Kayne Anderson MLP / Midstream Investment Company
Overview
Objective
KYN is a non-diversified, closed-end fund with an investment objective to obtain a high after-tax total return for its shareholders by investing at least 85% of our total assets in energy-related master limited partnerships and their affiliates (“MLPs”) and in other companies that operate assets used in the gathering, transporting, processing, storing, refining, distributing, mining or marketing of natural gas, natural gas liquids, crude oil, refined petroleum products or coal (collectively with MLPs, “Midstream Energy Companies”).
Investment Merits
Midstream Opportunities
- Opportunity to invest across the full value chain for the midstream sector through investments in midstream MLPs and midstream companies
- Development of “unconventional reserves” is changing the North American energy industry, driving the need for new midstream assets and creating growth opportunities for the midstream sector
- Midstream sector is expected to generate attractive risk adjusted returns for investors; companies are expected to generate stable cash flows from fee based assets with high barriers to entry
Attractive Fund Structure
- KYN issues a Form 1099 (as opposed to K-1s issued by MLPs)
- Suitable for IRAs, foundations and tax-exempt accounts, because unlike direct holdings in MLPs, KYN does not generate unrelated business taxable income (UBTI)
Access to Private Investments
- KYN provides access to private investment opportunities not otherwise available to retail investors
Daily Pricing
† As of 4/30/19
1 Payable on 5/31/19 (ex-date 5/15/19). (See “Distributions” section below for more information).
Performance
Share Price and NAV History
Premium/Discount to NAV
Performance data quoted represents past performance and are for the stated time period only. Past performance is not a guarantee of future results. Current performance may be lower or higher than that shown based on market fluctuations from the end of the reported period.
Total Return (NAV plus distributions)
Period Returns (Not Annualized)
Calendar Year Returns
2 Assumes that distributions have been reinvested through the Dividend Reinvestment Program (DRIP).
Growth of Hypothetical $10,000 Investment3
3 This chart illustrates the growth of a hypothetical $10,000 investment in the fund’s common shares beginning on the inception date with all distributions reinvested through the Dividend Reinvestment Program (DRIP). Ending values as of the dates shown in the chart. Performance reflects the deduction of management fees and expenses but does not reflect transaction fees or broker commissions. Past performance is no guarantee of future results.
Portfolio
Portfolio (%)
Top 10 Holdings
Portfolio holdings are subject to change without notice. The mention of specific securities is not a recommendation or solicitation for any person to buy, sell or hold any particular security. You can obtain a complete listing of holdings by viewing our quarterly or annual report for the most recent completed period.
Distributions
Annual Distributions per Fiscal Year
* Based on year-to-date distributions paid or declared.
Tax Character of Distributions
Our distributions are treated as a taxable dividend (qualified dividends) to our common stockholders to the extent of our current and accumulated earnings and profits. If the distribution exceeds our current or accumulated earnings and profits, the distribution will be treated as a return of capital to our common stockholders to the extent of each stockholder’s basis in our common stock, and then the amount of a distribution in excess of such stockholder’s basis would be taxed as capital gain. Because the cash distributions received from the MLPs in our portfolio are expected to exceed the earnings and profits associated with owning such MLPs, a portion of our distributions may be paid from sources other than our current and accumulated earnings and profits. Common stockholders will receive a Form 1099-DIV from us, sample forms for each year can be found within the Tax Information section of this page.
The table below summarizes the tax character of our distributions for the past ten years.
Information on Tax Character of Distributions
4 This estimate is based on our anticipated earnings and profits for fiscal 2019. The final determination of the tax character of distributions will be made in early 2020 when we can determine our actual earnings and profits for the year (including gains and losses on sales of securities during fiscal 2019) and may differ substantially from this preliminary information.
The fund pays regular monthly cash distributions to common stockholders at a level rate that may be adjusted from time to time based on the projected income of the fund. The amount of monthly distributions is not guaranteed and may vary depending on a number of factors, including changes in portfolio holdings and market conditions.
Leverage
KYN uses leverage in the form of unsecured notes, preferred stock and revolving bank credit facilities to acquire additional portfolio investments consistent with its investment objective and strategies. Under normal conditions, our policy is to utilize leverage in an amount that represents approximately 25% to 30% of the fund’s total assets.
