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Page 2-Kayne Anderson MLP Investment launches 5.75m common share offering Internet Business News July 10,

2013 Wednesday

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Internet Business News

July 10, 2013 Wednesday

-Kayne Anderson MLP Investment launches 5.75m common share

offering

LENGTH: 220 words

10 July 2013 -- Houston, USA-based closed-end management investment company Kayne Anderson MLPInvestment Co (NYSE: KYN) said that it has commenced a public offering of 5.75m shares of its commonstock.

The company also intends to grant the underwriters a 45-day option to purchase up to 862,500 additionalshares to cover over-allotments, if any.

Net proceeds from the offering will be used to make additional portfolio investments that are consistentwith the company's investment objective and policies and for general corporate purposes, Kayne Andersonsaid.

Morgan Stanley (NYSE: MS), BofA Merrill Lynch (NYSE: BAC), Citigroup (NYSE: C) and UBSInvestment Bank (NYSE: UBS) are acting as joint book-running managers.

Kayne Anderson MLP Investment is a non-diversified, closed-end management investment company.

The company's investment objective is to obtain a high after-tax total return by investing at least 85% of itstotal assets in energy-related master limited partnerships and their affiliates and in other companies that, astheir principal business, operate assets used in the gathering, transporting, processing, storing, refining,

distributing, mining or marketing of natural gas, natural gas liquids, crude oil, refined petroleum productsor coal.

Find out more at www.kaynecapital.com.

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Page 3-Kayne Anderson MLP Investment launches 5.75m common share offering Internet Business News July 10,

2013 WednesdayLANGUAGE: ENGLISH

PUBLICATION-TYPE:Newswire

JOURNAL-CODE: IBN

Copyright 2013 Normans Media LimitedAll Rights Reserved


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Page 5ClearBridge American Energy MLP Fund raises USD1.2bn Internet Business News June 28, 2013 Friday

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June 28, 2013 Friday

ClearBridge American Energy MLP Fund raises USD1.2bn

LENGTH: 246 words

28 June 2013 -- ClearBridge American Energy (NYSE: CBA) MLP Fund Inc. reported the pricing has beencompleted for its initial public offering.

The Fund raised gross proceeds of approximately USD1.05bn in its common stock offering; assuming fullexercise of the underwriters' overallotment option, which may or may not occur, the Fund will have raisedapproximately USD1.2bn. Its shares trade on the New York Stock Exchange under the symbol "CBA."

The Fund's investment objective is to provide a high level of total return, with an equal emphasis on currentdistributions and capital appreciation. Under normal market conditions, the Fund will invest at least 80% ofits managed assets in US based energy MLPs.

ClearBridge American Energy MLP Fund Inc. is a newly organized, non-diversified, closed-endmanagement investment company which is advised by Legg Mason Partners Fund Advisor, LLC andsubadvised by ClearBridge Investments, LLC, both of which are wholly owned subsidiaries of LeggMason, Inc. (Legg Mason).

The underwriting syndicate was led by BofA Merrill Lynch, Citigroup, and Morgan Stanley.

ClearBridge Investments is a well established global equity manager focusing on proprietary research andfundamental investing. With over 45 years of experience building portfolios for clients seeking incomesolutions, high active share or managed volatility, long-tenured portfolio managers provide strong

leadership in a centralized investment structure.

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Page 6ClearBridge American Energy MLP Fund raises USD1.2bn Internet Business News June 28, 2013 Friday

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Page 8Devon MLP to own US midstream interests Oil & Gas Journal June 17, 2013

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Oil & Gas Journal

June 17, 2013

Devon MLP to own US midstream interests

SECTION:NEWSLETTER; GENERAL INTEREST QUICK TAKES; Pg. 6

LENGTH: 100 words

Devon Energy Corp. will form a publicly traded master limited partnership initially to own a minority

interest in the company's US midstream business.In the US, Devon owns six gas plants in Texas, Oklahoma, and Wyoming and gathering pipelines.

Devon said it expects to file a registration with the US Securities and Exchange Commission in this year'sthird quarter. An offering of partnership units will follow registration, subject to market conditions.

Devon will own the MLP general partner, all of its incentive distribution rights, and a majority of itscommon units after the initial public offering.


LANGUAGE: ENGLISH

PUBLICATION-TYPE: Magazine

Copyright 2013 PennWell Publishing CompanyAll Rights Reserved


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Page 10First Reserve backs new midstream MLP Platts Oilgram News June 13, 2013 Thursday

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Platts Oilgram News

June 13, 2013 Thursday

First Reserve backs new midstream MLP

BYLINE: Bridget Hunsucker

SECTION: The Americas Vol. 91 No. 115

LENGTH: 511 words

US private equity firm First Reserve is backing a new MLP, Century Midstream, which is in talks withNorth American producers to find long-term partners for projects as it evaluates how and where to breakinto the thriving midstream business.

