ClearBridge Energy Midstream Opportunity Fund Inc. Announces Unaudited Balance Sheet Information as of March 31, 2024

Rhea-AI Summary

ClearBridge Energy Midstream Opportunity Fund Inc. (NYSE: EMO) reported its financial position as of March 31, 2024, with net assets of $566.3 million and a net asset value per share of $44.29. The Fund's asset coverage ratios under the 1940 Act were 437% for senior indebtedness and 361% for total leverage. Top ten equity holdings included Energy Transfer LP, ONEOK Inc., and Targa Resources Corp.

Insights

Financial Analyst

The disclosed financials of ClearBridge Energy Midstream Opportunity Fund Inc. (EMO) provide a snapshot of the company's fiscal health as of March 31, 2024. The net asset value (NAV) per share is a critical indicator for investors as it represents the value of a share after liabilities are subtracted from assets. An NAV of $44.29 suggests robust underlying asset performance, especially when considering the volatility often associated with energy investments.

Another significant metric here is the asset coverage ratio, which exceeds the minimum 300% required by the 1940 Act for senior securities, indicating a strong protective cushion for debt holders. The high coverage ratios (437% for senior indebtedness and 361% for total leverage) imply that the fund maintains a conservative leverage strategy, which can be appealing to risk-averse investors, particularly in the energy sector which is subject to commodity price fluctuations.

It's important to note the fund's status as a non-diversified, closed-end management investment company. This means that while there could be higher reward potential due to concentrated investments, there's also heightened risk. The top ten equity holdings, representing 71.4% of total investments, are concentrated in the midstream segment of the energy sector, which involves the transportation, storage and wholesale marketing of crude or refined petroleum products. Midstream companies can offer stable cash flows, which might be reflected in the fund's performance.

Market Research Analyst

Assessing the market implications of EMO's financial statement, the concentration in top midstream energy companies is noteworthy. Companies like Energy Transfer LP and ONEOK Inc. have historically provided steady dividend yields due to their midstream operations, which can be less sensitive to oil and gas prices compared to upstream producers. This positions EMO potentially as a stable income-generating investment.

However, the energy sector is undergoing significant transformation with the shift towards renewable energy sources. Investors should be aware of the long-term implications of this transition on midstream companies. While current investments may be lucrative, the sector's evolution could necessitate strategic shifts in portfolio composition to maintain performance.

Moreover, the fund's non-diversified nature could mean that any negative developments within the energy sector, or regulatory changes affecting midstream operations, could have an outsized impact on the fund's performance. Continuous monitoring of sector trends and regulatory environments is essential for stakeholders to anticipate and react to potential risks.

Legal Expert

From a regulatory perspective, the fund's adherence to the 1940 Act is important for compliance and investor protection. The asset coverage ratios are well above the statutory minimum, which provides a degree of safety for investors against potential downturns in the energy market. This compliance is a positive sign for potential investors who are concerned about the legal and regulatory risks associated with investment funds.

Additionally, the unaudited nature of the financial data calls for cautious interpretation. While the fund is obliged to file semi-annual and annual reports with the SEC and its portfolio holdings are publicly available, the unaudited status means that the figures have not undergone the scrutiny of an external audit. This could introduce an element of risk, as audited financials provide an additional layer of assurance regarding the accuracy of the reported data.

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 March 31, 2024.

As of March 31, 2024, the Fund’s net assets were $566.3 million, and its net asset value per share was $44.29. The Fund’s asset coverage ratio under the Investment Company Act of 1940 (the “1940 Act”) with respect to senior indebtedness was 437% and the Fund’s asset coverage ratio under the 1940 Act with respect to total leverage was 361%.

	As of March 31, 2024
	Amount (millions)			Per Share
Investments	$	776.2		$	60.71
Cash and Cash Equivalents		8.2			0.64
Other Assets		30.6			2.39
Total Assets	$	815.0		$	63.74
Senior Notes*	$	21.3		$	1.67
Loans Outstanding*		158.0			12.36
Mandatory Redeemable Preferred Shares*		37.9			2.96
Total Leverage	$	217.2		$	16.99
Deferred Tax Liability	$	2.7		$	0.21
Other Liabilities		28.8			2.25
Total Liabilities	$	31.5		$	2.46
Net Assets	$	566.3		$	44.29
Outstanding Shares		12,787,291
* The Fund's asset coverage ratio under the 1940 Act with respect to senior indebtedness was 437%.
* The Fund's asset coverage ratio under the 1940 Act with respect to total leverage was 361%.
Top Ten Equity Holdings (as of March 31, 2024)**
	Market Value
Name	(millions)			% of Investments			***
Energy Transfer LP	$	95.1			12.3	%
ONEOK Inc.	$	64.6			8.3	%
Targa Resources Corp.	$	63.2			8.1	%
MPLX LP	$	62.6			8.1	%
Western Midstream Partners LP	$	59.4			7.6	%
Enterprise Products Partners LP	$	54.9			7.1	%
Williams Cos. Inc.	$	40.8			5.3	%
Plains All American Pipeline LP	$	38.2			4.9	%
Kinder Morgan Inc.	$	38.0			4.9	%
Plains GP Holdings LP	$	37.5			4.8	%
	$	554.3			71.4	%
** 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 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/20240405529694/en/

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

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

FAQ

What is the net asset value per share of ClearBridge Energy Midstream Opportunity Fund Inc. (EMO) as of March 31, 2024?

The net asset value per share of EMO was $44.29 as of March 31, 2024.

What were the total net assets of ClearBridge Energy Midstream Opportunity Fund Inc. (EMO) as of March 31, 2024?

The total net assets of EMO were $566.3 million as of March 31, 2024.

What were the asset coverage ratios of ClearBridge Energy Midstream Opportunity Fund Inc. (EMO) under the 1940 Act as of March 31, 2024?

The asset coverage ratio for senior indebtedness was 437%, and for total leverage, it was 361% as of March 31, 2024.

Who advises ClearBridge Energy Midstream Opportunity Fund Inc. (EMO)?

EMO is advised by Franklin Templeton Fund Adviser, and subadvised by ClearBridge Investments,

Where can shareholders access reports and portfolio holdings information of ClearBridge Energy Midstream Opportunity Fund Inc. (EMO)?

Shareholders can access reports and portfolio holdings information of EMO on the SEC's website at www.sec.gov or by calling 1-888-777-0102.