WITHDRAWAL OF ELECTION TO BE TREATED AS A BUSINESS DEVELOPMENT COMPANY (“BDC”)
At the annual stockholders’ meeting of the Company on June 30, 2010, the stockholders approved the withdrawal of the Company’s election to be treated as a business development company under the Investment Company Act of 1940. On July 7, 2010, the Company filed the withdrawal with the Securities Exchange Commission which was effective upon receipt. The Company is also no longer subject to the requirement that 70% of its portfolio must be comprised of “qualifying assets,” which generally include domestic private companies.
The Company’s investment objective remains unchanged, but its target mix of portfolio investments has been revised as follows. Under normal market conditions, its portfolio investments will be allocated (i) between 50% and 70% in private MLPs, (ii) between 30% and 50% in public MLPs and (iii) between 0% and 20% in debt securities of public and private energy companies.
DISTRIBUTIONOn June 30, 2010, the Company announced a distribution of $0.30 per share for the quarter ended May 31, 2010. GUIDANCE FOR FISCAL 2010 Based on the Company’s portfolio of investments and average yields on those investments as of May 31, 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 May 31, 2010. The estimate also includes the $1.2 million per quarter preferred unit distribution from Direct Fuels.
|Portfolio Category||Amount Invested($ in millions)||Average AnnualYield (1)(2)|
|Public MLPs and MLP Affiliates||$66.5||7.3%|
|Fixed Income (3)||$35.1||10.1%|
|Repurchase Agreements (4)||$4.1||0.1%|
|(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 May 31, 2010. Amount invested and average yields for Private MLPs are based on May 31, 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 discounts.|
|(4)||Includes repurchase agreements at May 31, 2010 less Q2 2010 distribution of $3.1 million (to be paid on July 29, 2010).|