"In the next couple of months we are going to look at all the [production] basins and opportunities anddecide what path we want to go down, whether it's a greenfield development or an acquisition," CenturyMidstream CEO Joseph Blount said Wednesday.

"We aren't going to rush out and do a transaction," he added.

First Reserve will commit up to $500 million support as co-founder of the company, Century Midstream

and First Reserve said in a joint statement to announce that new MLP had been "formally" launched. Thepartnership is being led by four principal managers, all midstream operation veterans, according to thepress release.

First Reserve, the largest private equity energy fund, has increased its energy business footprint over thepast five years. In April of 2009, it set up the First Reserve Fund XII LP worth about $9 billion, andplanned to invest in the midstream and downstream energy sectors, the company said at the time.

The previous year, it had set up the KA First Reserve LLC to invest in US energy infrastructure and boughtthe BORCO crude and products terminal in the Bahamas from Venezuelan state oil company PDVSA.

Leaders for First Reserve's newest investment hope to take advantage of the high demand for transportationto move increasing liquids-rich shale production to destination markets, Blount said.

"New drilling techniques and technology have opened previously uneconomic hydrocarbon basins and the

application of these technologies is driving significant increases in both natural gas and crude oilproduction in the US." according to the statement. "As such, the midstream sector is marked by a high levelof growth, creating numerous opportunities to identify suitable assets around which to build a portfolio."

But competition in the midstream sector is growing, Blount said, noting that there are now over 100publicly traded MLPs. "There is a lot of competition out there," he said, adding that Century Midstreamwill be unlike some MLPs, who acquire and sell assets quickly.

"We are confident that we are entering the space at the right time and we will have a successful long-termcompany," he said.


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Page 11First Reserve backs new midstream MLP Platts Oilgram News June 13, 2013 Thursday

The new partnership has a "broad blanket" approach to finding these assets and is considering opportunitiesin sending crude oil and/or natural gas liquids by pipeline, railcar and barge, Blount said.

The partnership plans to mostly seek out opportunities to build or acquire assets in the US, but "wouldn'trule out" Canada, he said.

The partnership is searching for "producer partners," who may not posses the expertise or time to roll outtheir own midstream MLP operations, Blount said.

"It is true that a lot of producers have MLPs or have the potential to put togetherMLPs," but many willpartner with established partnerships instead to focus on drilling, he said.

Bridget Hunsucker

LOAD-DATE: July 11, 2013

LANGUAGE: ENGLISH


JOURNAL-CODE: PN

Copyright 2013 The McGraw-Hill Companies, Inc. http://www.mcgrawhill.comAll Rights Reserved


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Page 13OCI plans IPO for US methanol unit Chemical Week June 10, 2013

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Chemical Week

June 10, 2013

OCI plans IPO for US methanol unit

SECTION:NEWSBRIEFS; Pg. 4

LENGTH: 176 words

Orascom Construction Industries (OCI; Cairo) will place its Beaumont, TX, methanol and ammonia facility

into a master limited partnership (MLP) in order to sell a minority stake in the operation via an initialpublic offering (IPO), the company announced 3 June. OCI expects the MLP to file a registration statementin June with the IPO to follow in the second half of 2013.

Proceeds from the IPO will be used to repay the MLP's outstanding debt and to fund a planneddebottlenecking project, OCI said.

MLPs do not pay corporate income tax if they receive at least 90% of their gross income from theexploration, development, mining, production, processing, refining, transportation or marketing ofminerals, natural resources, or industrial-source carbon dioxide; or from the transportation or storage ofcertain renewable and alternative fuels.

OCI acquired the Beaumont facility, which has a production capacity of 750,000 m.t./year of methanol and250,000 m.t./year of ammonia, from Terra Industries, which idled it in 2004. OCI restarted the plant in2012.


