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- Quarterly Schedule of Portfolio Holdings of Registered Management Investment Company (N-Q)

Date : 04/27/2012 @ 5:10PM
Source : Edgar (US Regulatory)
Stock : Kayne Anderson Mlp Investment (KYN)
Quote : 38.62  -0.38 (-0.97%) @ 7:25AM
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- Quarterly Schedule of Portfolio Holdings of Registered Management Investment Company (N-Q)

Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM N-Q

 

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-21593

 

 

Kayne Anderson MLP Investment Company

(Exact name of registrant as specified in charter)

 

 

717 Texas Avenue, Suite 3100,

Houston, Texas 77002

(Address of principal executive offices) (Zip code)

 

 

David Shladovsky, Esq.

KA Fund Advisors, LLC,

717 Texas Avenue, Suite 3100,

Houston, Texas 77002

(Name and address of agent for service)

 

 

Registrant’s telephone number, including area code: (713) 493-2020

Date of fiscal year end: November 30, 2012

Date of reporting period: February 29, 2012

 

 

 


Table of Contents

TABLE OF CONTENTS

 

Item 1: Schedule of Investments

  

Item 2: Controls and Procedures

  

Item 3: Exhibits

  

SIGNATURES

  

EX-99.CERT

  


Table of Contents

Item 1: Schedule of Investments

KAYNE ANDERSON MLP INVESTMENT COMPANY

SCHEDULE OF INVESTMENTS

FEBRUARY 29, 2012

(amounts in 000’s, except number of option contracts)

(UNAUDITED)

 

Description

             No. of
Shares/Units
     Value  

Long-Term Investments — 167.1%

     

Equity Investments (1)  — 164.3%

     

Midstream MLP (2)  — 110.8%

     

Boardwalk Pipeline Partners, LP

     1,032       $ 28,046   

Buckeye Partners, L.P.

     1,405         84,033   

Buckeye Partners, L.P. — Class B Units (3)(4)

     865         47,087   

Chesapeake Midstream Partners, L.P.

     1,325         37,830   

Copano Energy, L.L.C.

     1,533         56,994   

Crestwood Midstream Partners LP

     1,826         52,663   

Crestwood Midstream Partners LP — Class C Units (3)(4)

     1,134         29,990   

Crosstex Energy, L.P.

     1,200         20,637   

DCP Midstream Partners, LP

     2,024         98,567   

El Paso Pipeline Partners, L.P.

     4,345         159,336   

Enbridge Energy Partners, L.P.

     3,715         120,916   

Energy Transfer Partners, L.P.

     1,736         82,294   

Enterprise Products Partners L.P.

     7,396         383,685   

Exterran Partners, L.P.

     2,878         68,064   

Global Partners LP

     1,974         43,398   

Holly Energy Partners, L.P.

     387         23,725   

Inergy Midstream, L.P.

     1,064         22,547   

Magellan Midstream Partners, L.P.

     2,316         169,457   

MarkWest Energy Partners, L.P.

     3,920         234,456   

Niska Gas Storage Partners LLC

     1,671         15,772   

NuStar Energy L.P.

     301         18,283   

Oiltanking Partners, L.P.

     460         14,890   

ONEOK Partners, L.P.

     2,397         139,520   

PAA Natural Gas Storage, L.P.

     1,124         21,577   

Plains All American Pipeline, L.P. (5)

     3,161         261,423   

Regency Energy Partners LP

     6,393         169,425   

Rose Rock Midstream, L.P.

     315         7,514   

Spectra Energy Partners, L.P.

     596         19,673   

Targa Resources Partners L.P.

     1,873         79,682   

TC PipeLines, LP

     190         8,810   

Tesoro Logistics LP

     502         18,339   

Transmontaigne Partners L.P.

     393         13,632   

Western Gas Partners L.P.

     1,156         52,921   

Williams Partners L.P.

     2,509         156,076   
           

 

 

 
              2,761,262   
           

 

 

 

MLP Affiliate (2)  — 15.5%

           

Enbridge Energy Management, L.L.C. (4)

     2,161         72,961   

Kinder Morgan Management, LLC (4)

     3,900         312,700   
           

 

 

 
              385,661   
           

 

 

 

General Partner MLP (2)  — 11.3%

           

Alliance Holdings GP L.P.

     1,706         85,825   

Energy Transfer Equity, L.P.

     4,425         192,422   

NuStar GP Holdings, LLC

     74         2,592   
           

 

 

 
              280,839   
           

 

 

 


Table of Contents

KAYNE ANDERSON MLP INVESTMENT COMPANY

SCHEDULE OF INVESTMENTS

FEBRUARY 29, 2012

(amounts in 000’s, except number of option contracts)

(UNAUDITED)

 

Description

                No. of
Shares/Units
     Value  

Shipping MLP — 9.0%

          

Capital Product Partners L.P.

