Filed pursuant to Rule 497(c) under
the Securities Act of 1933, As Amended
File no. 333-146095

Subject to Completion

Preliminary Prospectus Supplement dated September 24, 2008

 

PROSPECTUS SUPPLEMENT

(To prospectus dated February 12, 2008)

 

           Shares

 

Tortoise Energy Infrastructure Corporation

 

Common Stock

 

 

 

 

We are offering           shares of our common stock. We seek to provide our stockholders with an efficient vehicle to invest in a portfolio of publicly traded master limited partnerships (“MLPs”) and in the energy infrastructure sector. Our investment objective is to seek a high level of total return with an emphasis on current distributions paid to stockholders. We are a nondiversified, closed-end management investment company. This prospectus supplement, together with the accompanying prospectus dated February 12, 2008, sets forth the information that you should know before investing.

 

Our currently outstanding shares of common stock are, and the shares offered in this prospectus supplement and accompanying prospectus will be, listed on the New York Stock Exchange under the symbol “TYG.” The last reported sale price of our common stock on September 23, 2008 was $27.78 per share. The net asset value (“NAV”) per share of our common stock at the close of business on September 23, 2008 was $23.05.

 

Investing in our common stock involves risks that are described in the “Risk Factors” section beginning on page 30 of the accompanying prospectus.

 

 

 

 

 

 

 

We have granted the underwriters the option to purchase up to an additional           shares of common stock from us at the public offering price, less the underwriting discount, to cover over-allotments, if any, within      days from the date of this prospectus supplement. If the underwriters exercise their overallotment option, the total public offering price will be $      and the total underwriting discount will be $     . The proceeds to us will then be $     , before deducting offering expenses.

 

Neither the Securities and Exchange Commission nor any State Securities Commission has approved or disapproved of these securities or determined if this prospectus supplement or accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

The shares will be ready for delivery to purchasers on or about           , 2008.

 

 

 

Joint Book-Running Managers

 

 

Co-Managers

 

 

 

The date of this prospectus supplement is September   , 2008.

TABLE OF CONTENTS

 

Prospectus Supplement

 

 

 

You should rely only on the information contained or incorporated by reference in this prospectus supplement, the accompanying prospectus and in the statement of additional information. We have not, and the underwriters have not, authorized anyone to provide you with different information. We are not making an offer of these securities where the offer is not permitted. The information appearing in this prospectus supplement, the accompanying prospectus and in the statement of additional information is accurate only as of the dates on their respective covers. Our business, financial condition and prospects may have changed since such dates. We will advise investors of any material changes to the extent required by applicable law.

 

This prospectus supplement, the accompanying prospectus and the statement of additional information contain forward-looking statements. Forward-looking statements can be identified by the words “may,” “will,” “intend,” “expect,” “estimate,” “continue,” “plan,” “anticipate,” and similar terms and the negative of such terms. Such forward-looking statements may be contained in this prospectus supplement as well as in the accompanying prospectus. By their nature, all forward-looking statements involve risks and uncertainties, and actual results could differ materially from those contemplated by the forward-looking statements. Several factors that could materially affect our actual results are the performance of the portfolio of securities we hold, the conditions in the U.S. and international financial, petroleum and other markets, the price at which our shares will trade in the public markets and other factors discussed in our periodic filings with the Securities and Exchange Commission (the “SEC”).

 

Although we believe that the expectations expressed in our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and are subject to inherent risks and uncertainties, such as those disclosed in the “Risk Factors” section of the prospectus accompanying this prospectus supplement and the “Recent Market Turmoil” section in the Summary of this prospectus supplement. All forward-looking statements contained or incorporated by reference in this prospectus supplement or the accompanying prospectus are made as of the date of this prospectus supplement or the accompanying prospectus, as the case may be. Except for our ongoing obligations under the federal securities laws, we do not intend, and we undertake no obligation, to update any forward-looking statement. The forward-looking statements contained in this prospectus supplement and the accompanying prospectus are excluded from the safe harbor protection provided by Section 27A of the Securities Act of 1933, as amended (the “1933 Act”).

 

Currently known risk factors that could cause actual results to differ materially from our expectations include, but are not limited to, the factors described in the “Risk Factors” section of the prospectus accompanying this prospectus supplement and the “Recent Market Turmoil” section in the Summary of this prospectus supplement. We urge you to review carefully these sections for a more complete discussion of the risks of an investment in our common stock.