LANGUAGE: ENGLISH


Copyright 2013 Chemical WeekAll Rights Reserved


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Page 15Devon Energy to form MLP The Deal Pipeline June 6, 2013 Thursday

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The Deal Pipeline

June 6, 2013 Thursday

Devon Energy to form MLP

LENGTH: 291 words

Oklahoma City oil and gas explorerDevon Energy Corp. said Thursday, June 6, its board approved a planto form a publicly traded master limited partnership, orMLP, for its midstream assets and eventually takeit public. The MLP is expected to initially own a minority interest in the business, which includes natural

gas gathering and processing assets in Texas, Oklahoma and Wyoming. Devon expects the MLP to file aregistration statement with the Securities and Exchange Commission in the third quarter followed by aninitial public offering of its partnership units, depending on the condition of the markets. Devon said it willown the general partner of the MLP, all of its incentive distribution rights and most of its units, and willuse the proceeds to fund its operations. There have been rumors that activist investors would push Devon toconsider the MLP idea to boost its flagging stock price due to the company's focus on low-priced naturalgas. Last month Devon sold interests in natural gas production in Montana's Bear Paw Basin to utilityNorthWestern Corp. for an undisclosed sum. Devon said earlier in the year it could realize $300 millionto $500 million in proceeds from an MLP.

Gimme Credit LLC analyst Philip Adams views the news positively, as an MLP would return capital toDevon for redeployment into its exploration and production activities, cutting the need for externalfinancing, and also would create a second balance sheet for midstream capital raising activities. Devon's2009 decision to become an onshore North American exploration and production company was a radical,

timely change, Adams said, but the collapse of natural gas prices has made the process more difficult. -Claire Poole

DEAL SIZE

Undisclosed


LANGUAGE: ENGLISH

DOCUMENT-TYPE: Article

PUBLICATION-TYPE: Web Publication

Copyright 2013 The Deal, L.L.C.All Rights Reserved


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Page 17Coons bill would expand advantageous tax structure to renewables Inside Energy with Federal Lands April

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Inside Energy with Federal Lands

April 29, 2013

Coons bill would expand advantageous tax structure to renewables

BYLINE: Brian Scheid

SECTION:News

LENGTH: 668 words

For nearly 30 years, the fossil fuel industry has structured pipeline and other oil and gas projects under tax-friendly, capital intensive partnerships unavailable to the wind, solar and other renewable energy industries.

Now, a Senate Democrat from Delaware and a House Republican from Texas want to change that with abill which would radically expand the availability of these corporate structures, known as master limitedpartnerships.

The Master Limited Partnerships Parity Act, introduced by Senator Chris Coons of Delaware andRepresentative Ted Poe on Wednesday, has wide support, including Republicans and Democrats and broadswath of industry.

Even the oil and gas industry supports the bill, according to Coons. In a statement released shortly after thebill, he pointed to comments from Jack Gerard, president of the American Petroleum Institute, that hisgroup would back the legislation.

But Brian Straessle, a spokesman for the American Petroleum Institute, downplayed those comments.

The oil and natural gas industry understands the merits ofMLPs, Straessle said in a statement. We donot have an issue with and are neutral on Senator Coons' bill.

The companion bills introduced last week by Coons and Poe are beefed up versions of the MLP bills thetwo lawmakers proposed in 2012, but which never got passed. In addition to expanding MLP treatment torenewable energy projects, including wind, solar, biomass, geothermal, small irrigation, municipal solidwaste, hydropower and marine and hydrokinetic energy, the new bill would allow electricity storagedevices, waste heat to power, biochemical, carbon capture and storage and energy efficient buildings to

form as MLPs as well.Coons said allowing all types of energy projects to be structured as MLPs will keep the federal governmentfrom picking winners and losers.

It levels the playing field, said Poe, whose district includes a portion of Houston.

MLPs are business structures which are taxed as partnerships, but have ownership interests which can bepublicly traded, allowing income to be taxed at only the shareholder level. Structuring as an MLP allows acompany to avoid double taxation for income at both the corporate and shareholder levels, Coons said.


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Page 18Coons bill would expand advantageous tax structure to renewables Inside Energy with Federal Lands April

29, 2013MLP-structured projects can use this tax advantage to access lower-cost capital and more liquid financing,which in turn attracts more private financing, Coons said.

Under the current tax code oil, natural gas, coal extraction and pipeline projects can be structured as MLPs,

but renewable energy projects cannot. This stems from Internal Revenue Service rules which require 90%of an MLP's income to come from "depletable" energy resources, such as crude oil and natural gas. Thebills from Coons and Poe would change those rules.

The bill has far more congressional support than another bill aimed at ending the fossil fuel industries'MLP advantage introduced in May by Senator Bernie Sanders, a Vermont independent, and Rep. KeithEllison, a Minnesota Democrat. That bill, the End Polluter Welfare Act, called for a repeal of all federalsubsidies for the fossil fuels industry, including elimination ofMLPs entirely. Ellison and Sandersestimated that eliminating MLPs would create $2.4 billion in savings. Neither bill made it out of committeeand Ellison's bill garnered only three co-sponsors, while Sanders got none.

