- The temporary equity units have claims ahead of the common units.
- Anything with a superior claim to the common units should be treated similarly to debt when calculating financial ratios for common unit holders.
- There is a risk of Apache forcing the payment of enough cash from the midstream company to put the current dividend in danger.
- Cash flow is not sufficient to properly deal with the debt, the preferred, and the non-controlling interest.
- These risky shares are best avoided by income investors.
For further details see:
There Is A Lot Ahead Of Common Units At Altus Midstream