ClearBridge MLP and Midstream Fund Inc. Announces Unaudited Balance Sheet Information as of June 30, 2024

Rhea-AI Summary

ClearBridge MLP and Midstream Fund (NYSE: CEM) announced its unaudited balance sheet as of June 30, 2024. The Fund's net assets totaled $381 million, with a net asset value of $50.89 per share. The asset coverage ratio under the Investment Company Act of 1940 was 635% for senior indebtedness and 373% for total leverage. Key investments included Energy Transfer LP and ONEOK Inc., representing 11.8% and 9.5% of investments, respectively. The Fund repurchased 5,807,371 shares in a tender offer, about 44% of its outstanding shares.

Total assets stood at $542.1 million, comprising $493.2 million in investments and $47.3 million in cash. Total leverage amounted to $139.4 million, with senior notes, loans, and mandatory redeemable preferred shares contributing to this figure. The Fund's top ten equity holdings accounted for 74.2% of total equity investments. The financial data remains unaudited, and detailed reports are available on the SEC's website.

Positive

• Net assets total $381 million.
• Net asset value per share is $50.89.
• Asset coverage ratio for senior indebtedness is 635%.
• Asset coverage ratio for total leverage is 373%.
• Top ten equity holdings represent 74.2% of investments.
• Successful tender offer repurchased 5,807,371 shares, 44% of outstanding shares.

Negative

• Total leverage stands at $139.4 million.

Financial Analyst

The unaudited balance sheet information reveals several significant financial metrics for ClearBridge MLP and Midstream Fund Inc. Firstly, the net asset value (NAV) per share stands at $50.89.

The asset coverage ratio is a critical measure for investors interested in the fund's leverage. The asset coverage ratio under the Investment Company Act of 1940, with respect to senior indebtedness, is 635% and for total leverage, it is 373%. These high ratios indicate that the fund has a substantial buffer to cover its debt obligations, suggesting lower financial risk in terms of leverage.

The total assets of the fund amount to $542.1 million, with investments totaling $493.2 million and cash and cash equivalents at $47.3 million. This composition shows a strong liquidity position, which is beneficial for meeting short-term obligations and potential opportunities.

Furthermore, the fund's top ten equity holdings account for 74.2% of its total equity investments. Concentration in specific equities like Energy Transfer LP and ONEOK Inc. might increase exposure to sector-specific risks, but also allows for potential substantial returns if these companies perform well.

Overall, the financial health presented through these metrics seems robust. However, retail investors should consider the concentration risk and the implications of market changes in the energy sector.

Market Research Analyst

The financial metrics provided in this release should be observed in the context of market conditions and sector performance. The fund's significant holdings in midstream energy companies such as Energy Transfer LP and ONEOK Inc. suggest a strong bet on the energy sector's recovery and growth prospects. Given that midstream companies benefit from the transport and storage of energy products, their performance is relatively insulated from direct commodity price volatility compared to upstream producers.

The recent tender offer that led to the repurchase of 44% of the fund's outstanding shares is noteworthy. Such a large-scale repurchase can be seen as a vote of confidence from management or an attempt to return value to shareholders. However, it also reduces the number of shares in circulation, which can enhance the NAV per share depending on the buyback price relative to the NAV.

For a retail investor, understanding the implications of such a buyback is essential. While it may point to potential upside in NAV per share, it also means that current and new shareholders are now participating in a more concentrated fund, which might affect liquidity.

Investors should also keep an eye on sector-specific developments. Regulatory changes, shifts in energy policy and general economic health will all impact the performance of midstream assets. The fund's exposure to these factors means its NAV could be quite sensitive to macroeconomic conditions and sectoral shifts.

NEW YORK--(BUSINESS WIRE)-- ClearBridge MLP and Midstream Fund Inc. (NYSE: CEM) announced today the unaudited statement of assets and liabilities, the net asset value and asset coverage ratio of the Fund as of June 30, 2024.

As of June 30, 2024, the Fund’s net assets were $381.0 million, and its net asset value per share was $50.89. The Fund’s asset coverage ratio under the Investment Company Act of 1940 (the “1940 Act”) with respect to senior indebtedness was 635% and the Fund’s asset coverage ratio under the 1940 Act with respect to total leverage was 373%.