 

PROSPECTUS SUPPLEMENT SUMMARY

The Company		We seek to provide our stockholders with an efficient vehicle to invest in a portfolio of publicly traded master limited partnerships (“MLPs”) in the energy infrastructure sector. Our investment objective is to seek a high level of total return with an emphasis on current distributions paid to stockholders. For purposes of our investment objective, total return includes capital appreciation of, and all distributions received from, securities in which we invest regardless of the tax character of the distributions. Similar to the tax characterization of distributions made by MLPs to unitholders, a significant portion of our distributions to stockholders are expected to be treated as a return of capital to stockholders.
		We are a nondiversified, closed-end management investment company. We commenced operations in February 2004 following our initial public offering. We were the first publicly traded investment company offering access to a portfolio of MLPs. Since that time, we have completed seven additional offerings of common stock. As of the date of this prospectus supplement, we have $70 million of preferred stock, consisting of two series designated as “Tortoise Auction Preferred Shares” (the “Tortoise Preferred Shares”), outstanding. As of the date of this prospectus supplement, we have $60 million of Auction Rate Senior Notes and $150 million of Senior Notes (collectively with the Auction Rate Senior Notes, the “Tortoise Notes”), outstanding. None of our outstanding auction rate securities are presently subject to the 7-day or 28-day auctions, but are subject to extended dividend periods which end on dates ranging from September 2010 to September 2012 in order to reduce our exposure to LIBOR rates. We may borrow from time to time using our unsecured credit facility. As of the date of this prospectus supplement, we had approximately $63.0 million outstanding under our credit facility. We have a fiscal year ending November 30.
		We expect to distribute substantially all of our distributable cash flow (“DCF”) to holders of common stock through quarterly distributions. DCF is the amount we receive as cash or paid-in-kind distributions from MLPs or their affiliates, and interest payments received on debt securities owned by us, less current or anticipated operating expenses, current taxes on our taxable income, and leverage costs paid by us (including leverage costs of the Tortoise Notes and Tortoise Preferred Shares). Our Board of Directors adopted a policy to target distributions to common stockholders in an amount of at least 95% of DCF on an annual basis.
Investment Adviser		Tortoise Capital Advisors, L.L.C. (the “Adviser”) serves as our investment adviser. The Adviser specializes in managing portfolios of investments in MLPs and other energy companies. The Adviser was formed in October 2002 to provide portfolio management services to institutional and high-net-worth investors seeking professional management of their MLP investments. As of August 31, 2008, the Adviser had approximately $2.7 billion of client assets under management. The Adviser’s investment committee is

		comprised of five portfolio managers. See “Management of the Company” in the accompanying prospectus.
		The principal business address of the Adviser is 11550 Ash Street, Suite 300, Leawood, Kansas 66211.

 

The Offering

Common stock offered		shares
Shares outstanding after the offering		shares(1)
Use of proceeds		We estimate that our net proceeds from this offering after expenses without exercise of the overallotment option will be approximately $       . We intend to use these net proceeds to retire a portion of our short-term debt outstanding under our credit facility, to acquire equity portfolio securities in pursuit of our investment objective and policies or for working capital purposes. See “Use of Proceeds.”
Risk factors		See the section below titled “Recent Market Turmoil” and “Risk Factors” and other information included in the accompanying prospectus for a discussion of factors you should carefully consider before deciding to invest in shares of our common stock.
NYSE symbol		“TYG”

	(1)	The number of shares outstanding after the offering assumes the underwriters’ overallotment option is not exercised. If the overallotment option is exercised in full, we will issue and sell an additional        shares.

Stockholder transaction expenses:
Sales load (as a percentage of offering price)		%
Offering expenses borne by us (as a percentage of offering price)		%
Dividend reinvestment plan fees(1)		None

	(1)	Stockholders will pay a transaction fee plus brokerage charges if they direct the Plan Agent to sell common stock held in a dividend reinvestment account. See “Automatic Dividend Reinvestment Plan” in the accompanying prospectus.

Example		This example replaces the example as set forth on page 8 of the accompanying prospectus with respect to this offering.
		The following example illustrates the expenses that common stockholders would pay on a $1,000 investment in common stock assuming (1) a sales load of     % and offering expenses of     % of the offering price in year 1; (2) total annual expenses of 12.72% of net assets attributable to common shares in year 1 and increasing to 12.80% in years 2 through 10; (3) a 5% annual return; and (4) all distributions are reinvested at net asset value:

1 Year

3 Years

5 Years

10 Years

Total Expenses Paid by Common Stockholders(1)

$

$

$

$

(1)		Includes deferred income tax expense.

