DKL - Delek Logistics Partners: Another Distribution Increase But Still Risky

• Once again, Delek Logistics Partners stands out in the midstream industry for increasing their distributions.
• Normally, this would indicate that they are safe and sustainable, but this is not yet necessarily the case.
• Whilst their distribution coverage may finally be improving, it is still too early to know for sure, given their recent IDR transaction.
• Their leverage remains high, and more importantly, their liquidity is barely adequate, and thus, these keep their distributions risky for the time being.
• Given this situation, I still believe that a neutral rating is appropriate.

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