ClearBridge MLP and Midstream Fund Inc. (NYSE: CEM) announced today the unaudited statement of assets and liabilities, the net asset value and asset coverage ratio of the Fund as of August 31, 2020.
As of August 31, 2020, the Fund’s net assets were $254.1 million, and its net asset value per share was $18.22. The Fund’s asset coverage ratio under the Investment Company Act of 1940 (the “1940 Act”) with respect to senior indebtedness was 506% and the Fund’s asset coverage ratio under the 1940 Act with respect to total leverage was 294%.
|As of August 31, 2020|
|Amount (millions)||Per Share|
|Cash and Cash Equivalents|
|Mandatory Redeemable Preferred Shares*|
|Income Tax Payable|
|Deferred Tax Liability|
|* The Fund's asset coverage ratio under the 1940 Act with respect to senior indebtedness was 506%.|
|* The Fund's asset coverage ratio under the 1940 Act with respect to total leverage was 294%.|
|Top Ten Equity Holdings (as of August 31, 2020)**|
|Name||(millions)||% of Investments||***|
|Enterprise Products Partners LP|
|Energy Transfer LP|
|Magellan Midstream Partners LP|
|Williams Cos. Inc.|
|Kinder Morgan Inc.|
|DCP Midstream LP|
|Targa Resources Corp.|
|** Subject to change at any time|
|*** Percent of Total Equity Investments|
The net assets as of August 31, 2020 reflect a change in estimate of the Fund’s tax liabilities. The Fund may rely to some extent on information provided by the underlying securities in which it invests (collectively, the “MLPs”), which may not necessarily be timely, to estimate taxable income and to estimate the associated current and deferred tax liability. Such estimates are made in good faith. From time to time, as new information becomes available, the Fund modifies its estimates or assumptions regarding the tax liabilities.
As a result of portfolio turnover, and based on new information received from the MLPs, the Fund anticipates that it will have current taxable income and pay current tax expense. For MLPs taxed as partnerships, the Fund previously recognized as an ordinary expense its allocable share of accelerated depreciation deductions flowed through from the underlying MLPs. Section 751 of the Internal Revenue Code effectively requires that upon sale of those MLPs, the accelerated depreciation deductions get recaptured as ordinary income instead of receiving capital gain or loss treatment, and this is the primary driver for the Fund projecting current taxable income. The actual and estimated amount of ordinary income recapture is provided by the MLPs.
The change in estimate was recorded on August 27, 2020. Additional revisions may be required in the future as new information becomes available or additional portfolio turnover occurs, and there could be a material impact on the Fund’s net asset value at that time.
During the month ended August 31, 2020, the Fund repurchased in the open market and retired 103,464 of its common shares under the stock repurchase plan for a total amount of $1,656,083.
ClearBridge MLP and Midstream Fund Inc. is a non-diversified, closed-end management investment company, which is advised by Legg Mason Partners Fund Advisor, LLC (“LMPFA”) and subadvised by ClearBridge Investments, LLC (“ClearBridge”). LMPFA and ClearBridge are wholly-owned subsidiaries of Franklin Resources, Inc. (“Franklin Resources”).
On July 31, 2020, Franklin Resources acquired Legg Mason, Inc. (“Legg Mason”) in an all-cash transaction. As a result of the transaction, LMPFA and ClearBridge, previously wholly-owned subsidiaries of Legg Mason, became wholly-owned subsidiaries of Franklin Resources.
This financial data is unaudited.
The Fund files its semi-annual and annual reports with the Securities and Exchange Commission (“SEC”), as well as its complete schedule of portfolio holdings for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. These reports are available on the SEC’s website at www.sec.gov. To obtain information on Form N-PORT or a semi-annual or annual report from the Fund, shareholders can call 1-888-777-0102.
For more information about the Fund, please call 1-888-777-0102 or consult the Fund’s website at www.lmcef.com. Hard copies of the Fund’s complete audited financial statements are available free of charge upon request.
Data and commentary provided in this press release are for informational purposes only. Franklin Resources and its affiliates do not engage in selling shares of the Fund.
Source: Franklin Resources, Inc.