BreitBurn Energy Partners (BBEP) PT Slashed to $0.10 at UBS; Few Options

UBS analyst Shneur Gershuni reiterated a Sell rating and slashed his price target on BreitBurn Energy Partners (NASDAQ: BBEP) to $0.10 (from $0.50) after the company suspended the declaration of distribution on its series A and B perpetual preferred units. It also deferred the interest payments of roughly $33.5MM on its notes maturing in April 2022 and roughly $13.2MM on its notes maturing in October 2020. Post interest payment date (04/14/2016), BBEP has a 30-day grace period until an event of default occurs.

Gershuni commented, "BBEP said it has been exploring strategic alternative to improve the balance sheet through the aforementioned grace period. We estimate BBEP's current leverage is 4.7x and we expect it will increase to 5.5x by the year end. BBEP has few options to lower its current leverage, including non-core asset sale, cost reduction, derivative contract restructuring or debt exchange. In 2015 10K, BBEP discussed that there is a risk that the borrowing base on its credit facility could be reduced on next redetermination in April or October."

For an analyst ratings summary and ratings history on BreitBurn Energy Partners click here. For more ratings news on BreitBurn Energy Partners click here.

Shares of BreitBurn Energy Partners closed at $0.32 yesterday.

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