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

Rhea-AI Summary

ClearBridge MLP and Midstream Total Return Fund (NYSE: CTR) released its unaudited balance sheet as of June 30, 2024. Net assets stood at $157.2 million, with a net asset value (NAV) per share of $45.65. The asset coverage ratio for senior indebtedness was 439%, and for total leverage, it was 359%. Key investments included $222.9 million in assets, with top holdings such as Energy Transfer LP and Targa Resources Corp.

Fund liabilities totaled $10.8 million, including $4.6 million in income tax payable. The Fund conducted a tender offer repurchasing 50% of its outstanding shares. Key financial data and detailed asset coverage ratios were provided, reflecting the Fund’s financial health and strategic adjustments.

Positive

• Net assets at $157.2 million indicate a strong financial position.
• Net asset value (NAV) per share is $45.65, providing a clear valuation.
• Asset coverage ratio for senior indebtedness at 439% shows robust debt management.
• Asset coverage ratio for total leverage at 359% signifies controlled use of leverage.

Negative

• Income tax payable of $4.6 million could impact net earnings.
• Deferred tax liability at $3.5 million suggests future tax obligations.
• Repurchasing 50% of outstanding shares could imply potential liquidity issues or strategic restructuring.

Insights

Financial Analyst

ClearBridge MLP and Midstream Total Return Fund Inc.'s recent financial disclosure provides key insights into the Fund’s financial health and performance. The net assets of $157.2 million and a net asset value (NAV) per share of $45.65 present a critical snapshot for investors. The asset coverage ratios of 439% for senior indebtedness and 359% for total leverage indicate a robust ability to meet debt obligations, which is a positive indicator of financial stability.

The detailed breakdown of investments and liabilities offers transparency. Investments worth $222.9 million versus total leverage of $60.6 million show a conservative leverage approach. This conservative leverage is underlined by the high asset coverage ratios, suggesting a sound risk management strategy.

However, one should note the tax liabilities: $4.6 million in income tax payable and $3.5 million in deferred tax liabilities. This may affect future cash flows. Short-term, the Fund shows strong financial health, but investors should monitor how these tax liabilities might influence long-term returns.

The tender offer resulting in the repurchase of 50% of outstanding shares is noteworthy. This repurchase can be interpreted as a vote of confidence from management, as it signals they believe the shares are undervalued.

In conclusion, with a solid asset base and prudent leverage, the Fund appears well-positioned for stability, though attention should be paid to tax liabilities and their management.

Market Research Analyst

The Fund's top ten equity holdings provide essential insights into its investment strategy. With 70.9% of investments in a few key companies, the Fund is highly concentrated within the midstream energy sector. This concentration can offer significant upside when the sector performs well but also exposes the Fund to sector-specific risks.

Prominent holdings such as Energy Transfer LP and Targa Resources Corp suggest a strong focus on well-established midstream operators. These firms typically benefit from stable, fee-based revenue, which can provide resilience in volatile markets. However, the potential regulatory changes or shifts in energy demand could substantially impact these investments.

Retail investors should be aware of the sector-specific risks inherent in such a concentrated portfolio. Diversification, while not always a priority for closed-end funds, can mitigate risks associated with sector downturns. Additionally, the repurchase of 50% of the Fund’s shares through the tender offer may impact liquidity and share price volatility in the short term.

Understanding the implications of the Fund's concentrated sector bet is crucial. Long-term investors must assess their risk tolerance and consider how sector performance aligns with their investment strategy.

NEW YORK--(BUSINESS WIRE)-- ClearBridge MLP and Midstream Total Return Fund Inc. (NYSE: CTR) 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 $157.2 million, and its net asset value per share was $45.65. The Fund’s asset coverage ratio under the Investment Company Act of 1940 (the “1940 Act”) with respect to senior indebtedness was 439% and the Fund’s asset coverage ratio under the 1940 Act with respect to total leverage was 359%.

		As of June 30, 2024
		Amount (millions)			Per Share
Investments		$	222.9		$	64.73
Cash and Cash Equivalents			5.0			1.45
Other Assets			0.7			0.20
Total Assets		$	228.6		$	66.38
Senior Notes*		$	15.6		$	4.53
Loans Outstanding*			34.0			9.87
Mandatory Redeemable Preferred Shares*			11.0			3.19
Total Leverage		$	60.6		$	17.59
Income Tax Payable		$	4.6		$	1.34
Deferred Tax Liability			3.5			1.02
Other Liabilities			2.7			0.78
Total Liabilities		$	10.8		$	3.14
Net Assets		$	157.2		$	45.65
Outstanding Shares			3,443,417

* The Fund's asset coverage ratio under the 1940 Act with respect to senior indebtedness was 439%.

* The Fund's asset coverage ratio under the 1940 Act with respect to total leverage was 359%.

Top Ten Equity Holdings (as of June 30, 2024)**
		Market Value
Name		(millions)			% of Investments		***
Energy Transfer LP		$	24.5		11.0	%
Targa Resources Corp		$	21.0		9.4	%
ONEOK Inc.		$	19.0		8.5	%
Western Midstream Partners LP		$	17.5		7.9	%
MPLX LP		$	16.5		7.4	%
Enterprise Products Partners LP		$	14.0		6.3	%
Williams Cos. Inc.		$	13.2		5.9	%
Plains All American Pipeline LP		$	11.1		5.0	%
Enbridge Inc.		$	10.6		4.8	%
Plains GP Holdings LP		$	10.5		4.7	%
		$	157.9		70.9	%

** 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 3,443,416 shares, representing 50% of the Fund’s outstanding shares.

ClearBridge MLP and Midstream Total Return 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/20240708949506/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 (NAV) per share of ClearBridge MLP and Midstream Total Return Fund as of June 30, 2024?

The net asset value (NAV) per share of ClearBridge MLP and Midstream Total Return Fund (NYSE: CTR) as of June 30, 2024, is $45.65.

What is the asset coverage ratio for senior indebtedness of ClearBridge MLP and Midstream Total Return Fund?

The asset coverage ratio for senior indebtedness of ClearBridge MLP and Midstream Total Return Fund (NYSE: CTR) is 439% as of June 30, 2024.

How much are the net assets of ClearBridge MLP and Midstream Total Return Fund?

As of June 30, 2024, the net assets of ClearBridge MLP and Midstream Total Return Fund (NYSE: CTR) are $157.2 million.

What were the top equity holdings of ClearBridge MLP and Midstream Total Return Fund as of June 30, 2024?

As of June 30, 2024, the top equity holdings of ClearBridge MLP and Midstream Total Return Fund (NYSE: CTR) included Energy Transfer LP, Targa Resources Corp, and ONEOK Inc.

What was the result of the tender offer by ClearBridge MLP and Midstream Total Return Fund in June 2024?

The tender offer by ClearBridge MLP and Midstream Total Return Fund (NYSE: CTR), which expired on June 20, 2024, resulted in the repurchase of 3,443,416 shares, representing 50% of the Fund’s outstanding shares.

What is the asset coverage ratio for total leverage of ClearBridge MLP and Midstream Total Return Fund?

The asset coverage ratio for total leverage of ClearBridge MLP and Midstream Total Return Fund (NYSE: CTR) is 359% as of June 30, 2024.