          2,841       $ 21,221   

Golar LNG Partners LP

          92         3,419   

Navios Maritime Partners L.P.

          1,950         31,258   

Teekay LNG Partners L.P.

          1,879         73,645   

Teekay Offshore Partners L.P.

          3,223         94,734   
          

 

 

 
             224,277   
          

 

 

 

Midstream — 7.6%

          

El Paso Corporation (6)

          656         18,232   

Kinder Morgan, Inc.

          854         30,095   

ONEOK, Inc.

          421         34,808   

Plains All American GP LLC — Unregistered (3)(5)

          24         47,538   

Targa Resources Corp.

          276         12,280   

The Williams Companies, Inc.

          1,588         47,440   
          

 

 

 
             190,393   
          

 

 

 

Upstream MLP & Income Trust— 4.5%

          

BreitBurn Energy Partners L.P.

          1,597         30,111   

Chesapeake Granite Wash Trust

          533         14,807   

Legacy Reserves L.P.

          535         15,437   

LRR Energy, L.P.

          243         4,912   

Memorial Production Partners LP

          318         5,908   

Mid-Con Energy Partners, LP

          338         8,214   

SandRidge Permian Trust

          1,028         24,930   

VOC Energy Trust

          344         7,459   
          

 

 

 
             111,778   
          

 

 

 

Coal MLP — 3.1%

          

Alliance Resource Partner, L.P.

          12         883   

Penn Virginia Resource Partners, L.P.

          3,063         76,382   
          

 

 

 
             77,265   
          

 

 

 

Propane MLP — 2.4%

          

Inergy, L.P.

          3,510         61,290   
          

 

 

 

Other — 0.1%

          

Clearwater Trust (3)(5)(7)

          N/A         3,250   
          

 

 

 

Total Equity Investments (Cost — $2,408,532)

             4,096,015   
          

 

 

 
          
       Interest
Rate
    Maturity
Date
     Principal
Amount
        

Debt Investments — 2.8%

          

Midstream — 1.6%

          

Crestwood Holdings Partners, LLC

     (8)        10/1/16       $ 5,549         5,660   

Crestwood Midstream Partners LP

     7.750     4/1/19         11,750         11,927   

Niska Gas Storage Partners LLC

     8.875        3/15/18         24,000         23,160   
          

 

 

 
             40,747   
          

 

 

 


Table of Contents

KAYNE ANDERSON MLP INVESTMENT COMPANY

SCHEDULE OF INVESTMENTS

FEBRUARY 29, 2012

(amounts in 000’s, except number of option contracts)

(UNAUDITED)

 

Description

   Interest
Rate
    Maturity
Date
     Principal
Amount
     Value  

Upstream — 0.7%

          

BreitBurn Energy Partners L.P.

     7.875     4/15/22       $ 2,250       $ 2,368   

Eagle Rock Energy Partners, L.P.

     8.375        6/1/19         975         1,009   

Linn Energy, LLC

     6.250        11/1/19         13,500         13,500   
          

 

 

 
             16,877   
          

 

 

 

Coal MLP — 0.3%

          

Penn Virginia Resource Partners, L.P.

     8.250        4/15/18         6,250         6,531   
          

 

 

 

Other — 0.2%

          

Calumet Specialty Products Partners, L.P.

     9.375        5/1/19         4,000         4,190   

Calumet Specialty Products Partners, L.P.

     9.375        5/1/19         2,000         2,095   
          

 

 

 
             6,285   
          

 

 

 

Total Energy Debt Investments (Cost — $68,794)

             70,440   
          

 

 

 

Total Long-Term Investments (Cost — $2,477,326)

             4,166,455   
          

 

 

 
          
                    No. of
Contracts
        

Liabilities

          

Call Option Contracts Written (9)

          

Midstream

          

El Paso Pipeline Partners, L.P., call option expiring 4/20/12
@ $37.50 (Premiums Received — $88)

          1,000         (50
          

 

 

 

Revolving Credit Facility

             (76,000

Senior Unsecured Notes

             (775,000

Mandatory Redeemable Preferred Stock at Liquidation Value

  

          (260,000

Deferred Tax Liability

             (645,606

Other Liabilities

             (200,244
          

 

 

 

Total Liabilities

             (1,956,900

Other Assets

             283,187   
          

 

 

 

Total Liabilities in Excess of Other Assets

             (1,673,713
          

 

 

 

Net Assets Applicable to Common Stockholders

           $ 2,492,742   
          

 

 

 

 

(1) Unless otherwise noted, equity investments are common units/common shares.
(2) Includes limited liability companies.
(3) Fair valued securities, restricted from public sale.
(4) Distributions are paid-in-kind.
(5) Kayne Anderson MLP Investment Company (the “Company”) believes that it is an affiliate of the Clearwater Trust, Plains All American Pipeline, L.P. and Plains All American GP LLC.
(6) Security or a portion thereof is segregated as collateral on option contracts written.
(7) The Company owns an interest in the Creditors Trust of Miller Bros. Coal, LLC (“Clearwater Trust”) consisting of a coal royalty interest.
(8) Floating rate first lien senior secured term loan. Security pays interest at a rate of LIBOR + 850 basis points, with a 2% LIBOR floor (10.50% as of February 29, 2012).
(9) Security is non-income producing.