Coons' bill is sponsored by Senators Debbie Stabenow, a Michigan Democrat and the chairwoman of theSenate Agriculture Committee; Lisa Murkowski of Alaska, the top Republican on the Energy and NaturalResources Committee; and Jerry Moran, a Kansas Republican.

In a statement, Senator Ron Wyden, an Oregon Democrat and chairman of the energy committee, said hesupports the bill.

Poe's identical House bill is sponsored by Mike Thompson, a California Democrat; Peter Welch, a VermontDemocrat; and Chris Gibson, a New York Republican.

Ian Koski, a Coons spokesman, said offsets to cover the costs of the legislation have yet to be identified.

Brian Scheid

LOAD-DATE: May 24, 2013

LANGUAGE: ENGLISH


JOURNAL-CODE: IE



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Page 20Bills seek MLP status for renewable, electricity storage, carbon capture projects Inside F.E.R.C. April 29,

2013

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Inside F.E.R.C.

April 29, 2013

Bills seekMLP status for renewable, electricity storage, carbon capture

projects

BYLINE: Brian Scheid

SECTION:News; Pg. 2

LENGTH: 360 words

In a rare demonstration of bipartisanship on Capitol Hill, a Senate Democrat and a House Republicanintroduced bills Wednesday to make limited-tax partnerships used by the oil and natural gas industry fordecades also available to renewable power, energy efficiency and biofuels projects.

"It levels the playing field," Representative Ted Poe, a Texas Republican, said at a news conference withSenator Chris Coons, a Delaware Democrat.

The bills would allow several types of alternative-energy projects to organize as master limited

partnerships, structures that would free them from US taxes at both the corporate and shareholder levels.Oil and gas pipeline projects have been able to use the arrangement for nearly 30 years.

Coons said the bill would force the federal government to "stop picking winners and losers" in the energyindustry and help renewable projects avoid double taxation.

The measures are beefed-up versions ofMLP bills that Coons and Poe introduced last year. In addition toexpanding MLP treatment to renewable-energy projects -- including wind, solar, biomass, geothermal,small irrigation, municipal solid waste, hydropower and marine and hydrokinetic energy -- the new billswould also allow electricity storage devices, waste heat to power projects, biochemical, carbon capture andstorage and energy-efficient buildings to form as MLPs.

The bills also include a broader range of bipartisan and industry support than the bill which languished incommittee in 2012.

Coons' bill is cosponsored by Senators Debbie Stabenow, a Michigan Democrat and the chairman of theSenate Agriculture Committee; Lisa Murkowski of Alaska, the top Republican on the Senate Energy andNatural Resources Committee; and Jerry Moran, a Kansas Republican.

Senator Ron Wyden, an Oregon Democrat who chairs the energy committee and is on the FinanceCommittee, said he supports the legislation.

Poe's identical House bill is cosponsored by Mike Thompson, a California Democrat; Peter Welch, aVermont Democrat; and Chris Gibson, a New York Republican.

Ian Koski, a Coons spokesman, said offsets to cover the costs of the legislation have yet to be identified.


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Page 21Bills seek MLP status for renewable, electricity storage, carbon capture projects Inside F.E.R.C. April 29,

2013Brian Scheid


LANGUAGE: ENGLISH


JOURNAL-CODE: FE



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Page 23Top 10 Comparisons of REITs and MLPs Real Estate Finance and Investment April 29, 2013

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Real Estate Finance and Investment

April 29, 2013

Top 10 Comparisons of REITs and MLPs

LENGTH: 2804 words

HIGHLIGHT: The popularity of high-yielding tax-advantaged securities, such as U.S. real estateinvestment trusts (REITs) and master limited partnerships (MLPs), has soared over the last several yearsgiven the ongoing combination of central bank easing and rock bottom interest rates.

By Sean Pattap

Sean Pattap is a senior director in Fitch Ratings' U.S. REITs group.

Sean Pattap

The popularity of high-yielding tax-advantaged securities, such as U.S. real estate investment trusts(REITs) and master limited partnerships (MLPs), has soared over the last several years given the ongoingcombination of central bank easing and rock bottom interest rates. While REITs and MLPs are corporatebond issuers with many similarities, including liquidity needs and tax considerations, there are select key

differences between the two.No. 1 - Tax Implications

Tax Efficiencies

REITs and MLPs have greater tax efficiencies than corporations. A REIT is organized as a corporation orbusiness trust. By electing REIT tax status, the REIT is exempt from paying tax on the portion of incomepaid as dividends to shareholders. An MLP is structured as a partnership, which also allows greater taxefficiency, since partnership earnings are not subject to corporate taxation. By the same token, both REITsand MLPs are subject to higher event risk from future unfavorable changes in federal tax laws, although nonear-term changes in such policies are anticipated by Fitch.

