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Why Are These MLPs Spinning Off C-Corporations?

Saturday - 3/16/2013, 4:30pm  ET

MLPs are all the rage in the energy sector, and several companies want to get into the game by spinning off assets into an MLP strucutre. But contributor Tyler Crowe sees a few companies trying their hand at the other direction and spin off some of their assets into C corporations. Linn Energy was one of the leading companies to try its hand at spinning off a C-corp with its IPO of LinnCo back in October. Now some others are looking at it as well.

In this video, Tyler and Aimee Duffy discuss how these moves not only help companies raise more capital, but how they also provide a vehicle for institutional investors to get in the game and facilitate acquisitions. Investors should keep a sharp eye on upstream MLPs like these -- not only because of share dilution, but also because some of the risks the upstream sectors has that could pose a larger threat to an MLP.

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