Author Topic: TOO - Teekay Offshore Partners L.P.  (Read 18921 times)

chrispy

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Re: TOO - Teekay Offshore Partners L.P.
« Reply #110 on: January 11, 2019, 05:56:48 AM »
Heth, I appreciate the work you have shared here


heth247

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Re: TOO - Teekay Offshore Partners L.P.
« Reply #111 on: January 11, 2019, 09:16:56 AM »
Heth, I appreciate the work you have shared here

Thanks, Chris. Actually, it was the original discussion by BG, Packer, and later Seth, that helped me to understand and became really interested in this investment.

I welcome feedback by other board members on my thoughts shared above. E.g. I assumed that the $366MM + $85MM secured debt payment can be simply refinanced. If that assumption is not true, then TOO can run in to liquidity trouble.  On the other hand, they issued 700MM @ 8.5% unsecured debt last year, and used it to take out the 200MM @ 10% debt BBU bought from TK, that is due in 2022. This tells me that they don't foresee any trouble of liquidity in 2019, otherwise they would have kept that 200MM debt because it not due for 4 years. Does that make sense?


Deepdive

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Re: TOO - Teekay Offshore Partners L.P.
« Reply #112 on: January 12, 2019, 02:45:02 PM »
heth,

That's nice of you to call out BG, Packer and Seth.  It is very un-Wall Street of you. 

heth247

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Re: TOO - Teekay Offshore Partners L.P.
« Reply #113 on: January 12, 2019, 05:21:54 PM »
heth,

That's nice of you to call out BG, Packer and Seth.  It is very un-Wall Street of you.

Hehe, I am indeed very "un-wall street", because I don't work in financial industry. I am a software engineer who is still learning value investing. I will try my best to contribute meaningfully to the discussion, and hope can learn from others here. thanks.
« Last Edit: January 12, 2019, 05:30:41 PM by heth247 »

walkie518

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Re: TOO - Teekay Offshore Partners L.P.
« Reply #114 on: January 14, 2019, 09:59:08 AM »
Heth, I appreciate the work you have shared here

Thanks, Chris. Actually, it was the original discussion by BG, Packer, and later Seth, that helped me to understand and became really interested in this investment.

I welcome feedback by other board members on my thoughts shared above. E.g. I assumed that the $366MM + $85MM secured debt payment can be simply refinanced. If that assumption is not true, then TOO can run in to liquidity trouble.  On the other hand, they issued 700MM @ 8.5% unsecured debt last year, and used it to take out the 200MM @ 10% debt BBU bought from TK, that is due in 2022. This tells me that they don't foresee any trouble of liquidity in 2019, otherwise they would have kept that 200MM debt because it not due for 4 years. Does that make sense?
Unless Brookfield has other plans, I would think that buying into a firm to drive it into bankruptcy is not the goal.

My assumption is that Brookfield likely backs the business or finds a way to leverage its balance sheet to put financing in place at attractive rates that the business could not otherwise afford. 

There is also a lot of money that could be made on loans with high IRR and low absolute interest rates...likely a way to juice returns for some Brookfield funds should the market dry up?   Too incestuous?