 

Recent Developments		On July 23, 2008, we redeemed the remaining outstanding portion of our Series IV Auction Rate Preferred Shares in the amount of $30 million.
		On July 24, 2008, we redeemed the remaining outstanding portion of our Series III Auction Rate Preferred Shares in the amount of $35 million.
		On September 2, 2008, we paid a distribution in the amount of $0.56 per common share, for a total of $12,477,934. Of this total, the distribution reinvestment amounted to $1,732,431.
		On September 12, 2008, we fully redeemed our Series B Auction Rate Senior Notes in the amount of $50 million.
Recent Market Turmoil		The week ending September 19, 2008, was a period of unprecedented global financial market turmoil following the bankruptcy filing of Lehman Brothers Holdings Inc. (“Lehman Brothers”), the U.S. government bail-out of American International Group, Inc., and news of credit and valuation issues involving money market mutual funds. These events contributed to severe market volatility and caused severe liquidity strains in the credit markets. The U.S. government announced a plan for providing a guarantee to participating money market funds, and both the U.S. and U.K. governments announced emergency measures banning short-selling. The global financial market turmoil and liquidity crisis have adversely impacted our net asset value and market price and have resulted in heightened volatility of our stock price and the performance of our portfolio investments. In addition, one month LIBOR rates have increased, which has increased the cost of our short-term borrowing under our line of credit.
		The markets for auction rate securities have continued to experience failed auctions. A failed auction results when there are not enough bidders in the auction at rates below the maximum rate as prescribed by the terms of the security. When an auction fails, the rate is automatically set at the maximum rate. A failed auction does not cause an acceleration of, or otherwise have any impact on, outstanding principal amounts due, or in the case of preferred stock, the security’s liquidation preference. In the case of our outstanding auction rate securities, the maximum rate under the terms of those securities has been two hundred percent of the greater of: (i) the applicable AA Composite Commercial Paper Rate or the applicable Treasury Index Rate or (ii) the applicable LIBOR.
		As a result of the developments in the auction markets, we have taken steps to reduce our exposure to the uncertainty and volatility of the auction markets, including refinancing some of our auction rate securities with privately placed Senior Notes. Of our $280 million in long-term leverage outstanding, $60 million of Auction Rate Senior Notes and $70 million of liquidation value of Tortoise Preferred Shares remain in the auction rate market. None of our outstanding auction rate securities are presently subject to the 7-day or 28-day auctions, but are subject to extended dividend periods which end on dates ranging from September 2010 to September 2012 in order to reduce our exposure to LIBOR rates. We may issue additional senior securities, including Senior Notes, to refinance our remaining auction rate securities. Common stockholders will bear the costs of these

		refinancing efforts. Our current leverage structure is set forth in the capitalization table beginning on page S-5.
		Since our last shareholder report dated May 31, 2008, our net asset value has declined from $30.35 to $23.05, which represents a 24% decline. As the net asset value of our portfolio declines, there is an increased risk that we will be unable to maintain coverage ratios for notes and preferred stock mandated by the Investment Company Act of 1940, as amended (the “1940 Act”). Rating Agency Guidelines for our auction rate securities and the contractual terms of bank lending facilities or privately placed Senior Notes impose additional maintenance requirements. As of September 23, 2008, our 1940 Act asset coverage with respect to senior securities representing indebtedness was 314% and our 1940 Act asset coverage with respect to preferred stock was 250%. During any period when we do not maintain asset coverage of 300% with respect to senior securities representing indebtedness and 200% with respect to senior securities representing stock, each as calculated in accordance with the 1940 Act, we are not permitted to declare distributions on our common stock. In addition, if we fail to comply with asset coverage tests set forth in the Rating Agency Guidelines or contractual terms of bank lending facilities or privately placed Senior Notes, and do not cure any deficiencies within specified cure periods, we will be required to redeem such senior securities in amounts that are sufficient to restore the required coverage ratios or, in some cases, offer to redeem all of such securities. As a result, we may be required to sell portfolio securities at inopportune times, and we may incur significant losses upon the sale of such securities.
		If the dislocations in the credit markets continue, our leverage costs may increase and there is a risk that we may not be able to renew or replace existing leverage on favorable terms or at all. Because senior debt is subject to stricter coverage requirements than preferred stock, we may not be able to maintain leverage at historical levels if a viable alternative for auction rate preferred stock does not develop. If the cost of leverage is no longer favorable, or if we are otherwise required to reduce our leverage, we may not be able to maintain common stock distributions at historical levels and common stockholders will bear any costs associated with selling portfolio securities.
Recent Events — Energy Infrastructure Industry		Higher commodity goods prices and a slowing economy may adversely impact consumption of refined products, which in turn, could impact certain of the companies in which we invest. The Lehman Brothers bankruptcy filing has fueled concerns regarding a potential massive liquidation of commodity futures and options positions. The long-term impact of recent hurricanes in the Texas Gulf Coast area on the energy infrastructure industry is still being determined.

 

We estimate that we will receive net proceeds from this offering of approximately $           after deducting the underwriting discount and our estimated offering expenses, or $           if the underwriters exercise their overallotment option in full.