Leverage Summary
5 KYN will pay a fixed interest rate of 3.06% on $30 million of the Term Loan.
Recent Ratings
Balance Sheet
- Balance Sheet as of April 30, 2019 (Unaudited) - See press release
- Balance Sheet as of March 31, 2019 (Unaudited) - See press release
- Balance Sheet as of February 28, 2019 (Unaudited) - See press release
- Balance Sheet as of January 31, 2019 (Unaudited) - See press release
- Balance Sheet as of December 31, 2018 (Unaudited) - See press release
- Balance Sheet as of November 30, 2018 (Unaudited) - See press release
- Balance Sheet as of October 31, 2018 (Unaudited) - See press release
- Balance Sheet as of September 30, 2018 (Unaudited) - See press release
- Balance Sheet as of August 31, 2018 (Unaudited) - See press release
Resources
- Other Material Documents
- Dividend Reinvestment Plan
- Expense Ratios
Credit Facility
- Second amendment to the 2018 agreement dated February 8, 2019
- Amended and restated credit agreement dated February 15, 2018
Term Loan Facilities
Senior Notes
- $175 million Series X to CC Senior Notes Purchase Agreement dated May 3, 2012
- $235 million Series DD to GG Senior Notes Purchase Agreement dated April 16, 2013
- $140 million Series II to KK Notes Purchase Agreement dated April 30, 2014
- $200 million Series LL to OO Notes Purchase Agreement dated October 29, 2014
Mandatory Redeemable Preferred Shares (MRPS)
- $50 million Series B and C MRPS Securities Purchase Agreement dated November 9, 2010
- Series B and C MRPS Articles Supplementary
- Series F MRPS Articles Supplementary
- $50 million Series H MRPS Securities Purchase Agreement dated April 30, 2014
- Series H MRPS Article Supplementary
- $25 million Series I MRPS Securities Purchase Agreement dated October 29, 2014
- Series I MRPS Articles Supplementary
- $50 million Series J MRPS Securities Purchase Agreement dated September 7, 2016
- Series J MRPS Articles Supplementary
- $25 million Series K MRPS Securities Purchase Agreement dated April 10, 2015
- Series K MRPS Articles Supplemenetary
DRIP
SEC Filings
- Quarterly and Annual Reports
- Prospectuses
- Proxy Statements
- 02/28/2019 KYN Q1 2019 Quarterly Report
- 11/30/2018 KYN 2018 Annual Report
- 08/31/2018 KYN Q3 Quarterly Report
- 05/31/2018 KYN 2018 Semi-Annual Report
- 02/28/2018 KYN Q1 2018 Quarterly Report
- 11/30/2017 KYN 2017 Annual Report
- 08/31/2017 KYN Q3 2017 Quarterly Report
- 05/31/2017 KYN 2017 Semi-Annual Report
- 02/28/2017 KYN Q1 2017 Quarterly Report
- 11/30/2016 KYN 2016 Annual Report
- 08/31/2016 KYN Q3 2016 Quarterly Report
- 05/31/2016 KYN 2016 Semi-Annual Report
- 02/29/2016 KYN Q1 2016 Quarterly Report
Tax Information
- Sample Forms 1099-DIV (Common)
- Form 8937
- Sample Forms 1099-DIV (Preferred)
- KYN 2018 Form 1099-DIV
- KYN 2017 Form 1099-DIV
- KYN 2016 Form 1099-DIV
- KYN 2015 Form 1099-DIV
- KYN 2014 Form 1099-DIV
- KYN 2013 Form 1099-DIV
- KYN 2012 Form 1099-DIV
- KYN 2011 Form 1099-DIV
- KYN 2010 Form 1099-DIV
- KYN 2009 Form 1099-DIV
- KYN 2008 Form 1099-DIV
- KYN 2007 Form 1099-DIV
- KYN 2006 Form 1099-DIV
- KYN 2005 Form 1099-DIV
- KYN 2018 Form 1099-DIV (Series F Preferred)
- KYN 2017 Form 1099-DIV (Series F Preferred)
- KYN 2016 Form 1099-DIV (Series E Preferred)
- KYN 2016 Form 1099-DIV (Series F Preferred)
- KYN 2016 Form 1099-DIV (Series G Preferred)
- KYN 2015 Form 1099-DIV (Series E Preferred)
- KYN 2015 Form 1099-DIV (Series F Preferred)
- KYN 2015 Form 1099-DIV (Series G Preferred)
- KYN 2014 Form 1099-DIV (Series E Preferred)
- KYN 2014 Form 1099-DIV (Series F Preferred)
- KYN 2014 Form 1099-DIV (Series E Preferred)
- KYN 2013 Form 1099-DIV (Series D Preferred)
- KYN 2013 Form 1099-DIV (Series E Preferred)
- KYN 2013 Form 1099-DIV (Series F Preferred)
- KYN 2013 Form 1099-DIV (Series G Preferred)
- KYN 2012 Form 1099-DIV (Series D Preferred)
- KYN 2012 Form 1099-DIV (Series E Preferred)
- KYN 2011 Form 1099-DIV (Series D Preferred)
Goverance
Independent Directors
- William R. Cordes, Director
- Anne K. Costin, Director
- Barry R. Pearl, Director
- Albert L. Richey, Director
- William H. Shea Jr., Director
- William L. Thacker, Director
Interested Directors
- Kevin S. McCarthy, Chairman, Chief Executive Officer
- Jim Baker, Director, President
Governance Documents
Code of Ethics
Voting Policies and Procedures
Charters
This material is provided for informational purposes only. This material shall not constitute an offer to sell or a solicitation to buy, nor shall there be any sale of any securities in any jurisdiction in which such offer or sale is not permitted. Performance data quoted represent past performance and are for the stated time period only, Past performance is not a guarantee of future results. Current performance may be lower or higher than that shown based on market fluctuations from the end of the reported period.
Closed-end funds, unlike open-end funds, are not continuously offered. After the initial public offering, shares are sold on the open market through a stock exchange. As with any other stock, total return and market value will fluctuate so that an investment, when sold, may be worth more or less than its original cost. Shares of closed-end funds frequently trade at a market price that is below their net asset value.
All investments involve risk, including possible loss of principal. An investment in the fund could suffer loss. The fund’s concentration of investments in energy-related MLPs and midstream entities subjects it to the risks of MLPs, midstream entities and the energy sector, including the risks of declines in energy and commodity prices, decreases in energy demand, adverse weather conditions, natural or other disasters, changes in government regulation, and changes in tax laws. Leverage creates risks which may adversely affect return, including the likelihood of greater volatility of net asset value and market price of common shares and fluctuations in dividend rates on any preferred shares, and increases a shareholder’s risk of loss. Before investing in the fund, you should consider the investment objective, risks, charges and expenses of the fund, which, together with other important information, are included in the fund’s most recent prospectus and other filings with the SEC, available here or at http://www.sec.gov. There can be no assurance that the fund’s investment objective will be attained.
Nothing contained in this communication is intended to recommend any investment policy or investment strategy or take into account the specific objectives or circumstances of any investor. Please consult with your investment, tax or legal adviser regarding your individual circumstances prior to investing.
NOT FDIC INSURED | NOT BANK GUARANTEED | MAY LOSE VALUE