ClearBridge Energy Midstream Opportunity Fund Inc. Announces Unaudited Balance Sheet Information as of February 29, 2024

Rhea-AI Summary

ClearBridge Energy Midstream Opportunity Fund Inc. (NYSE: EMO) released its unaudited financial report as of February 29, 2024. The Fund's net assets were $519.6 million, with a net asset value per share of $40.64. Asset coverage ratios were 446% for senior indebtedness and 339% for total leverage. The top ten equity holdings accounted for 70.7% of investments.

Insights

Financial Analyst

The reported net asset value (NAV) per share of $40.64 for ClearBridge Energy Midstream Opportunity Fund Inc. (EMO) provides investors with a key metric for evaluating the Fund's performance relative to its market price. A NAV above the market price could indicate that the Fund is undervalued, potentially attracting investors seeking arbitrage opportunities. The asset coverage ratios, significantly above the 300% threshold required by the 1940 Act, demonstrate a strong buffer against market volatility and creditor claims, which could be reassuring for debt and equity investors concerned about the Fund's leverage and solvency.

Furthermore, the concentration of investments in top energy sector holdings represents a focused strategy that could yield higher returns but also poses sector-specific risks, such as fluctuations in energy prices and regulatory changes. The disclosed top ten equity holdings, comprising 70.7% of total investments, highlight the Fund's exposure to market movements within the energy sector, which is crucial for investors to consider when assessing the risk profile of their investment.

Market Research Analyst

Analyzing the sector allocation of EMO's portfolio reveals a significant commitment to the energy midstream segment. This focus on energy infrastructure companies like Energy Transfer LP and ONEOK Inc. can be attractive during times of stable or increasing energy demand. However, this concentration also implies susceptibility to sector-specific downturns, which could impact the Fund's performance. The energy midstream sector is typically characterized by long-term contracts and stable cash flows, but it is not immune to macroeconomic pressures, such as interest rate changes and shifts in commodity prices.

Investors would benefit from understanding the dynamics of the energy midstream market, including how geopolitical events, environmental regulations and the transition to renewable energy sources might influence these companies' long-term profitability and, by extension, the performance of the Fund.

Legal Expert

The compliance with the 1940 Act's asset coverage requirements is a critical legal aspect for closed-end funds like EMO. The Fund's reported asset coverage ratios well above the minimum thresholds indicate a robust legal and financial position concerning leverage. This information is pertinent for current and potential shareholders who must be aware of regulatory compliance as it affects the Fund's ability to issue additional debt or pay dividends.

Investors should also be aware of the implications of the Fund's unaudited financial data and the importance of reviewing the audited reports filed with the SEC for a complete and verified financial assessment. The Fund's adherence to SEC filing requirements for Form N-PORT and other periodic reports provides a layer of transparency and regulatory oversight, which is vital for investor confidence and corporate governance standards.

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 February 29, 2024.

As of February 29, 2024, the Fund’s net assets were $519.6 million, and its net asset value per share was $40.64. The Fund’s asset coverage ratio under the Investment Company Act of 1940 (the “1940 Act”) with respect to senior indebtedness was 446% and the Fund’s asset coverage ratio under the 1940 Act with respect to total leverage was 339%.

	As of February 29, 2024
	Amount (millions)			Per Share
Investments	$	728.4		$	56.97
Cash and Cash Equivalents		8.3			0.65
Other Assets		22.6			1.77
Total Assets	$	759.3		$	59.39
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
Deferred Tax Liability	$	2.9		$	0.23
Other Liabilities		19.6			1.53
Total Liabilities	$	22.5		$	1.76
Net Assets	$	519.6		$	40.64
Outstanding Shares		12,787,291
* The Fund's asset coverage ratio under the 1940 Act with respect to senior indebtedness was 446%.
* The Fund's asset coverage ratio under the 1940 Act with respect to total leverage was 339%.
Top Ten Equity Holdings (as of February 29, 2024)**
	Market Value
Name	(millions)			% of Investments			***
Energy Transfer LP	$	88.6			12.2	%
ONEOK Inc.	$	60.6			8.3	%
MPLX LP	$	57.9			8.0	%
Western Midstream Partners LP	$	55.8			7.7	%
Targa Resources Corp.	$	55.5			7.6	%
Enterprise Products Partners LP	$	51.7			7.1	%
Williams Cos. Inc.	$	37.6			5.2	%
Kinder Morgan Inc.	$	36.0			4.9	%
Plains All American Pipeline LP	$	35.7			4.9	%
Plains GP Holdings LP	$	35.3			4.8	%
	$	514.7			70.7	%
** 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/20240307596968/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. as of February 29, 2024?

The net asset value per share was $40.64.

What were the total assets of the Fund as of February 29, 2024?

The total assets were $759.3 million.

What were the asset coverage ratios for senior indebtedness and total leverage under the 1940 Act?

The asset coverage ratio for senior indebtedness was 446%, and for total leverage, it was 339%.

Who advises ClearBridge Energy Midstream Opportunity Fund Inc.?

The Fund is advised by Franklin Templeton Fund Adviser, LLC and subadvised by ClearBridge Investments, LLC.