 

We intend to use the net proceeds of this offering to retire a portion of our short-term debt outstanding under our credit facility, to acquire equity portfolio securities in pursuit of our investment objective and policies or for working capital purposes. Outstanding balances under our credit facility generally accrue interest at a variable annual rate equal to one-month LIBOR plus 0.75%. As of the date of this prospectus supplement, the current rate is 4.18%. The credit facility remains in effect through March 20, 2009, and we may draw on the facility from time to time in accordance with our investment policies, to refinance a portion of our outstanding leverage and for working capital purposes. As of the date of this prospectus supplement, we had approximately $63 million outstanding under our credit facility.

 

The following table sets forth our capitalization: (i) as of May 31, 2008, (ii) pro forma to reflect the subsequent borrowing under our credit facility through September 22, 2008, the issuance of 1,600,000 shares of common stock on June 19, 2008, the redemption of our Series IV MMP Shares ($30 million aggregate liquidation preference) on July 23, 2008, the redemption of our Series III MMP Shares ($35 million aggregate liquidation preference) on July 24, 2008, the redemption of our Series B Tortoise Notes ($50 million aggregate principal amount) on September 12, 2008 and the issuance of 107,914 shares of common stock pursuant to our dividend reinvestment plan on June 2, 2008 and September 2, 2008; and (iii) pro forma as adjusted to give effect to the issuance of the common shares offered hereby. As indicated below, common stockholders will bear the offering costs associated with this offering.

 

 

 

 

footnotes continued on the following page

 

Information contained in the table below under the heading “Per Common Share Data” and “Supplemental Data and Ratios” shows our per common share operating performance. Except when noted, the information in this table is derived from our financial statements audited by Ernst & Young LLP, whose report on such financial statements is contained in our 2007 Annual Report and incorporated by reference into the statement of additional information, both of which are available from us upon request. The information as of May 31, 2008 and for the period from December 1, 2007 through May 31, 2008 appears in our unaudited interim financial statements as filed with the SEC in our most recent stockholder report for the period ended May 31, 2008. See “Where You Can Find More Information” in this prospectus supplement.

 

FINANCIAL HIGHLIGHTS — (Continued)

 

 

 

 

FINANCIAL HIGHLIGHTS — (Continued)

 

 

 

The underwriters named below, acting through their representatives, Stifel, Nicolaus & Company, Incorporated, Oppenheimer & Co. Inc. and RBC Capital Markets (“Representatives”), are acting as underwriters in this offering. Subject to the terms and conditions contained in the underwriting agreement by and among the underwriters, the Adviser and us, the underwriters have agreed to purchase from us, and we have agreed to sell to the underwriters, the number of common shares set forth opposite their names below.

 

 

The underwriting agreement provides that the underwriters, severally and not jointly, are obligated to purchase, subject to certain conditions, all of the common shares being offered. The conditions contained in the underwriting agreement include requirements that (1) the representations and warranties made by us and the Adviser to the underwriters are true; (2) there has been no material change in the financial markets; and (3) we and the Adviser deliver customary closing documents to the underwriters.

 

We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the 1933 Act, or to contribute to payments the underwriters may be required to make in respect of those liabilities; provided that such indemnification shall not extend to any liability or action resulting from the gross negligence or willful misconduct of the underwriters.

 

The underwriters are offering the shares of common stock, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel, including the validity of the shares, and other conditions contained in the underwriting agreement, such as the receipt by the underwriters of officer’s certificates and legal opinions. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.

 

Commissions and Discounts

 

The underwriters have advised us that they propose initially to offer the shares to the public at the public offering price on the cover page of this prospectus supplement and to dealers at that price less a concession not in excess of $      per share. The underwriters may allow, and the dealers may reallow, a discount not in excess of $      per share to other dealers. After the initial public offering, the public offering price, concession and discount may be changed.

 

The following table shows the per share and total public offering price, underwriting discount and proceeds before offering expenses to us. The information assumes either no exercise or full exercise by the underwriters of the overallotment option.

 

 

The expenses of the offering are estimated to be $115,000, all of which will be borne by us. Investors must pay for any shares purchased in this offering on or before        , 2008.

 

Overallotment Option

 

We have granted an option to the underwriters to purchase up to an additional           shares at the public offering price less the underwriting discount. The underwriters may exercise this option for      days from the date of this prospectus supplement solely to cover any overallotments. If the underwriters exercise this option, they will be obligated, subject to conditions contained in the underwriting agreement, to purchase such additional

shares of common stock, and we will be obligated, pursuant to that option, to sell these shares of common stock to the underwriters.

