Vaya, me alegra ver que hay cualificados que consideran que TGP nunca más volverá a aumentar el dividendo a los niveles que tuvo hasta 2016.
Dudo mucho que pase de 0,45$/quarter
Moody's ; Liquidity boost from increased cash distributions to Teekay is credit
positive
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On 16 April, Teekay Corporation said it expects higher cash distributions from one of its two subsidiaries, Teekay LNG
Partners L.P. (TGP), a credit positive. The distributions are set to increase by 32%, effective as of the first quarter of 2020. However,
there is no effect on the company’s ratings at this time, including the B2 rating on the senior secured notes. Positive progress towards
restoring needed cash distributions from subsidiaries, albeit unlikely to return to prior historical levels The development is credit
positive because it strengthens Teekay’s liquidity profile. Teekay relies on its subsidiaries to upstream cash to support its financial
obligations, given its small standalone operating asset pool of three floating, production, storage and offloading (FPSO) units.
Progress towards restoring needed cash distributions from subsidiaries, but it is unlikely to return to historical levels. The
development is credit positive because it strengthens Teekay’s liquidity profile. Teekay relies on its subsidiaries to upstream cash to
support its financial obligations, given its small standalone operating asset pool of three floating, production, storage and offloading
(FPSO) units. The upstream cash from TGP will increase to about $27 million from $20.4 million, making this TGP’s second consecutive
year of raising its distributions to Teekay. This is the result of TGP’s improving cash flow profile as its newbuild deliveries (on long term
contracts) have come on line. However, the distributions remain substantially lower than Teekay received historically, including over
$100 million from TGP. These cash sums, while not contractually mandated, are a key credit consideration and unlikely to be restored
to historical levels in the near term.
Higher cash distribution follows recent FPSO contract renewals that will improve Teekay's cash flow stability. We expect
Teekay to have adequate liquidity to support its standalone debt obligations and G&A expenses into 2021. The liquidity profile benefits
from the improved revenue visibility of Teekay’s standalone cash flows following recent renewals of its FPSO contracts. The Foinaven
FPSO is on a new contract of up to 10 years that included an upfront cash payment of $67 million. The upfront cash was partly used
to replenish cash applied to repaying the company’s remaining (stub) portion of its January 2020 bond maturity of $37 million. Teekay
also previously extended its Hummingbird FPSO contract for 3.5 years to March 2023 and revised the payment terms to a fixed price
structure. These factors, along with TGP’s distributions, $123 million of cash on hand and $54 million of revolver availability should
provide adequate coverage of Teekay’s standalone financial obligations through at least 2020. The revolver availability nonetheless
fluctuates with equity market values of the subsidiaries.
The new FPSO contracts provide more cash flow stability than previous contracts that had more cash flow volatility, structured with
a fixed rate and variable bonus/tariffs tied to production volumes and oil prices. The FPSOs are nonetheless vulnerable to unplanned
maintenance and other shutdowns, including the temporary shutdown of one FPSO in April 2020 related to the coronavirus.
Long-term contracts support prospects for cash flow and upstreaming to Teekay. Teekay’s underlying LNG contracts should
continue to support its ability to de-lever on a consolidated basis, with total debt-to-EBITDA estimated in the high 5x range (including
our adjustments) through 2021. TGP is benefiting from deliveries of LNG newbuilds that have started generating cash flow under long
term contracts averaging about 10 to 12 years. This is evidenced by TGP’s and Teekay’s return to consolidated positive annual free cash
flow after a negative four-year period. The contracts partly mitigate looming demand pressures in Teekay’s underlying conventional
tanker markets, operated through Teekay Tankers, Ltd. (TNK, unrated). TNK is likely to face weakening global demand for tankers in
the coming months amid a growing oil glut, the coronavirus outbreak and deteriorating macro conditions. However, the company
is benefiting from the recent OPEC-related global oil price dislocation that drove up tanker demand, amid more measured capacity
growth and floating storage, and tanker pricing conditions. This, along with TNK’s improved liquidity and operating performance over
the past year, as a result of stronger tanker market fundamentals, should help cushion against the downside risk for tanker demand in
the near term.
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