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Implicit in most master limited partnership initial public offerings is growth in the underlying distribution paid to investors on the purchase of assets from the parent. Westlake Chemical has made the symbiotic relationship more explicit on the spin-off of its ethylene operations, Westlake Chemical Partners.
Historically low cost of debt has been a boon for corporate M&A by allowing progressively higher debt multiples to be paid for targets. Tyson Foods and its proposed purchase of Hillshire Foods for US$8.55bn, a 16.7-times multiple of adjusted Ebitda, is a case in point of willingness to leverage up-front on the promise of shareholder value over the longer term.
Cybersecurity specialist KEYW Holding turned the corner on its detractors with an overnight, US$130m five-year CB. Highlighting management’s bullish outlook the company offset dilution to premium share prices by spending US$16m to fund a call-spread overlay.