 

Lock-Up Agreement

 

We have agreed not to offer or sell any additional shares of common stock for a period of 90 days after the date of the underwriting agreement without first obtaining the written consent of the Representatives, except for the sale of common stock to the underwriters pursuant to the underwriting agreement or common stock issued pursuant to our dividend reinvestment plan. Specifically, we have agreed, with certain limited exceptions, not to directly or indirectly

 

 

New York Stock Exchange Listing

 

Our currently outstanding shares of common stock are, and the shares of common stock sold pursuant to this prospectus supplement and the accompanying prospectus will be, listed on the New York Stock Exchange under the symbol “TYG.”

 

Price Stabilization, Short Positions

 

Until the distribution of the shares is completed, SEC rules may limit the underwriters and selling group members from bidding for and purchasing our common stock. However, the underwriters may engage in transactions that stabilize the price of the common stock, such as bids or purchases to peg, fix or maintain that price.

 

In connection with the offering, the underwriters may purchase and sell our common stock in the open market. These transactions may include short sales, purchases on the open market to cover positions created by short sales and stabilizing transactions. Short sales involve the sale by the underwriters of a greater number of shares than they are required to purchase in the offering. “Covered” short sales are sales made in an amount not greater than the underwriters’ option to purchase additional shares in the offering. The underwriters may close out any covered short position by either exercising their overallotment option or purchasing shares in the open market. In determining the source of shares to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the overallotment option. “Naked” short sales are sales in excess of the overallotment option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of our common stock in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of shares of common stock made by the underwriter in the open market prior to the completion of the offering.

 

Similar to other purchase transactions, the underwriters’ purchases to cover the syndicate short sales may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the market price of our common stock. As a result, the price of our common stock may be higher than the price that might otherwise exist in the open market.

Neither we nor the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of our common stock. In addition, neither we nor the underwriters make any representation that the underwriters will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.

 

Other Relationships

 

Some of the underwriters and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with us. They have received customary fees and commissions for these transactions.

 

Electronic Distribution

 

The prospectus supplement and the accompanying prospectus in electronic format may be made available on the Internet sites or through other online services maintained by the underwriters or their affiliates. In those cases, prospective investors may view offering terms online and prospective investors may be allowed to place orders online. The underwriters may allocate a specific number of common shares for sale to online brokerage account holders. Any such allocation for online distributions will be made by the Representatives on the same basis as other allocations.

 

Other than this prospectus supplement and the accompanying prospectus in electronic format, the information on the underwriters’ web sites and any information contained in any other web site maintained by the underwriters are not part of this prospectus supplement, the accompanying prospectus or the registration statement of which this prospectus supplement and the accompanying prospectus form a part, and have not been approved and/or endorsed by us and should not be relied upon by prospective investors.

 

Certain Relationships and Fees

 

To the extent permitted under the 1940 Act and the rules and regulations promulgated thereunder, we anticipate that an underwriter may from time to time act as a broker or dealer and receive fees in connection with the execution of our portfolio transactions after an underwriter has ceased to be an underwriter and, subject to certain restrictions, may act as a broker while it is an underwriter.

 

Addresses

 

Stifel, Nicolaus & Company, Incorporated’s principal office is located at 501 North Broadway, St. Louis, Missouri 63102.

 

Oppenheimer & Co.’s principal office is located at 125 Broad Street, New York, New York 10004.

 

RBC Capital Markets’ principal office is located at 1221 Avenue of the Americas, New York, New York 10036.

 

Certain legal matters in connection with the securities offered hereby will be passed upon for us by Vedder Price P.C. (“Vedder Price”), Chicago, Illinois. Certain legal matters in connection with the securities offered hereby will be passed upon for the underwriters by Andrews Kurth LLP (“Andrews Kurth”), New York, New York. Vedder Price and Andrews Kurth may rely on the opinion of Venable LLP, Baltimore, Maryland, on certain matters of Maryland law.

 

We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the 1940 Act and are required to file reports, including annual and semi-annual reports, proxy statements and other information with the SEC. We voluntarily file quarterly shareholder reports. Our most recent shareholder report filed with the SEC is for the period ended May 31, 2008 and is incorporated by reference into our statement of additional information. These documents are available on the SEC’s EDGAR system and can be inspected and copied for a fee at the SEC’s public reference room, 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Additional information about the operation of the public reference room facilities may be obtained by calling the SEC at (202) 551-5850.

 

This prospectus supplement and the accompanying prospectus do not contain all of the information in our registration statement, including amendments, exhibits, and schedules. Statements in this prospectus supplement and the accompanying prospectus about the contents of any contract or other document are not necessarily complete and in each instance reference is made to the copy of the contract or other document filed as an exhibit to the registration statement, each such statement being qualified in all respects by this reference.