Table of Contents

From time to time, certain of the Company’s investments may be restricted as to resale. For instance, private investments that are not registered under the Securities Act of 1933, as amended, cannot be offered for public sale in a non-exempt transaction without first being registered. In other cases, certain of the Company’s investments have restrictions such as lock-up agreements that preclude the Company from offering these securities for public sale.

At February 29, 2012, the Company held the following restricted investments:

 

Investment

   Security    Acquisition
Date
  Type of
Restriction
  Number  of
Units,
Principal ($)
(in  000’s)
     Cost
Basis
     Fair
Value
     Percent
of  Net
Assets
    Percent
of  Total
Assets
 

Level 3 Investments (1)

                    

Buckeye Partners, L.P. 

   Class B Units    (2)   (3)     865         45,006       $ 47,087         1.9     1.0

Clearwater Trust

   Trust Interest    (4)   (5)     1         3,266         3,250         0.1        0.1   

Crestwood Midstream Partners LP

   Class C Units    4/1/11   (3)     1,134         26,007         29,990         1.2        0.7   

Plains All American GP LLC (6)

   Common Units    (2)   (5)     24         33,040         47,538         1.9        1.1   
            

 

 

    

 

 

    

 

 

   

 

 

 

Total

             $ 107,319       $ 127,865         5.1     2.9
            

 

 

    

 

 

    

 

 

   

 

 

 

Level 2 Investments (7)

                    

BreitBurn Energy Partners L.P. 

   Senior Notes    1/10/12   (3)   $ 2,250       $ 2,231       $ 2,368         0.1     0.1

Crestwood Holdings Partners LLC

   Bank Loan    9/29/10   (5)     5,549         5,458         5,660         0.2        0.1   

Crestwood Midstream Partners LP

   Senior Notes    (2)   (3)     11,750         11,739         11,926         0.5        0.3   

Linn Energy, LLC

   Senior Notes    2/28/12   (3)     13,500         13,499         13,500         0.5        0.3   
            

 

 

    

 

 

    

 

 

   

 

 

 

Total

             $ 32,927       $ 33,454         1.3     0.8
            

 

 

    

 

 

    

 

 

   

 

 

 

Total of all restricted securities

             $ 140,246       $ 161,319         6.4     3.7
            

 

 

    

 

 

    

 

 

   

 

 

 

 

(1) Securities are valued using inputs reflecting the Company’s own assumptions.
(2) Securities acquired at various dates throughout the fiscal year ended November 30, 2011.
(3) Unregistered or restricted security of a publicly tracked company.
(4) On September 28, 2010, the Bankruptcy Court finalized the plan of reorganization of Clearwater. As part of the plan of reorganization, the Company received an interest in the Clearwater Trust consisting of cash and a coal royalty interest as consideration for its unsecured loan to Clearwater.
(5) Unregistered security of a private company or trust.
(6) In determining the fair value for Plains All American GP, LLC (“PAA GP”), the Company’s valuation is based on publicly available information. Robert V. Sinnott, the CEO of Kayne Anderson Capital Advisors, L.P. (“KACALP”), sits on PAA GP’s board of directors. Certain private investment funds managed by KACALP may value its investment in PAA GP based on non-public information, and, as a result, such valuation may be different than the Company’s valuation.
(7) These securities have a fair market value determined by the mean of the bid and ask prices provided by an agent or syndicate bank, principal market maker or an independent pricing service. These securities have limited trading volume and are not listed on a national exchange.

At February 29, 2012, the cost basis of investments for federal income tax purposes was $2,313,393. At February 29, 2012, gross unrealized appreciation and depreciation of investments for federal income tax purposes were as follows:

 

Gross unrealized appreciation of investments

   $ 1,860,389   

Gross unrealized depreciation of investments

     (7,326
  

 

 

 

Net unrealized appreciation

   $ 1,853,063   
  

 

 

 

The identified cost basis of federal tax purposes is estimated based on information available from the Company’s portfolio companies. In some cases, this information is very limited. Accordingly, the actual cost basis may prove higher or lower than the estimated cost basis included above.

As required by the Fair Value Measurement and Disclosures of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification, the Company has performed an analysis of all assets and liabilities measured at fair value to determine the significance and character of all inputs to their fair value determination.


