Energy Transfer Partners - Preferred

[ValueMaven]

ETP-PD and ETP-PC are two MLP preferreds which are getting serious whacked right now.  These are $25 pars - trading in the low-$12 range.

 

What are the pros and cons of MLP Preferreds?  Do they issue K1s? 

 

ETP's equity is down about 20% right now - but does have a $25B market cap and is lead by Kelcy Warren - who is well known in the MLP space.  These might be interesting 'defensive' preferred securities trading 50% of par

 

ValueMaven

[BG2008]

Kelcy Warren is known for screwing minority and you should read the preferred documents very closely.  If he can get away with it, he will.

[NoCalledStrikes]

Preferred Units issue K-1s.  The boxes are filled out a little different than regular MLP units as all the income effectively gets reported as interest and there is no depreciation, but its still a K-1. But the killer for me is that you still have multi-state tax filings to deal with depending on how much you invest in the preferred and how much you worry about getting a letter from out of state 5 years from now asking about a filing penalty.