 

Additional information about us can be found on our Adviser’s website at www.tortoiseadvisors.com and in our registration statement (including amendments, exhibits, and schedules) on Form N-2 filed with the SEC. Information included on our Adviser’s website does not form part of this prospectus supplement. The SEC maintains a web site (http://www.sec.gov) that contains our registration statement, other documents incorporated by reference, and other information we have filed electronically with the SEC, including proxy statements and reports filed under the Exchange Act.

 

$375,000,000
Tortoise Energy Infrastructure Corporation
Common Stock
Preferred Stock
Debt Securities

 

Tortoise Energy Infrastructure Corporation (the “Company,” “we” or “our”) is a nondiversified, closed-end management investment company. Our investment objective is to seek a high level of total return with an emphasis on current distributions paid to stockholders. We seek to provide our stockholders with an efficient vehicle to invest in a portfolio of publicly traded master limited partnerships (“MLPs”) in the energy infrastructure sector. Under normal circumstances, we invest at least 90% of our total assets (including assets obtained through leverage) in securities of energy infrastructure companies and invest at least 70% of our total assets in equity securities of MLPs. We cannot assure you that we will achieve our investment objective. Unlike most investment companies, we have not elected to be treated as a regulated investment company under the Internal Revenue Code.

 

We may offer, on an immediate, continuous or delayed basis, up to $375,000,000 aggregate initial offering price of our common stock ($0.001 par value per share), preferred stock ($0.001 par value per share) or debt securities, which we refer to in this prospectus collectively as our securities, in one or more offerings. We may offer our common stock, preferred stock and debt securities separately or together, in amounts, at prices and on terms set forth in a prospectus supplement to this prospectus. In addition, from time to time, certain of our stockholders may offer our common stock in one or more offerings. The sale of such stock by certain of our stockholders may involve shares of common stock that were issued to the stockholders in one or more private transactions and will be registered by us for resale. The identity of any selling stockholder, the number of shares of our common stock to be offered by such selling stockholder, the price and terms upon which our shares of common stock are to be sold from time to time by such selling stockholder, and the percentage of common stock held by any selling stockholder after the offering, will be set forth in a prospectus supplement to this prospectus. You should read this prospectus and the related prospectus supplement carefully before you decide to invest in any of our securities.

 

We may offer our securities, or certain of our stockholders may offer our common stock, directly to one or more purchasers, through agents that we or they designate from time to time, or to or through underwriters or dealers. The prospectus supplement relating to the particular offering will identify any agents or underwriters involved in the sale of our securities, and will set forth any applicable purchase price, fee, commission or discount arrangement between us or any selling stockholder and such agents or underwriters or among the underwriters or the basis upon which such amount may be calculated. For more information about the manner in which we may offer our securities, or a selling stockholder may offer our common stock, see “Plan of Distribution” and “Selling Stockholders.” Our securities may not be sold through agents, underwriters or dealers without delivery of a prospectus supplement.

 

Our common stock is listed on the New York Stock Exchange under the symbol “TYG.” As of February 12, 2008, the last reported sale price for our common stock was $34.10.

 

Investing in our securities involves certain risks.  You could lose some or all of your investment. See “Risk Factors” beginning on page 30 of this prospectus. You should consider carefully these risks together with all of the other information contained in this prospectus and any prospectus supplement before making a decision to purchase our securities.

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

 

Prospectus dated February 12, 2008

This prospectus, together with any prospectus supplement, sets forth concisely the information that you should know before investing. You should read the prospectus and prospectus supplement, which contain important information, before deciding whether to invest in our securities. You should retain the prospectus and prospectus supplement for future reference. A statement of additional information, dated February 12, 2008, as supplemented from time to time, containing additional information, has been filed with the Securities and Exchange Commission (“SEC”) and is incorporated by reference in its entirety into this prospectus. You may request a free copy of the statement of additional information, the table of contents of which is on page 63 of this prospectus, request a free copy of our annual, semi-annual and quarterly reports, request other information or make stockholder inquiries, by calling toll-free 1-866-362-9331 or by writing to us at 10801 Mastin Boulevard, Suite 222, Overland Park, Kansas 66210. Our annual, semi-annual and quarterly reports and the statement of additional information also are available on our investment adviser’s website at www.tortoiseadvisors.com. Information included on our website does not form part of this prospectus. You can review and copy documents we have filed at the SEC’s Public Reference Room in Washington, D.C. Call 1-202-551-5850 for information. The SEC charges a fee for copies. You can get the same information free from the SEC’s website (http://www.sec.gov). You may also e-mail requests for these documents to publicinfo@sec.gov or make a request in writing to the SEC’s Public Reference Section, 100 F Street, N.E., Room 1580, Washington, D.C. 20549.

 

Our securities do not represent a deposit or obligation of, and are not guaranteed or endorsed by, any bank or other insured depository institution and are not federally insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency.

