Salient Midstream & MLP Fund Announces First Quarter 2016 Dividend Of $0.325 Per Share And Net Asset Value As Of January 29, 2016

Feb 03, 2016, 17:55 ET from Salient Midstream & MLP Fund

HOUSTON, Feb. 3, 2016 /PRNewswire/ -- Salient Midstream & MLP Fund (the "Fund") (NYSE: SMM) today announced a dividend of $0.325 for the first quarter ending February 29, 2016.

At the close of business on January 29, 2016, the Fund's total consolidated assets were $233.4 million and the NAV per share was $9.08. On January 29, 2016, the closing share price of the Fund was $8.35, which was trading at a 8.04% discount to the NAV.1 For the month ending January 29, 2016, the Fund's NAV and market price total returns were -17.0% and -12.4%, respectively, and the Fund's yield was 17.7%.2

In light of the challenging conditions in the energy capital markets, the Fund has elected to reduce the quarterly distribution from $0.369 per share to $0.325 per share, a reduction of $0.044 per share. We have seen a consistent message in fourth quarter MLP earnings announcements: MLP management teams are placing more of an emphasis on building distribution coverage ratios rather than growing distributions. While we do not believe any of the names in our portfolio will cut distributions over the next 12 months, we expect distribution growth to slow considerably. The Fund's net distributable cash flow has decreased over the past few months, due primarily to the effects of significant MLP market declines, which have required the Fund to sell portfolio investments to maintain target leverage in the Fund. We believe the Fund's new dividend is sustainable and is positioned to grow over time as the market recovers.

In January, the Fund also sold its remaining assets held within the wholly-owned C Corporation, Salient Midstream & MLP Fund, Inc. (C Corp) and intends to fully dissolve the C Corp by the end of the current fiscal quarter. The proceeds from the dissolution of the C Corp were used to invest in higher yielding midstream energy securities in the Fund. As noted in the Top 10 holdings table below, currently the Fund's second largest holding is the private investment in EMG Utica I Offshore Co-Investment, L.P. Thus far, the valuation of this private investment has not been impacted as much as the public equity markets and has appreciated in value since the initial investment. The increase is due to its asset exposure in Utica shale, which continues to generate robust volume growth. The drawback to the investment is that it does not pay a yield. However, once the asset is monetized, the cash proceeds will be redeployed in yield-paying midstream securities which should help support future dividend growth within the Fund.

The Fund's first quarter dividend will be payable on February 29, 2016 to common stockholders of record on February 19, 2016. It is anticipated that this dividend will be a combination of return of capital and ordinary income for tax purposes. The final tax status of the dividend may differ substantially from this preliminary information, and the final determination of such amount will be made in early 2017 when the Fund can determine its earnings and profits for the 2016 fiscal year.

The Fund's quarterly dividends per share over the past year are shown below:3






February 29, 2016

February 17, 2016

February 19, 2016


November 30, 2015

November 16, 2015

November 18, 2015


August 28, 2015

August 17, 2015

August 19, 2015


May 29, 2015

May 19, 2015

May 21, 2015


February 27, 2015

February 17, 2015

February 19, 2015

Past performance is not indicative of future results.

The Fund distributions are comprised of distributable cash flow generated from its portfolio investments plus any realized capital gains. The tax characteristics of the historical distributions can be found on

The Fund's investment allocation as of January 29, 2016 is shown in the pie chart below:

The Fund's Top 10 consolidated holdings as of January 29, 2016 are shown below:4

Company Name


Percent of Consolidated Gross Assets

The Williams Companies, Inc.

General Partner


EMG Utica I Offshore Co-Investment, L.P.

MLP Affiliate



General Partner


Enbridge Energy Management, LLC

MLP Affiliate


Plains GP Holdings, L.P.

General Partner


Targa Resources Corp.

General Partner


Macquarie Infrastructure Company LLC

Other Energy & Infrastructure


NGL Energy Partners LP



Energy Transfer Partners, L.P.



Capital Product Partners, L.P.

Midstream Company


Total                                                                                                                                                 61.8%

For illustrative purposes only. Current and future holdings are subject to change and risk. Source: Salient Capital Advisors, LLC, January 29, 2016.

The Fund's consolidated unaudited balance sheet as of January 29, 2016 is shown below:

Salient Midstream & MLP Fund

Consolidated Balance Sheet

January 29, 2016



(in millions)



Receivable for Investments Sold


Other Assets


Cash and Cash Equivalents


Total Assets



Line of Credit Payable


Payable for Investments Purchased


Deferred Tax Liability


Other Liabilities


Total Liabilities


Net Assets


The Fund had 17.7 million common shares outstanding as of January 29, 2016.

Past performance is not indicative of future results.

Salient Midstream & MLP Fund is a Delaware statutory trust registered as a non-diversified, closed-end management investment company under the Investment Company Act of 1940, as amended. The Fund's investment objective is to provide a high level of total return with an emphasis on making quarterly cash distributions to its common shareholders. The Fund seeks to achieve that objective by investing at least 80% of its total assets in securities of MLPs and midstream companies. There can be no assurance that the Fund will achieve its investment objective.

This press release contains "forward-looking statements" as defined under the U.S. federal securities laws. Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "project," "will," and similar expressions identify forward-looking statements, which generally are not historical in nature. Forward-looking statements are subject to certain risks and uncertainties that could cause actual future results to differ significantly from the Fund's present expectations or projections indicated in any forward-looking statements. These risks include, but are not limited to, changes in economic and political conditions; regulatory and legal changes; leverage risk; valuation risk; interest rate risk; tax risk; the volume of sales and purchase of shares; the continuation of investment advisory, administration and other service arrangements; and other risks discussed in the Fund's filings with the Securities and Exchange Commission. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. The Fund undertakes no obligation to publicly update or revise any forward-looking statements made herein. There is no assurance that the Fund's investment objective will be attained.

About Salient Salient Partners, L.P. ("Salient") is a diversified asset management firm and leading provider of alternative and real asset investment strategies for institutional investors and investment advisors. The firm offers a comprehensive suite of single-asset and multi-asset solutions designed to serve as powerful building blocks for smarter, more efficient portfolios. Strategies are offered in the form of open- and closed-end funds and separately managed accounts. Salient provides unconventional market insights in its highly acclaimed Epsilon Theory newsletter and FWD Thinking blog. Learn more about Salient at and follow us on LinkedIn and Twitter. Salient was founded in 2002 and has offices in Houston, San Francisco, New York and Newport Beach.


Salient Capital Advisors, LLC 800-994-0755


Catherine P. Jones Polisi Jones Communications 917-330-8934

1 Past performance is not indicative of future results. Current performance may be higher or lower than the data shown. The data shown are unaudited. Returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares. 2 Source: Salient Capital Advisors, LLC. The rate is annualized based on the latest dividend paid by the Fund divided by the January 29, 2016 stock price. Past performance is not indicative of future results. 3 The amount of dividends may vary depending on a number of factors. As portfolio and market conditions change, the rate of distributions on Fund common shares could change. A portion of the Fund's returns may be comprised of ordinary income, return of capital and net realized capital gains. The Fund will determine the tax characteristics of all Fund dividends after the end of the calendar year and will provide shareholders such information at that time. 4 Fund shares do not represent a deposit or obligation of, and are not guaranteed or endorsed by, any bank or other insured depository institution, and are not federally insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency. Data are based on total market value of Fund investments unless otherwise indicated. The data provided are for informational purposes only and are not intended for trading purposes.

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