	As of June 30, 2024
	Amount (millions)			Per Share
Investments	$	493.2		$	65.88
Cash and Cash Equivalents		47.3			6.32
Other Assets		1.6			0.21
Total Assets	$	542.1		$	72.41
Senior Notes*	$	45.0		$	6.01
Loans Outstanding*		37.0			4.94
Mandatory Redeemable Preferred Shares*		57.4			7.67
Total Leverage	$	139.4		$	18.62
Income Tax Payable	$	9.1		$	1.22
Deferred Tax Liability		7.7			1.03
Other Liabilities		4.9			0.65
Total Liabilities	$	21.7		$	2.90
Net Assets	$	381.0		$	50.89
Outstanding Shares		7,486,824
* The Fund's asset coverage ratio under the 1940 Act with respect to senior indebtedness was 635%.
* The Fund's asset coverage ratio under the 1940 Act with respect to total leverage was 373%.
Top Ten Equity Holdings (as of June 30, 2024)**
	Market Value
Name	(millions)			% of Investments			***
Energy Transfer LP	$	58.3			11.8	%
ONEOK Inc.	$	47.1			9.5	%
MPLX LP	$	44.1			8.9	%
Western Midstream Partners LP	$	41.6			8.4	%
Targa Resources Corp.	$	37.5			7.6	%
Enterprise Products Partners LP	$	35.9			7.3	%
Williams Cos. Inc.	$	27.0			5.5	%
Plains All American Pipeline LP	$	25.5			5.2	%
Plains GP Holdings LP	$	25.4			5.2	%
Kinder Morgan Inc.	$	23.4			4.8	%
	$	365.8			74.2	%
** Subject to change at any time
*** Percent of Total Equity Investments

The Fund conducted a tender offer that expired on June 20, 2024. The tender offer resulted in the Fund repurchasing 5,807,371 shares, representing approximately 44% of the Fund’s outstanding shares.

ClearBridge MLP and Midstream Fund Inc. is a non-diversified, closed-end management investment company, which is advised by Franklin Templeton Fund Adviser, LLC (“FTFA”) (formerly known as Legg Mason Partners Fund Advisor, LLC) and subadvised by ClearBridge Investments, LLC (“ClearBridge”). FTFA and ClearBridge are indirect, wholly-owned subsidiaries of Franklin Resources, Inc. (“Franklin Resources”).

This financial data is unaudited.

The Fund files its semi-annual and annual reports with the Securities and Exchange Commission (“SEC”), as well as its complete schedule of portfolio holdings for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. These reports are available on the SEC’s website at www.sec.gov. To obtain information on Form N-PORT or a semi-annual or annual report from the Fund, shareholders can call 1-888-777-0102.

For more information about the Fund, please call 1-888-777-0102 or consult the Fund’s website at www.franklintempleton.com/investments/options/closed-end-funds. Hard copies of the Fund’s complete audited financial statements are available free of charge upon request.

Data and commentary provided in this press release are for informational purposes only. Franklin Resources and its affiliates do not engage in selling shares of the Fund.

Category: Financials

Source: Franklin Resources, Inc.

Source: Legg Mason Closed End Funds

View source version on businesswire.com: https://www.businesswire.com/news/home/20240708655018/en/

Investor Contact: Fund Investor Services 1-888-777-0102

Source: Franklin Resources, Inc. and Legg Mason Closed End Funds

FAQ

What is the net asset value of ClearBridge MLP and Midstream Fund (CEM) as of June 30, 2024?

The net asset value of ClearBridge MLP and Midstream Fund (CEM) as of June 30, 2024, is $50.89 per share.

What are the net assets of ClearBridge MLP and Midstream Fund (CEM) as of June 30, 2024?

As of June 30, 2024, the net assets of ClearBridge MLP and Midstream Fund (CEM) totaled $381 million.

What is the asset coverage ratio for senior indebtedness of ClearBridge MLP and Midstream Fund (CEM) as of June 30, 2024?

The asset coverage ratio for senior indebtedness of ClearBridge MLP and Midstream Fund (CEM) was 635% as of June 30, 2024.

What is the total leverage of ClearBridge MLP and Midstream Fund (CEM) as of June 30, 2024?

The total leverage of ClearBridge MLP and Midstream Fund (CEM) is $139.4 million as of June 30, 2024.

How many shares did ClearBridge MLP and Midstream Fund (CEM) repurchase in the tender offer?

ClearBridge MLP and Midstream Fund (CEM) repurchased 5,807,371 shares in the tender offer.

What percentage of investments do the top ten equity holdings of ClearBridge MLP and Midstream Fund (CEM) represent?

The top ten equity holdings represent 74.2% of total investments for ClearBridge MLP and Midstream Fund (CEM).