TABLE OF CONTENTS

 

 

You should rely only on the information contained or incorporated by reference in this prospectus and any related prospectus supplement in making your investment decisions. We have not authorized any other person to provide you with different or inconsistent information. If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus and any prospectus supplement do not constitute an offer to sell or solicitation of an offer to buy any securities in any jurisdiction where the offer or sale is not permitted. The information appearing in this prospectus and in any prospectus supplement is accurate only as of the dates on their covers. Our business, financial condition and prospects may have changed since such dates. We will advise investors of any material changes to the extent required by applicable law.

CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

 

This prospectus, any accompanying prospectus supplement and the statement of additional information contain “forward-looking statements.” Forward-looking statements can be identified by the words “may,” “will,” “intend,” “expect,” “estimate,” “continue,” “plan,” “anticipate,” and similar terms and the negative of such terms. Such forward-looking statements may be contained in this prospectus as well as in any accompanying prospectus supplement. By their nature, all forward-looking statements involve risks and uncertainties, and actual results could differ materially from those contemplated by the forward-looking statements. Several factors that could materially affect our actual results are the performance of the portfolio of securities we hold, the conditions in the U.S. and international financial, petroleum and other markets, the price at which our shares will trade in the public markets and other factors discussed in our periodic filings with the Securities and Exchange Commission (the “SEC”).

 

Although we believe that the expectations expressed in our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and are subject to inherent risks and uncertainties, such as those disclosed in the “Risk Factors” section of this prospectus. All forward-looking statements contained or incorporated by reference in this prospectus or any accompanying prospectus supplement are made as of the date of this prospectus or the accompanying prospectus supplement, as the case may be. Except for our ongoing obligations under the federal securities laws, we do not intend, and we undertake no obligation, to update any forward-looking statement. The forward-looking statements contained in this prospectus and any accompanying prospectus supplement are excluded from the safe harbor protection provided by Section 27A of the Securities Act of 1933, as amended (the “1933 Act”).

 

Currently known risk factors that could cause actual results to differ materially from our expectations include, but are not limited to, the factors described in the “Risk Factors” section of this prospectus. We urge you to review carefully that section for a more detailed discussion of the risks of an investment in our securities.

 

PROSPECTUS SUMMARY

	•	We may invest up to 30% of our total assets in restricted securities, primarily through direct placements. Subject to this policy, we may invest without limitation in illiquid securities. The types of restricted securities that we may purchase include securities of private energy infrastructure companies and privately issued securities of publicly traded energy infrastructure companies. Restricted securities, whether issued by public companies or private companies, are generally considered illiquid. Investments in private companies that do not have any publicly traded shares or units are limited to 5% of total assets.
	•	We may invest up to 25% of our total assets in debt securities of energy infrastructure companies, including securities rated below investment grade (commonly referred to as “junk bonds”). Below investment grade debt securities will be rated at least B3 by Moody’s Investors Service, Inc. (“Moody’s”) and at least B- by Standard & Poor’s Ratings Group (“S&P”) at the time of purchase, or comparably rated by another statistical rating organization or if unrated, determined to be of comparable quality by the Adviser.
	•	We will not invest more than 10% of total assets in any single issuer.
	•	We will not engage in short sales.

 

The following table and example contain information about the costs and expenses that common stockholders will bear directly or indirectly. In accordance with SEC requirements, the table below shows our expenses, including leverage costs, as a percentage of our net assets as of November 30, 2007, and not as a percentage of gross assets or Managed Assets. By showing expenses as a percentage of net assets, expenses are not expressed as a percentage of all of the assets we invest. The table and example are based on our capital structure as of November 30, 2007. As of that date, we had $458,050,000 in senior securities outstanding, including Tortoise Preferred Shares with an aggregate liquidation preference of $185 million, Tortoise Notes in an aggregate principal amount of $235 million and $38,050,000 outstanding under our unsecured credit facility as of that date. Such senior securities represented 36.3% of total assets as of November 30, 2007.

 

Stockholder Transaction Expense

 

 

 

Example:

 

The following example illustrates the expenses that common stockholders would pay on a $1,000 investment in common stock, assuming (1) total annual expenses of 13.58% of net assets attributable to common shares in year 1 and increasing to 13.78% in years 2 through 10; (2) a 5% annual return; and (iii) all distributions are reinvested at NAV:

 

 

The example should not be considered a representation of future expenses. Actual expenses may be greater or less than those assumed. Moreover, our actual rate of return may be greater or less than the hypothetical 5% return shown in the example.

 

 

 

 

 

(a) Leverage Costs are calculated as described in Note 3 above.

 

(b) Other Expenses are based on amounts incurred for the fiscal year ended November 30, 2007.

