn Co, LLC | MLP Affiliate | 468,306 | $13.8 | 4.1% |
Energy Transfer Equity, LP* | MLP | 201,559 | $13.5 | 4.0% |
Golar LNG Partners, LP | Marine Midstream | 315,218 | $10.1 | 3.0% |
Targa Resources Partners, LP | MLP | 189,654 | $9.5 | 2.8% |
*Held indirectly through the wholly owned C-Corporation, Salient Midstream & MLP Fund, Inc. | ||||
The Fund's consolidated unaudited balance sheet as of July 31, 2013, is shown below:
Salient Midstream & MLP Fund | |||
Consolidated Balance Sheet | |||
July 31, 2013 | |||
(Unaudited) | |||
Assets | (in millions) | ||
Investments1 | $320.4 | ||
Cash and Cash Equivalents | 6.7 | ||
Receivable for Investments Sold | 12.2 | ||
Hedging and Other Assets | 1.6 | ||
Total Assets | 340.9 | ||
Liabilities | |||
Line of Credit Payable2 | 106.5 | ||
Derivatives - Short positions | 0.0 | ||
Other Liabilities | 8.5 | ||
Total Liabilities | 115.0 | ||
Net Assets | $225.9 | ||
The Fund had 9.5 million common shares outstanding as of July 31, 2013. | |||
1Investments include the gross underlying investments within the Salient Midstream & MLP Fund, Inc.'s (C-Corporation) of $91.9 million. | |||
2The line of credit payable includes the C-Corporation's $31M outstanding line as of July 31, 2013. | |||
Response to Recently Issued IRS Proposal
On August 2, 2013, the Internal Revenue Service ("IRS") issued proposed regulations which, if ultimately adopted in their current form, would require the Fund to aggregate investment holdings of its Subsidiary with its direct investment holdings for purposes of determining whether more than 25% of its total assets are invested in the securities of one or more "qualified publicly traded partnerships." Such "QPTPs" includes master limited partnerships ("MLPs"), in which the Fund and Subsidiary invest. The proposed regulations would not impact Fund investment in affiliates of MLPs or other Midstream Companies structured as corporations. If the proposed regulations are adopted and finalized in their current form, the Fund would reduce its overall investment in MLPs, whether held in the Fund directly or held by the Subsidiary, to no more than 25% of the Fund's total assets. The Fund would otherwise continue to pursue its investment objective and strategies.
The proposal has no immediate impact on the current operations of the Fund, and will not affect the ability of the Fund to qualify as a RIC for tax purposes in the current year. The IRS has requested comments on the proposal, with the comment period ending October 31, 2013. A public hearing is scheduled for December 9, 2013. If ultimately adopted, the proposed regulations would, unless altered, apply to quarters that begin at least 90 days after the date of publication of any final regulations.
The Adviser is evaluating possible investment alternatives in the event the proposed regulations are finalized. Elimination or reduction of the Subsidiary's investments in MLPs, and/or use of any alternatives, could negatively affect the Fund's investment returns.
Past performance is no guarantee of future results.
Salient Midstream & MLP Fund is a Delaware statutory trust registered as a non-diversified, closed-end management investment company under the Investment Company Act of 1940, as amended. The Fund's investment objective is to provide a high level of total return with an emphasis on making quarterly cash distributions to its common shareholders. The Fund seeks to achieve that objective by investing at least 80% of its total assets in securities of MLPs and midstream companies. There can be no assurance that the Fund will achieve its investment objective.
This press release contains "forward-looking statements" as defined under the U.S. federal securities laws. Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "project," "will," and similar expressions identify forward-looking statements, which generally are not historical in nature. Forward-looking statements are subject to certain risks and uncertainties that could cause actual future results to differ significantly from the Fund's present expectations or projections indicated in any forward-looking statements. These risks include, but are not limited to, changes in economic and political conditions; regulatory and legal changes; leverage risk; valuation risk; interest rate risk; tax risk; the volume of sales and purchase of shares; the continuation of investment advisory, administration and other service arrangements; and other risks discussed in the Fund's filings with the Securities and Exchange Commission. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. The Fund undertakes no obligation to publicly update or revise any forward-looking statements made herein. There is no assurance that the Fund's investment objective will be attained.
CONTACT:
Chris Moon
JCPR
cmoon@jcprinc.com
973-850-7304
Salient Capital Advisors, LLC
Investor Relations
mlpinfo@salientpartners.com
800-809-0525
[1] The amount of distributions may vary depending on a number of factors. As portfolio and market conditions change, the rate of distributions on Fund common shares could change. A portion of the Fund's returns may be comprised of ordinary income, return of capital and net realized capital gains. The Fund will determine the tax characteristics of all fund distributions after the end of the calendar year and will provide shareholders such information at that time.
SOURCE Salient Midstream & MLP Fund
