12.03
NAL has closed its $115 MM convertible debenture financing. The
debentures mature on December 31, 2014, will pay a 6.25% coupon and
will have a conversion price of $16.50 per trust unit.
We now estimate NAL will exit 2009 with $273 MM of net bank debt versus
its $575 MM line and $468 MM of total debt including all converts. With the
convertible issuance and slight adjustments to our model, our estimates are
unchanged for both 2009 and 2010.
Overall, we continue to believe the relatively low-risk, oil-focused growth
profile that NAL can provide investors over the next several quarters puts it
in a unique position compared to the majority of its trust peers facing
diminished drilling activity on weak natural gas prices.
NAL currently trades at 6.5x 2010E EV/DACF (group average of 7.4x) and at
a 23% premium to NAV (group at a 4% premium), a valuation we continue
to view as attractive. We reiterate our Sector Outperformer rating and
$14.25 price target.
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