Kayne Anderson MLP Investment Company Announces Distribution of $0.55 per Share for Q4 2015; Announces Investment in Closed-End Funds by Kayne Anderson
Kayne Anderson MLP Investment Company (the “Company”) (NYSE:KYN)
announced today its quarterly distribution of $0.55 per share for the
quarter ended November 30, 2015. The distribution will be payable on
January 15, 2016 to common stockholders of record on January 8, 2016,
with an ex-dividend date of January 6, 2016.
“The board has elected to reduce the quarterly distribution from $0.6575
per share to $0.55 per share, a reduction of $0.1075 per share, in light
of the weak conditions in the energy and MLP markets,” said Kevin
McCarthy, CEO of the Company. “Our net distributable income has declined
over the past twelve months due to a variety of factors, including
merger activity (where the acquirer has a lower yield), the effects of
deleveraging (where lower rate debt has been repaid by selling higher
rate MLPs) and the dividend cut by Kinder Morgan, Inc. Further, we’ve
become more convinced that MLP management teams will slow their
distribution growth rates in 2016, and many MLPs will opt to build
coverage instead and keep distribution levels flat. As a result of these
factors, we’ve reduced the Company’s dividend to a level that we believe
is sustainable, given current market conditions, and can grow over time
as the market recovers.”
Separately, the advisor to the Company, KA Fund Advisors (or “KAFA”),
and its principals have agreed to purchase newly issued shares of KYN,
KYE, KMF and KED, funded in part with 100% of the after-tax management
fees received during the quarter. These purchases total $14 million
across all the four closed-end funds managed by KAFA, and of this
amount, $10 million will be invested in KYN. The purchases will be made
at the greater of market price or net asset value as of the close of
business on Friday, December 18. As of Wednesday, December 16, the
purchase price for KYN would have represented a premium of 11.9% to the
closing market price. Bob Sinnott, President and CEO of Kayne Anderson
Capital Advisors commented, “Kayne Anderson continues to believe in the
long-term prospects of the Company as well as the sustainability of the
MLP market. Because Kayne Anderson is purchasing primary shares, this
transaction at the same time strengthens the Company’s balance sheet.”
The transaction is expected to close on December 23, 2015.
The Company estimates that 100% of its distribution for the quarter
ended November 30, 2015 will be treated as a return of capital for tax
purposes. This estimate is based on the Company’s anticipated earnings
and profits for fiscal 2016 and its accumulated earnings and profits as
of November 30, 2015. The final determination of the tax character of
the distribution will be made in early 2017 when the Company can
determine its actual earnings and profits for the full year (including
gains and losses on the sale of securities during fiscal 2016) and may
differ substantially from this preliminary information.
Kayne Anderson MLP Investment Company is a non-diversified,
closed-end management investment company registered under the Investment
Company Act of 1940, whose common stock is traded on the NYSE. The
Company's investment objective is to obtain a high after-tax total
return by investing at least 85% of its total assets in energy-related
master limited partnerships and their affiliates (collectively, “MLPs”),
and in other companies that, as their principal business, operate assets
used in the gathering, transporting, processing, storing, refining,
distributing, mining or marketing natural gas, natural gas liquids
(including propane), crude oil, refined petroleum products or coal.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: 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 results to differ from
the Company's historical experience and its 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; MLP industry risk; leverage
risk; valuation risk; interest rate risk; tax risk; and other risks
discussed in the Company's filings with the SEC. You should not place
undue reliance on forward-looking statements, which speak only as of the
date they are made. The Company undertakes no obligation to publicly
update or revise any forward-looking statements made herein. There is no
assurance that the Company's investment objectives will be attained.
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