ClearBridge Energy Midstream Opportunity Fund Inc. Announces Unaudited Balance Sheet Information as of December 31, 2023

Rhea-AI Summary

ClearBridge Energy Midstream Opportunity Fund Inc. (NYSE: EMO) announced its unaudited statement of assets and liabilities, net asset value, and asset coverage ratio as of December 31, 2023. The Fund's net assets were $482.3 million, with a net asset value per share of $37.72. The asset coverage ratio under the 1940 Act for senior indebtedness was 423%, and for total leverage was 322%. The top ten equity holdings accounted for 70.4% of total equity investments.

Insights

Financial Analyst

The disclosed net asset value (NAV) per share of $37.72 for ClearBridge Energy Midstream Opportunity Fund Inc. (EMO) provides investors with a snapshot of the fund's per-share market value as of December 31, 2023. This figure is crucial as it reflects the fund's success in asset management relative to the market prices of its investments. The asset coverage ratios, with 423% for senior indebtedness and 322% for total leverage, are significantly above the minimum 300% and 200% thresholds typically required by the 1940 Act for closed-end funds. This indicates a strong cushion against market volatility and credit risk, potentially making the fund an attractive option for risk-averse investors.

Moreover, the fund's top ten equity holdings, which represent 70.4% of its total investments, are concentrated in key players within the energy sector, such as Energy Transfer LP and ONEOK Inc. This concentration suggests a focused investment strategy, but also implies a higher risk due to potential sector-specific downturns. Investors should consider the fund's sector focus in light of their own investment strategy and risk tolerance.

Market Research Analyst

ClearBridge Energy Midstream Opportunity Fund's investment in midstream energy infrastructure companies, as indicated by its top equity holdings, taps into a niche market that is essential for the transportation, storage and processing of energy commodities. Given the essential nature of these services, the fund's performance is likely to be less sensitive to short-term fluctuations in energy prices and more influenced by long-term energy consumption trends and infrastructure demand.

Investors should note the fund's non-diversified status, which allows for higher concentration in specific investments but also increases exposure to individual asset volatility. The energy sector's future growth is tied to global economic activity, regulatory changes and technological advancements in energy production and distribution. These factors should be considered when assessing the potential performance of EMO's holdings.

Legal Expert

Compliance with the Investment Company Act of 1940 is a key legal aspect for investment funds like EMO. The high asset coverage ratios reported exceed the Act's requirements, which is indicative of a conservative leverage approach and prudent risk management. This legal footing may provide investors with a sense of security regarding the fund's governance and capital structure.

However, investors should remain aware of the regulatory risks inherent to the energy sector, including changes in environmental policies and energy regulations, which could impact the fund's holdings. The legal environment of the energy sector is dynamic and changes can have significant implications for midstream companies and, by extension, for funds invested in them.

NEW YORK--(BUSINESS WIRE)-- ClearBridge Energy Midstream Opportunity Fund Inc. (NYSE: EMO) announced today the unaudited statement of assets and liabilities, the net asset value and asset coverage ratio of the Fund as of December 31, 2023.

As of December 31, 2023, the Fund’s net assets were $482.3 million, and its net asset value per share was $37.72. The Fund’s asset coverage ratio under the Investment Company Act of 1940 (the “1940 Act”) with respect to senior indebtedness was 423% and the Fund’s asset coverage ratio under the 1940 Act with respect to total leverage was 322%.

	As of December 31, 2023
	Amount (millions)			Per Share
Investments	$	664.2		$	51.95
Cash and Cash Equivalents		33.0			2.58
Other Assets		4.2			0.33
Total Assets	$	701.4		$	54.86
Senior Notes*	$	21.3		$	1.67
Loans Outstanding*		144.0			11.26
Mandatory Redeemable Preferred Shares*		51.9			4.06
Total Leverage	$	217.2		$	16.99
Other Liabilities	$	1.9		$	0.15
Total Liabilities	$	1.9		$	0.15
Net Assets	$	482.3		$	37.72
Outstanding Shares		12,787,291
* The Fund's asset coverage ratio under the 1940 Act with respect to senior indebtedness was 423%.
* The Fund's asset coverage ratio under the 1940 Act with respect to total leverage was 322%.
Top Ten Equity Holdings (as of December 31, 2023)**
	Market Value
Name	(millions)			% of Investments			***
Energy Transfer LP	$	83.5			12.6	%
ONEOK Inc.	$	56.6			8.5	%
MPLX LP	$	51.7			7.8	%
Targa Resources Corp.	$	49.1			7.4	%
Western Midstream Partners LP	$	48.9			7.4	%
Enterprise Products Partners LP	$	47.6			7.2	%
Plains All American Pipeline LP	$	33.0			5.0	%
Plains GP Holdings LP	$	32.8			4.9	%
Enbridge Inc.	$	32.2			4.8	%
Williams Cos. Inc.	$	32.1			4.8	%
	$	467.5			70.4	%
** Subject to change at any time
*** Percent of Total Equity Investments

ClearBridge Energy Midstream Opportunity Fund Inc. is a non-diversified, closed-end management investment company, which is advised by Franklin Templeton Fund Adviser, LLC (“FTFA”) (formerly 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/20240108228927/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 Energy Midstream Opportunity Fund Inc. as of December 31, 2023?

The net asset value of ClearBridge Energy Midstream Opportunity Fund Inc. as of December 31, 2023, was $37.72 per share.

What is the asset coverage ratio of ClearBridge Energy Midstream Opportunity Fund Inc. under the 1940 Act for senior indebtedness?

The asset coverage ratio under the 1940 Act for senior indebtedness was 423% as of December 31, 2023.

Who advises ClearBridge Energy Midstream Opportunity Fund Inc.?

ClearBridge Energy Midstream Opportunity Fund Inc. is advised by Franklin Templeton Fund Adviser, LLC and subadvised by ClearBridge Investments, LLC.

Where can shareholders obtain information on Form N-PORT or the semi-annual and annual reports from the Fund?

Shareholders can obtain information on Form N-PORT or the semi-annual and annual reports from the Fund by calling 1-888-777-0102.