At the beginning of March I wrote an article on ethanol logistics MLP Green Plains Partners (GPP) in which I concluded that the potential for reduced future ethanol demand due to regulatory developments and the COVID-19 pandemic placed the MLP's distribution in a less secure position. Specifically, I was concerned that the Trump administration's recent efforts to weaken the U.S. biofuels blending mandate came at a time when the company's quarterly distribution coverage ratio had fallen below 1x.
The last 2 weeks have seen the market become aware of the demand risk posed