Throughout 2017, discussions on poor MLP market performance were paired with discussions on balance sheet stability and conservative financial measures. While some MLPs did cut their famous distributions, most continued to raise them.

However, given that Wall Street did not see fit to reward such previously-acclaimed moves, some MLP management teams have begun to explore a different track.

The traditional MLP financing model involves raising debt and equity for each new project because all cash flows after maintenance and other expenses are paid out to investors in the form of distributions. However, there is nothing magic about the cash MLPs received; they’re not legally mandated to pay out a certain portion of cash flows like other structures, such as real estate investment trusts.

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