 

 

 

The purpose of the table and the example above is to help investors understand the fees and expenses that they, as common stockholders, would bear directly or indirectly. For additional information with respect to our expenses, see “Management of the Company.”

 

Information contained in the table below under the heading “Per Common Share Data” and “Supplemental Data and Ratios” shows our per common share operating performance. The information in this table is derived from our financial statements audited by Ernst & Young LLP, whose report on such financial statements is contained in our 2007 Annual Report and is incorporated by reference into the statement of additional information, both of which are available from us upon request. See “Available Information” in this prospectus.

 

 

 

 

The following table sets forth information about our outstanding senior securities as of each fiscal year ended November 30 since our inception:

 

 

 

 

Our common stock is listed on the New York Stock Exchange (“NYSE”) under the symbol “TYG.” Shares of our common stock commenced trading on the NYSE on February 25, 2004.

 

Our common stock has a limited trading history and has traded both at a premium and at a discount in relation to NAV. We cannot predict whether our shares will trade in the future at a premium or discount to NAV. The provisions of the 1940 Act generally require that the public offering price of common stock (less any underwriting commissions and discounts) must equal or exceed the NAV per share of a company’s common stock (calculated within 48 hours of pricing). However, at our Annual Meeting of Stockholders held on April 13, 2007, our common stockholders granted to us the authority to sell shares of our common stock for less than NAV, subject to certain conditions. Our issuance of common stock may have an adverse effect on prices in the secondary market for our common stock by increasing the number of shares of common stock available, which may put downward pressure on the market price for our common stock. The continued development of alternatives as vehicles for investing in a portfolio of energy infrastructure MLPs, including other publicly traded investment companies and private funds, may reduce or eliminate any tendency of our shares of common stock to trade at a premium in the future. Shares of common stock of closed-end investment companies frequently trade at a discount from NAV. See “Risk Factors — Additional Risks to Common Stockholders — Market Discount Risk.”

The following table sets forth for each of the periods indicated the high and low closing market prices for our shares of common stock on the NYSE, the NAV per share and the premium or discount to NAV per share at which our shares of common stock were trading. NAV is generally determined on the last business day of each calendar month. See “Determination of Net Asset Value” for information as to the determination of our NAV.

 

 

 

Source: Bloomberg Financial and Fund Accounting Records.

 

 

The last reported sale price, NAV per share and percentage premium to NAV per share of our common stock on February 12, 2008 were $34.10, $32.34 and 5.44%, respectively. As of February 12, 2008, we had 19,087,891 shares of our common stock outstanding and net assets of approximately $617,348,496.

 

Unless otherwise specified in a prospectus supplement, we will invest the net proceeds of any sales of securities in accordance with our investment objective and policies as described under “Investment Objective and Principal Investment Strategies” within approximately 3 months of receipt of such proceeds. We may also use proceeds from the sale of our securities to retire all or a portion of any debt we incur under our unsecured credit facility in pursuit of our investment objective and policies, retire or redeem other senior securities, and for working capital purposes, including the payment of distributions, interest and operating expenses, although there is currently no intent to issue securities primarily for this purpose. Our investments may be delayed if suitable investments are unavailable at the time or for other reasons. Pending such investment, we anticipate that we will invest the proceeds in securities issued by the U.S. government or its agencies or instrumentalities or in high quality, short-term or long-term debt obligations. A delay in the anticipated use of proceeds could lower returns, reduce our distribution to common stockholders and reduce the amount of cash available to make dividend and interest payments on preferred stock and debt securities, respectively. We will not receive any of the proceeds from a sale of our common stock by any selling stockholder.

 

We are a nondiversified, closed-end management investment company registered under the 1940 Act. We were organized as a corporation on October 30, 2003, pursuant to a charter (the “Charter”) governed by the laws of the State of Maryland. Our fiscal year ends on November 30. In our initial public offering on February 27, 2004, and the exercise of subsequent overallotment options, we raised aggregate gross proceeds of $315,000,000. We completed five additional offerings of common stock in December 2004, August 2006, December 2006, March 2007 and December 2007. As of November 30, 2007, we had net assets of $618,412,176 attributable to our common stock. Our common stock is listed on the NYSE under the symbol “TYG.” As of the date of this prospectus, we have four series of Tortoise Notes and four series of Tortoise Preferred Shares outstanding. The outstanding Tortoise Notes are rated “Aaa” and “AAA” by Moody’s Investors Service Inc. (“Moody’s”) and Fitch Ratings (“Fitch”), respectively. The outstanding Tortoise Preferred Shares are rated “Aa2” and “AA” by Moody’s and Fitch, respectively.

 

The following table provides information about our outstanding securities as of November 30, 2007: