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Kayne Anderson Energy Development Company Announces Results For The Quarter Ended February 28, 2010

The maximum amount that the Company can borrow under its New Credit Facility is limited to the lesser of $70 million and its borrowing base. The Company’s borrowing base is generally calculated by multiplying the fair value of each of its investments by an advance rate for such type of investment. The advance rates in the New Credit Facility are substantially the same as the Existing Credit Facility with the exception of a lower advance rate on the Company’s private MLPs. The Company does not anticipate that the changes to its New Credit Facility will have a material impact on its distributable cash flow or investment strategy.

As of February 28, 2010, the Company had $61 million borrowed under its Existing Credit Facility (at an interest rate of 1.48%) which represented 71.2% of its borrowing base of $85.7 million. As of April 5, 2010, the Company had $55 million borrowed under its New Credit Facility (at an interest rate of 2.25%) which represented 72.8% of the borrowing base of $75.6 million.

DISTRIBUTION

On April 1, 2010, the Company announced a distribution of $0.30 per share for the quarter ended February 28, 2010.

GUIDANCE FOR FISCAL 2010

Based on the Company’s portfolio of investments and average yields on those investments as of February 28, 2010, the Company estimates dividends, distributions, and interest income will be approximately $4.8 million per quarter. Such estimate does not reflect any changes in cash distributions made by MLPs or changes in interest rates based on the movement in LIBOR rates since February 28, 2010. Such estimate includes the $1.2 million preferred unit distribution from Direct Fuels.

               
Portfolio Category     Amount Invested($ in millions)    

 Average Annual Yield (1)(2)

 
Private MLPs      

$93.

9

      10.7 %  
Public MLPs and MLP Affiliates      

$72.

3

      7.2 %  
Fixed Income (3)      

$40.

5

      10.1 %  
Repurchase Agreements (4)      

$8.

2

      0.02 %  
         

 

  (1)   Average yields include return of capital distributions. Return of capital distributions are reported as a reduction to gross dividends and distributions to arrive at net investment income reported under generally accepted accounting principles.
(2) Average yields for Public MLPs and MLP Affiliates are based on the most recently declared distributions as of February 28, 2010. Amount invested and average yields for Private MLPs are based on February 28, 2010 valuations and distribution rates.
(3) The amount invested and average yield excludes the Company’s ProPetro investment (the Company does not anticipate receiving cash interest payments on this investment). The average yield includes amortization of the purchase price discount.
(4)

Includes repurchase agreements at February 28, 2010 less Q1 2010 distribution of $3.1 million (to be paid on April 29, 2010).

 

Base Management Fees and Other Operating Expenses - Base management fees are estimated to be approximately $0.9 million per quarter. Other operating expenses are estimated to be approximately $0.45 million per quarter.

Interest Expense - Based on $61.0 million borrowed under the Company’s senior secured revolving credit facility as of February 28, 2010, interest expense is estimated to be approximately $0.35 million per quarter assuming a LIBOR rate of 0.25% and a spread of 2.00%.

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