No. 2 - Income

Limited Revenue Mix

Both REITs and MLPs are constrained in their revenue mix. To maintain REIT status, at least 75% of aREIT's income must be generated from real property or interests in real estate loans or securities. Similarly,an MLP is restricted under U.S. federal tax law to derive minimum of 90% of its income from qualifyingsources & generally natural resources or energy-type companies, with a few exceptions. Although thequantitative requirement is different, the principle of a focused investment strategy applies to bothstructures.

In the case ofMLPs, the definition of qualifying income has seen modest expansions over the last severalyears and now includes renewable fuels, industrial carbon dioxide and select chemical production facilities.


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MLPs have also enjoyed a large boost from the shale revolution in the U.S., which has boosted demand fornew infrastructure dramatically. However, the limited mix of each asset class has long-term growthimplications for each sector. ForMLPs, there are concerns about organic growth once shale-relatedinfrastructure has been built out.

By contrast, REIT investment opportunities are robust. Companies that have elected REIT status includelandlords across core property sectors such as multifamily, office, industrial, retail and healthcare. Inaddition, companies have converted to REITs that focus on more specialized asset classes such as celltowers, forest products, data centers and, more recently, prisons and billboards.

No. 3 - Structure

REIT Structure

REITs and MLPs have unique organizational structures that have implications for credit quality. An equityREIT is often, though not always, structured as an umbrella partnership REIT (UPREIT). Under thisstructure, the REIT is a parent that owns the vast majority of limited partner interests in an operatingpartnership (OP). The OP owns properties, and the REIT acts as the general partner for the OP.

The UPREIT structure enables third parties to contribute assets to the OP for cash or OP units that are

typically exchangeable on a dollar-for-dollar basis with the REIT's common shares. In the UPREITstructure, the REIT issues equity, including preferred and common shares, while the OP that owns theproperties is the obligor on unsecured debt.

MLP Structure

Under the MLP structure, the owner of the general partner (GP) is typically described as the sponsor. Asponsor can own GP interests in more than one MLP. Sponsors can be large corporations, MLPs, privateequity groups or individual investors. In addition to owning the GP interest, the sponsor may own asubstantial percentage of limited partner interests. Debt may be issued by the sponsor of the GP, the MLPor an operating LP below the MLP.

No. 4 - Financial Flexibility and Distributions

REIT Distributions

A REIT must distribute at least 90% of taxable income as dividends to shareholders to retain REIT status.This requirement has historically meant cash dividends, although the IRS temporarily allowed REITs todistribute dividends in new shares instead of cash for fiscal years 2009-2011. Through capital marketscycles, REITs have limited financial flexibility to retain capital compared with corporate issuers that havenot elected REIT status.

A typical way for a REIT to measure the sustainability of its dividends is based on an adjusted funds fromoperations (AFFO) payout ratio. Based on guidelines established by the National Association of Real EstateInvestment Trusts, funds from operations consists of net income, excluding gains (or losses) from propertysales, plus depreciation and amortization, plus adjustments for unconsolidated partnerships and jointventures (JVs). Fitch subtracts recurring capital expenditures and excludes noncash items included in FFOto arrive at AFFO and compares dividends paid to stockholders with AFFO. Absent external capital raisingor proceeds from asset sales, an AFFO payout ratio in excess of 100% is indicative of a non-sustainable

dividend and is not consistent with an investment-grade rating.Some REITs will pay out the minimum dividend required to achieve maximum flexibility, and most otherstarget 80%-85% to have competitive dividend yields while having some cash on hand for development,acquisitions and a small cushion.

MLP Distributions

Unlike REITs, MLPs have significant flexibility in establishing the level of distributions, and there are arange of distribution practices across the MLP space. Conservative distribution practices allow for somecash retention to provide a financial cushion in a downturn and to help fund growth capex. Cash available


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for distribution is typically measured as cash EBITDA less interest expense, less maintenance capitalexpenditures. MLPs commonly target a 1.0x-1.5x distribution coverage.

A key difference between MLPs and REITs is the presence of incentive distribution rights at the GP levelofMLPs. An MLP's GP generally holds rights that provide it with an increasing share of the incremental

cash flow the MLP generates. The GP's share of distributions usually starts at 2% and may climb as high as50%. These incentive splits encourage the MLP to increase its cash available for distribution and to pay outas much cash as possible.

Dividend Yield

REIT and MLP dividend yields are typically in the 4%-5% range but can migrate higher due to higherinterest rates, lower stock prices, conditions in the broader equity market and weakening credit profiles.Although there is no distribution requirement for an MLP like there is with a REIT, REITs and MLPs tendto be more reliant on capital markets than corporates; thus, maintaining high (and growing) distributions isan important characteristic of the business model of both sectors, as it helps guarantee access to capitalmarkets funding .

Alternative Funding Sources

There are no alternative secured financing markets forMLPs as there are for most equity REITs. If theunsecured bond market is uneconomical to REITs, they may elect to access the CMBS market, insurancecompany or bank principal mortgage markets as sources of contingent liquidity. Fitch measures contingentliquidity by comparing unencumbered assets (calculated as unencumbered property net operating incomedivided by a stressed capitalization rate) to unsecured debt. MLP assets do not have such alternativesources of liquidity beyond traditional bank lending and capital market funding, although MLP sponsorsmay provide some financial support. Investment-grade MLPs typically issue unsecured debt protected by anegative pledge, which allows for the issuance of secured debt as long as its outstanding debt becomesequally secured.

REITs have historically accessed the equity market, including follow-on common stock offerings and at-the-market equity offering programs, convertible debt and preferred stock. REITs have access to bank termloans and unsecured lines of credit. MLPs also access equity and hybrid equity markets through similarprograms, although institutional ownership has been limited due to tax filing complexity surrounding

partnership income. Individual unitholders ofMLPs are typically responsible for paying their share of thepartnership's income taxes, even if units are held in a retirement account. Because of the tax liabilities thisincurs for investors, large institutional investors that may not pay taxes, like pension funds, typically cannotown MLP units, which limits an MLP's pool of investors.

No. 5 - Lower Cost of Capital

Tax Advantage

Given their tax advantaged status, both REITs and MLPs enjoy lower all-in costs of capital compared withstandard corporate issuers. As a result, both REITs and MLPs are often able to outbid corporations forassets that have been put up for sale, a key factor in the strong growth seen in both sectors. In addition, OPunits in the UPREIT structure and MLP units are commonly used as currency to transact tax-deferredacquisitions. While an MLP's cost of capital tends to increase as the higher incentive distribution splits arereached, this tends to be carefully monitored by GPs, which have undertaken a number of actions to ensurethat their LP units remain an attractive investment proposition. Supportive actions by GPs have included anumber of incentive distribution rights re-sets to lower levels to provide more distribution growth at the LPlevel, as well as foregone distributions to the GP in select merger deals.

No. 6 - Governance and Control

REIT Governance

Publicly traded REITs are typically internally managed companies with corporate-style governancepractices. They enable shareholders through voting rights to elect boards of directors and exercise some


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degree of governance influence. These boards include independent directors under the rules and regulationsof the New York Stock Exchange (NYSE) and, in some cases, independent chairmen. Few equity REITs areexternally managed, and no rated U.S. equity REITs have external management.

MLP Governance

Corporate governance practices forMLPs are weaker since the board of the GP solely controls the MLPboard. MLPs do not have dedicated internal managements, and limited partners have no voting rights.However, most large MLPs are listed on the NYSE and must comply with NYSE listing requirements,such as the inclusion of independent directors.

No. 7 - Bankruptcy

Limited REIT Protections

REITs and MLPs are different in terms of structural protections to unsecured creditors in a bankruptcy. Inthe 2009 bankruptcy of General Growth Properties, Inc., special purposes entities (SPEs) were placed intobankruptcy by considering the financial health of the parent. The SPEs were no longer isolated and remote,although the court did not question the legal separateness of the SPEs or substantively consolidate theSPEs.

StrongerMLP Protections

ForMLPs, the partnership companies (i.e. entities at the GP level and below, including the MLP) can bestructured to effectively be bankruptcy-remote from the sponsor or holding company established by thesponsor to own its partnership units. This could limit recoveries forMLP creditors.

No. 8 - Liquidity

Similar Liquidity Constraints

Both REITs and MLPs have weaker liquidity positions than corporates due to low capital retentionflexibility. For REITs, Fitch's base case liquidity calculation compares a REIT's sources of liquidity(unrestricted cash, availability under unsecured revolving lines of credit and projected retained cash flowsfrom operating activities after dividend payments) with uses of liquidity (pro rata secured and unsecureddebt maturities, projected recurring capital expenditures and nondiscretionary development funding) over

an approximate two-year period. If sources exceed uses, a liquidity surplus is generated, and if sources areexceeded by uses, the result is a liquidity shortfall.

Similarly, MLPs are designed to pay out all or a high percentage of available cash, so ongoing access toexternal financing is critical to funding debt refinancing and growth objectives. As in the case of REITs,Fitch compares MLP sources and uses when assessing liquidity.

Contingent Liquidity

REITs have contingent liquidity from unencumbered assets, which could be pledged to secured lenders ascollateral should the unsecured debt markets become uneconomical. During periods of financial distress,MLPs with strong GP/sponsors may have contingent liquidity through downstream cash contributions or awillingness by the GP to forgo its incentive distribution.

No. 9 - Growth Strategies

Acquisitive Appetites

REITs and MLPs often seek growth via asset acquisitions or corporate mergers and acquisitions (M&As).REITs can acquire assets outright from third parties or interests in assets or real estate companies. BothREITs and MLPs have covenants in their bond indentures, which limit leverage and other credit ratios, andthese covenants may restrict the way in which a REIT may grow.

MLPs are frequently formed via an asset drop-down model, whereby the sponsor will sell qualifying assetsto its affiliated MLP and still retain indirect control of these assets via its GP ownership. MLPs may alsosubsequently grow by acquiring assets from unaffiliated third parties or by developing their own organic


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growth projects. Covenant packages tend to vary by issuer within the MLP space. Key bond covenants forMLPs typically include maintenance tests that restrict the MLP from incurring additional debt unlesscertain predefined ratios, such as minimum EBITDA coverage of interest and maximum debt-to-EBITDA,are satisfied. Although less prevalent in bond indentures, it is quite common forMLP bank creditagreements to include maintenance test ratios. Another common practice in corporate lending that generallyapplies to REITs and MLPs is bank facility covenants are more restrictive even where the banks andbondholders rank pari passu. This gives bank lenders greater ability to exert control during periods offinancial stress.

REIT Joint Ventures

JVs are another source of growth for REITs. REITs may act as GP or managing member for JVs, sourcingand managing investments for such entities. Institutions such as life insurance companies, pension funds orbanks may partner with REITs and invest in commercial real estate. REITs may charge JV fees, includingacquisition, disposition, financing, asset management and property management fees. If a REIT is receivingrecurring cash distributions from JVs that represent the REIT?s share of operating cash flow (i.e. excludingproceeds from asset sales or refinancings) and that cash flow does not have distribution lock-up or otherprovisions that may limit the ability of the REIT to receive cash flow, Fitch includes that income inrecurring operating EBITDA.

MLP Joint Ventures

MLPs have also pursued JV opportunities in both the construction of projects and in large scaleacquisitions. When analyzing an MLPs earnings and cash flow, Fitch tries to adjust for distributionsreceived from non-consolidated entities, like JVs. Fitch typically adjusts EBITDA to exclude equity inearnings but include actual cash distributions received.

No. 10 - Credit Measures

Key Considerations

Asset quality, scale of operations, management practices and financial results remain key determinants ofcredit quality for both REITs and MLPs.

Cash Flow

REIT and MLP metrics emphasize cash flow measures rather than equity-based ratios. REIT and MLPcash flows are generated under long-term agreements, and Fitch utilizes EBITDA as an indication of anentity's core unleveraged cash-generating capacity.

Leverage

REITs in the 'BBB' category tend to have leverage in the 5.0x-6.0x range, and MLPs in the 'BBB' categorytend to have leverage in the 3.5x-4.5x range. REITs can operate with higher leverage at a given rating levelthan MLPs due to alternative funding sources offered to REITs and their broader access to a larger pool ofinstitutional investors.

Credit RatingsMLP credit ratings are typically rated in the 'BBB' category due to favorable asset qualityand stable cash flows balanced by aggressive distribution and growth strategies and the need for continuedaccess to capital markets. Across Fitch's public ratings for U.S. equity REITs, IDRs range from 'BB-' to

'A+'. REITs would likely be considered less attractive stock investments if they utilized minimal levels ofleverage commensurate with higher rating levels, given the dividend yield and return expectations of equityinvestors. The long-term cash retention limitations placed on REITs may also limit the extent to whichequity they could achieve higher rating levels, as REITs consistently rely on access to the capital markets.


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The Washington Times

April 25, 2013 Thursday

What's the Big Idea: Expanding opportunities for renewable energy

BYLINE: By Nicolas Loris SPECIAL TO THE WASHINGTON TIMES

SECTION: A, POLITICS; Pg. 6

LENGTH: 649 words

It's always tough to get a new business off the ground. It has proved extraordinarily tough for renewableenergy companies, despite all the subsidies. Congress could help. It could allow renewable energycompanies to organize as Master Limited Partnerships (MLPs). Of course, that would require liberalizingcurrent legal requirements and qualifications forMLPs.

MLPs allow a company to organize in such a way that its shares are publicly traded (meaning expandedaccess to cheaper capital), but taxed only once. Income passes straight to the partnership's owners and istaxed according to the income tax, unlike other publicly traded companies that pay corporate taxes as wellas taxes on dividends and capital gains.

In the energy sector, mineral extraction, natural gas, oil, pipelines, geothermal and the transportation andstorage of ethanol, biodiesel and other alternative fuels all have the ability to form MLPs. But renewable

energy generation (such as wind and solar projects), as well as commercial nuclear activities, do notqualify.

A market-based alternative to government subsidies, MLPs offer a more sustainable way to encourageproduction and attract capital. Targeted production and investment tax credits for renewable energy creategovernment dependency on those handouts and remove incentives to innovate and lower costs.

What stands in the way of such common sense reform? It's simply a matter of changing the definition in thetax code of who qualifies forMLP designation. As the law stands, only companies that earn 90 percent ormore of their income from "passive" sources - rents, royalties, natural resource income - are allowed toform as MLPs. That's really rather arbitrary. All energy projects, from renewables to nuclear, should beable to form MLPs. Changing this definition should be something Democrats and Republicans can rallyaround.

But opening renewable companies to the free market should not stop there. Proponents of including

renewable energy in the definition for forming MLPs argue that we need to level the playing field and stoppicking winners and losers through the tax code.

However, many targeted tax credits for all energy sources exist beyond MLPs. In fact, the tax code hasbeen an increasingly popular method by which politicians and bureaucrats can favor one industry overanother. The number of targeted tax credits more than tripled from 1999 to 2007.

The wisest and simplest way to proceed is to remove all targeted tax credits and subsidies for all energysources. That should be accompanied with a broad lowering of the corporate tax rate. The net effect wouldbe a more market-based energy economy that keeps the government out of energy decisions and leaves


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Thursdaythem in the hands of American producers and consumers. It would be a boon to both - especially to newcompanies looking for investors to help them launch.

And here's another common sense reform: Make immediate expensing permanently available for all

business investments. Immediate expensing for all new plant and equipment costs - for any industry or typeof equipment - would let new equipment come online faster, which would improve energy efficiency andoverall economic efficiency.

Together, these three changes - liberalizing MLPs, removing targeted tax credits, and allowing allbusinesses to immediately expense their costs - would go a long way toward removing man-made barriersto get renewable energy companies off the ground and moving. The fewer unfair market barriers renewableenergy companies have to hop, the more access these companies have to healthy competition and Americanconsumers - the best, first, and final arbiters of market winners and losers.

Nicolas Loris is the Heritage Foundation's Herbert and Joyce Morgan Fellow. He and research associateKatie Tubb work on energy and environmental issues in Heritage's Roe Institute for Economic PolicyStudies.

LOAD-DATE: April 25, 2013

LANGUAGE: ENGLISH

PUBLICATION-TYPE:Newspaper

Copyright 2013 The Washington Times LLCAll Rights Reserved


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Page 33-Kayne Anderson MLP Investment sells USD 235m of notes Internet Business News April 18, 2013

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April 18, 2013 Thursday

-Kayne Anderson MLP Investment sells USD 235m of notes

LENGTH: 162 words

18 April 2013 -- Houston, USA-based closed-end management investment firm Kayne Anderson MLPInvestment company (NYSE: KYN) said it has executed a definitive agreement for the private placement ofUSD 235m of senior unsecured notes.

In conjunction with execution of this agreement, on April 16, 2013, the company received funding of USD110m of the USD 235m total offering amount.

The remaining USD 125m is expected to be funded in June 2013, Kayne Anderson said.

Kayne Anderson said that proceeds from the April Funding will be used to make new portfolio investmentsand to repay indebtedness, and proceeds from the June Funding will be used to refinance USD 125mprincipal amount of the Series K senior notes (which mature on June 19, 2013).

The company invests at least 85% of its total assets in energy-related master limited partnerships and theiraffiliates and in other companies in the oil and gas business.

Find out more at www.kaynefunds.com.

1 USD = 0.656011 GBP

LOAD-DATE: April 18, 2013

LANGUAGE: ENGLISH


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