XOG - NGL Energy Partners: Preferred Looking Highly Overvalued

• Post suspension of the common and preferred distributions, NGL Energy Partners preferreds have substantially outperformed the common oddly enough.
• No real reason for that in my opinion, particularly given there has not been much positive news flow for its operating base.
• With no pathway to the preferreds being paid until 2024 - and bumping up against another refinance - I'd argue pretty good odds on a highly-incentivized preferred-for-common swap.
• Some of the shorter-dated bond maturities look money good, and if you really are bullish, the common makes for a fair gamble even if I disagree. But the preferreds look like mostly downside with limited upside under the average outcome.

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