Table of Contents

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into the following three broad categories. Note that the valuation levels below are not necessarily an indication of the risk or liquidity associated with the underlying investment.

 

   

Level 1 — Quoted unadjusted prices for identical instruments in active markets traded on a national exchange to which the Company has access at the date of measurement.

 

   

Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or instances where prices vary substantially over time or among brokered market makers.

 

   

Level 3 — Model derived valuations in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those inputs that reflect the Company’s own assumptions that market participants would use to price the asset or liability based on the best available information.

The following table presents the Company’s assets measured at fair value on a recurring basis at February 29, 2012. The Company presents these assets by security type and description on its Schedule of Investments.

 

       Total      Quoted Prices in
Active  Markets
(Level 1)
     Prices with  Other
Observable Inputs
(Level 2)
     Unobservable
Inputs
(Level 3)
 

Assets at Fair Value

           

Equity investments

   $ 4,096,015       $ 3,968,150       $       $ 127,865   

Debt investments

     70,440                 70,440           
  

 

 

    

 

 

    

 

 

    

 

 

 

Total assets at fair value

   $ 4,166,455       $ 3,968,150       $   70,440       $   127,865   
  

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities at Fair Value

           

Call option contracts written

   $ 50       $       $ 50       $   
  

 

 

    

 

 

    

 

 

    

 

 

 

The Company did not have any liabilities that were measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at February 29, 2012 or at November 30, 2011. For the three months ended February 29, 2012, there were no transfers between Level 1 and Level 2.

The following table presents the Company’s assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended February 29, 2012.

 

       Equity
Investments
 

Balance — November 30, 2011

   $ 164,129   

Purchases

       

Issuances

     1,427   

Transfers out

     (40,711

Realized gains (losses)

       

Unrealized gains, net

     3,020   
  

 

 

 

Balance — February 29, 2012

   $ 127,865   
  

 

 

 

The $3,020 of unrealized gains presented in the table above for the three months ended February 29, 2012 related to investments that are still held at February 29, 2012.

The issuances of $1,427 relate to additional units received from Buckeye Partners, L.P. (Class B Units) and Crestwood Midstream Partners LP (Class C Units). The Company’s investments in the common units of Teekay Offshore Partners L.P., which is noted as a transfer out of Level 3 in the table above, became readily marketable during the three months ended February 29, 2012.


Table of Contents

As required by the Derivatives and Hedging Topic of the FASB Accounting Standards Codification, the following are the derivative instruments and hedging activities of the Company.

The following table sets forth the fair value of the Company’s derivative instruments.

 

Derivatives Not Accounted for as

Hedging Instruments

    

Statement of Assets and Liabilities Location

  

Fair Value as of

February 29, 2012

Call options

    

Call option contracts written

   $(50)

The following table set forth the effect of the Company’s derivative instruments.

 

Derivatives Not Accounted for as

Hedging Instruments

  

Location of Gains/(Losses) on

Derivatives Recognized in Income

   For the Three Months Ended
February 29, 2012
      Net Realized
Gains/(Losses)  on
Derivatives
Recognized  in
Income
   Change in
Unrealized
Gains/(Losses) on
Derivatives
Recognized  in
Income

Call options

   Options    $356    $(55)

Securities valuation policies and other investment related disclosures are hereby incorporated by reference to the Company’s annual report previously filed with the Securities and Exchange Commission on form N-CSR on February 7, 2012 with a file number 811-21593.

Other information regarding the Company is available in the Company’s most recent annual report. This information is also available on the Company’s website at www.kaynefunds.com; or on the website of the Securities and Exchange Commission, www.sec.gov.

Item 2: Controls and Procedures

(a) As of a date within 90 days from the filing date of this report, the principal executive officer and principal financial officer concluded that the registrants disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the Act)), were effective based on their evaluation of the disclosure controls and procedures required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities and Exchange Act of 1934, as amended.

(b) There were no changes in the registrants internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the registrants last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrants internal control over financial reporting.

Item 3: Exhibits

1. The certifications of the registrant as required by Rule 30a-2(a) under the Act are exhibits to this report.


Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

KAYNE ANDERSON MLP INVESTMENT COMPANY
/ S / K EVIN S. M C C ARTHY

Name: Kevin S. McCarthy

Title:   Chairman of the Board of Directors,

            President and Chief Executive Officer

Date: April 27, 2012

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

/ S / K EVIN S. M C C ARTHY

Name: Kevin S. McCarthy

Title:   Chairman of the Board of Directors,

            President and Chief Executive Officer

Date: April 27, 2012

 

/ S / T ERRY A. H ART

Name: Terry A. Hart

Title:   Chief Financial Officer and Treasurer

Date: April 27, 2012

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