USAC - USA Compression: Management On The Clock

• The covenant relief period is set to expire, and with it liquidity that the partnership counts on will dry up.
• Management has to ask for new waivers or refinance the facility. That's a tougher sell now given the business has seen no improvement since the bottom.
• Management and investors initially anticipated a quick recovery in utilization rates, but there are no signs of that yet. 2021 expectations have been consistently cut.
• Setting aside potential tax implications, a wait and see approach makes more sense here. Plenty of better value in midstream.

For further details see: