Some Possible Logic Behind The KMR-KMP Yield Spread
While KMR and KMP have both proved to be highly lucrative investments for unit-holders, the persistent yield/price spread between the two has led some to suggest KMR is a better value, and even further that this spread should eventually close, implying greater potential upside for KMR.A bit of background. KMP and KMR represent partnership units in Kinder Morgan Energy Partners. KMP is a traditional MLP vehicle (meaning you get a K-1 come tax time) that pays cash "distributions" to individuals. KMR is identical in ownership rights and distribution amounts to KMP, except it is structured as an "I-share," which pays distributions as fractional shares - in other words, KMR DRIPs for you automatically. KMR unit-holders do not receive K-1 forms, and KMR shares are better suited for some retirement accounts.Now to the question at hand. In theory, KMR and KMP should trade at par, yet there has beenComplete Story »
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