Targa Resources Partners LP Sells a Very Tasty Fixed to Floating Preferred Issue

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While we are not buying perpetual preferreds at this moment, if we were we would have to give the new issue sold by Targa Resources Partners (ticker:NGLS) a strong look.

This issue is a fixed to floating rate issue with a 9% fixed yield until 2020 (note that this is a shorter fixed period than most fixed to floating rate issues–most are 10 years instead of 5)–this is a very strong yield for a solid Master Limited Partnership. Targa is a midstream natural gas partnership with over 22,000 miles of gathering systems and pipelines. The company has over $200 million in distributable cash in the quarter ending 6/30/2015.  This is no small MLP with over $6 billion in annualized revenue.

There are no recent comparable new issues (MLP preferred issues) to study to see how this may trade, but for those that are interested in this issue we believe it is best to sit back and let it trade for a week or two before purchase to ensure the market accepts this issue as a fairly priced offering.


This issue will pay monthly distributions and will issue a K-1 at tax time.  The issue will begin to trade on the OTCC Gray market tomorrow.

Details of the issue can be found here.

Tim McPartland

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Tim McPartland
Tim McPartland is a private investor with over 45 years of investing experience. His analysis, research and writing is devoted to the hunt for income producing securities of all types, but in particular specializing in preferred stocks, exchange traded debt and Master Limited Partnerships.
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