Tortoise Makes Distributions Announcements for its Closed-End Funds
May 07 2020 - 5:30PM
Business Wire
Following the quarterly review of the funds with management and
the Board of Directors, Tortoise is today announcing that each of
TYG, NTG and NDP are temporarily suspending quarterly distributions
through the end of the calendar year, TTP is reducing quarterly
distributions, and TEAF is reducing monthly distributions. In June,
TPZ will begin to declare distributions monthly and will continue
to pay declared distributions monthly. For more information, a
Q&A document is available here.
“The past couple of months have been unprecedented,” said CEO of
Tortoise’s closed-end funds, Brad Adams. “The significant impact on
energy demand from “stay at home” policies due to COVID-19, along
with actions by Saudi Arabia and Russia in early March to increase
oil supply, created an extremely difficult market environment for
the oil sector. We think it is in the best long-term interest of
the funds and their stockholders to temporarily suspend quarterly
distributions for TYG, NTG and NDP through the end of the calendar
year, and direct the distributable cash flow (“DCF”) of the funds
towards growing the net asset value. We know how important
distributions are to stockholders, and we plan to reinstate
distributions at what we believe will be sustainable levels when
there is a clearer view on the overall economy and energy demand
becomes more certain.”
TYG, NTG, and NDP currently estimate total DCF per share for the
next twelve months of approximately $2.10, $2.70 and $0.35,
respectively. NDP’s estimated DCF does not include any option
income over the period. These estimates are for information
purposes only, and can change materially depending on a number of
factors. The Board of Directors will review DCF on a monthly basis,
and more frequently as conditions warrant.
Tortoise has also determined it prudent to reduce the quarterly
distribution for TTP to $0.16, and the monthly distributions for
TEAF to $0.075. In June, TPZ will begin to declare and pay
distributions on a monthly basis. Currently, management expects the
TPZ monthly distributions to be reduced to $0.05. Although the
market volatility and drawdown was less impactful to these funds,
TTP and TPZ reduced their leverage utilization, and they each
experienced distribution reductions from portfolio companies during
the quarter.
The TTP quarterly distribution is payable on May 29, 2020 to
stockholders of record on May 22, 2020. The TEAF monthly
distributions are payable on June 30, 2020, July 31, 2020 and
August 31, 2020 to stockholders of record on the respective dates
of June 23, 2020, July 24, 2020 and August 24, 2020. TPZ and TEAF
have previously declared distributions of $0.125 per share and
$0.1085 per share, respectively, payable on May 29, 2020.
For book purposes, the source of distributions for TEAF is
estimated to be approximately 80-90% ordinary income, with the
remainder as return of capital. For tax purposes, the
characterization will not be made until determination of earnings
and profits after year end.
You should not draw any conclusions about TTP’s investment
performance from the amount of these distributions or from the
terms of TTP’s distribution policy.
TTP estimates that it has distributed more than its income and
net realized capital gains; therefore, a portion of the
distribution may be return of capital. A return of capital may
occur, for example, when some or all of the money that you invested
in TTP is paid back to you. A return of capital distribution does
not necessarily reflect TTP’s investment performance and should not
be confused with “yield” or “income.”
TTP will report the sources for its distribution at the time of
the payment in the Section 19(a) Notice. The amounts and sources of
distributions TTP reports are only estimates and are not being
provided for tax reporting purposes. The actual amounts and sources
of the amounts for tax reporting purposes will depend upon TTP’s
investment experience during the remainder of its fiscal year and
may be subject to changes based on tax regulations. TTP will send
you a Form 1099-DIV for the calendar year that will tell you how to
report these distributions for federal income tax purposes.
About Tortoise
Tortoise invests in essential assets – those assets and services
that are indispensable to the economy and society. With a steady
wins approach and a long-term perspective, Tortoise strives to make
a positive impact on clients and communities. For additional
information, please visit tortoiseadvisors.com
Safe Harbor Statement
This press release shall not constitute an offer to sell or a
solicitation to buy, nor shall there be any sale of these
securities in any state or jurisdiction in which such offer or
solicitation or sale would be unlawful prior to registration or
qualification under the laws of such state or jurisdiction.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains certain statements that may include
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements, other than statements of
historical fact, included herein are "forward-looking statements."
Although the funds and Tortoise Capital Advisors believe that the
expectations reflected in these forward-looking statements are
reasonable, they do involve assumptions, risks and uncertainties,
and these expectations may prove to be incorrect. Actual results
could differ materially from those anticipated in these
forward-looking statements as a result of a variety of factors,
including those discussed in the fund’s reports that are filed with
the Securities and Exchange Commission. You should not place undue
reliance on these forward-looking statements, which speak only as
of the date of this press release. Other than as required by law,
the funds and Tortoise Capital Advisors do not assume a duty to
update this forward-looking statement.
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version on businesswire.com: https://www.businesswire.com/news/home/20200507006171/en/
Maggie Zastrow, (913) 981-1020 info@tortoiseadvisors.com
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