Recession reaches MLPs

MLPs are not immune to the effects of the economic slowdown. Kayne Anderson MLP Investment Company (KYN) announced its quarterly dividend for Q2 would be 48¢ per share, 2¢ below the prior quarter and stated that it expects its portfolio investments to generate sufficient cash and other investment income to sustain dividends in the range of 48¢ per share during fiscal year 2009. Some good news, they expect most of their dividends will be treated as "distributions" (tax free). If you don't want to click on the link below, I copied the reasoning behind the dividend cut:

"Our current dividend is two cents per share lower than the guidance provided in December 2008 as a result of reduced distributions received from our portfolio of MLPs," stated Kevin McCarthy, CEO of the Company. "In our previous guidance, we had anticipated that certain MLPs would reduce their distributions during 2009 in response to lower commodity prices and high debt levels. During the first quarter, the number of MLPs that cut distributions was larger than expected and the distribution cuts were greater than expected."

"As a result, we currently believe our portfolio investments will generate cash and other investment income sufficient to pay a quarterly dividend for the remainder of 2009 in the range of $0.48 per share. We believe that additional distribution cuts by our portfolio investments will be limited in 2009 as long as commodity prices remain at current levels. As commodity prices stabilize, economic growth resumes and capital markets re-open, we believe our portfolio investments will resume their pattern of steady distribution growth," stated Mr. McCarthy.

Their track record of dividends is :

PRICES

Date
2-Jan-09	$ 0.50 Dividend
31-Dec-08	$ 0.50 Dividend
1-Oct-08	$ 0.50 Dividend
2-Jul-08	$ 0.50 Dividend
1-Apr-08	$ 0.498 Dividend
2-Jan-08	$ 0.495 Dividend
1-Oct-07	$ 0.49 Dividend
2-Jul-07	$ 0.49 Dividend
2-Apr-07	$ 0.48 Dividend
3-Jan-07	$ 0.47 Dividend
2-Oct-06	$ 0.45 Dividend
3-Jul-06	$ 0.44 Dividend
3-Apr-06	$ 0.43 Dividend
3-Jan-06	$ 0.425 Dividend
3-Oct-05	$ 0.42 Dividend
1-Jul-05	$ 0.415 Dividend
1-Apr-05	$ 0.41 Dividend
3-Jan-05	$ 0.25 Dividend

MLPs are great investments with an excellent future, but they are mortal & are feeling the economic squeeze. KYN acknowledges MLP distribution cuts in Q1, there could be more going forward.


Kayne Anderson MLP Investment Company Announces Dividend of $0.48 per Share for Q1 2009 and Updates Dividend Guidance for Fiscal 2009