UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


 
FORM N-Q
 
 
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY
 




Investment Company Act file number 811-21725



Tortoise Energy Capital Corporation
(Exact name of registrant as specified in charter)


11550 Ash Street, Suite 300, Leawood, KS 66211
(Address of principal executive offices) (Zip code)



David J. Schulte
11550 Ash Street, Suite 300, Leawood, KS 66211

(Name and address of agent for service)



913-981-1020
Registrant's telephone number, including area code



Date of fiscal year end: November 30


Date of reporting period:   February 28, 2009



 
Item 1. Schedule of Investments.
Tortoise Energy Capital Corporation
           
SCHEDULE OF INVESTMENTS (Unaudited)
           
               
     
February 28, 2009    
 
Master Limited Partnerships and Related Companies - 156.8% (1)
 
Shares
   
Fair Value
 
               
Crude/Refined Products Pipelines - 83.2% (1)
           
United States - 83.2% (1)
           
Buckeye Partners, L.P.
   
100,632
    $
3,974,964
 
Enbridge Energy Partners, L.P.
   
659,157
     
18,766,200
 
Enbridge Energy Partners, L.P. (2) (3)
   
333,606
     
9,421,046
 
Holly Energy Partners, L.P.
   
26,453
     
674,023
 
Kinder Morgan Management, LLC (3)
   
928,217
     
38,725,213
 
Magellan Midstream Partners, L.P.
   
636,738
     
20,248,268
 
NuStar Energy L.P.
   
615,763
     
28,411,305
 
Plains All American Pipeline, L.P.
   
933,179
     
35,964,719
 
SemGroup Energy Partners, L.P.
   
436,674
     
1,200,854
 
Sunoco Logistics Partners L.P.
   
764,713
     
42,051,568
 
TEPPCO Partners, L.P.
   
443,491
     
10,093,855
 
               
209,532,015
 
                   
Natural Gas/Natural Gas Liquids Pipelines - 49.4% (1)
               
United States - 49.4% (1)
               
Boardwalk Pipeline Partners, LP
   
433,173
     
9,139,950
 
El Paso Pipeline Partners, L.P.
   
817,426
     
14,411,220
 
Energy Transfer Equity, L.P.
   
314,061
     
6,165,017
 
Energy Transfer Partners, L.P.
   
671,538
     
24,316,391
 
Enterprise GP Holdings L.P.
   
282,774
     
5,533,887
 
Enterprise Products Partners L.P.
   
1,069,167
     
23,072,624
 
ONEOK Partners, L.P.
   
130,822
     
5,542,928
 
Spectra Energy Partners, LP
   
256,165
     
5,681,740
 
TC PipeLines, LP
   
887,700
     
22,964,799
 
Williams Pipeline Partners L.P.
   
481,642
     
7,638,842
 
               
124,467,398
 
                   
Natural Gas Gathering/Processing - 17.3% (1)
               
United States - 17.3% (1)
               
Copano Energy, L.L.C.
   
984,736
     
14,002,946
 
Crosstex Energy, L.P.
   
45,820
     
158,537
 
Crosstex Energy, L.P. (2) (4)
   
581,301
     
2,092,684
 
DCP Midstream Partners, LP
   
255,000
     
2,748,900
 
Duncan Energy Partners L.P.
   
250,700
     
4,088,917
 
Exterran Partners, L.P.
   
209,900
     
2,571,275
 
MarkWest Energy Partners, L.P.
   
1,405,456
     
15,122,707
 
Targa Resources Partners LP
   
97,783
     
827,244
 
Western Gas Partners LP
   
141,430
     
2,074,778
 
               
43,687,988
 
                   
Propane Distribution - 4.0% (1)
               
United States - 4.0% (1)
               
Inergy, L.P.
   
451,250
     
10,162,150
 
                   
Shipping - 2.9% (1)
               
Republic of the Marshall Islands - 0.7% (1)
               
Teekay LNG Partners L.P.
   
98,200
     
1,807,862
 
United States - 2.2% (1)
               
K-Sea Transportation Partners L.P.
   
330,997
     
5,527,650
 
               
7,335,512
 
                   
Total Master Limited Partnerships and Related Companies (Cost $432,353,443)
     
395,185,063
 
                   
Short-Term Investments - 8.8% (1)
               
United States Investment Companies - 8.8% (1)
               
AIM Short-Term Treasury Fund - Institutional Class, 0.28% (5)
   
157,668
     
157,668
 
First American Government Obligations Fund - Class Y, 0.27% (5)
   
2,897,613
     
2,897,613
 
Merrill Lynch Premier Institutional Fund, 0.94% (5)
   
19,025,926
     
19,025,926
 
Total Short-Term Investments (Cost $22,081,207)
           
22,081,207
 
                   
Total Investments - 165.6% (1) (Cost $454,434,650)
           
417,266,270
 
Other Assets and Liabilities - 7.8% (1)
           
19,708,406
 
Long-Term Debt Obligations - (35.7%) (1)
            (90,000,000 )
Preferred Shares at Redemption Value - (37.7%) (1)
            (95,000,000 )
Total Net Assets Applicable to Common Stockholders - 100.0% (1)
          $
251,974,676
 
                   
(1)  Calculated as a percentage of net assets applicable to common stockholders.
(2)  Restricted securities have been fair valued in accordance with procedures approved by the Board of Directors and have a total fair value .
of $11,513,730, which represents 4.6% of net assets
(3)  Security distributions are paid-in-kind.
(4)  Non-income producing.
(5)  Rate indicated is the current yield as of February 28, 2009.

Various inputs are used in determining the value of the Company’s investments.  These inputs are summarized in the three broad levels listed below:
 
   Level 1 – quoted prices in active markets for identical investments
 
 Level 2 – other significant observable inputs (including quoted prices for similar investments, market corroborated inputs, etc.)
 
Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following table provides the fair value measurements of applicable Company assets by level within the fair value hierarchy as of February 28, 2009.  These assets are measured on a recurring basis.

     
Fair Value Measurements at Reporting Date Using
     
Quoted Prices in
 
Significant
     
Active Markets for
Significant Other
Unobservable
 
Fair Value at
 
Identical Assets
Observable Inputs
Inputs
Description
February 28, 2009
 
(Level 1)
(Level 2)
(Level 3)
           
Investments
 $     417,266,270
 
 $    405,752,540
 $     9,421,046
 $    2,092,684
           

 
Fair Value Measurements Using Significant Unobservable Inputs
(Level 3) for Investments  
 
For the period  from December 1, 2008
through February 28, 2009
Fair value beginning balance
$    3,313,416
Total unrealized losses included in net increase in net assets applicable to common stockholders
                        (1,220,732)
Net purchases, issuances and settlements
                     -
Return of capital adjustments impacting cost basis of security
                         -
Transfers into Level 3
                     -
Fair value ending balance
$    2,092,684

The Company utilizes the beginning of reporting period method for determining transfers into or out of Level 3.  Accordingly, this method is the basis for presenting the rollforward in the preceding table. Under this method, the fair value of the asset at the beginning of the period will be disclosed as a transfer into or out of Level 3, gains or losses for an asset that transfers into Level 3 during the period will be included in the reconciliation, and gains or losses for an asset that transfers out of Level 3 will be excluded from the reconciliation.
 
Certain of the Company’s investments are restricted and are valued as determined in accordance with procedures established by the Board of Directors.  The table below shows the number of units held, acquisition date, acquisition cost, fair value per share and percent of net assets which the securities comprise at February 28, 2009.
 
 
 
Investment Security
Number of Shares
 
 
Acquisition Date
 
 
Acquisition
Cost
 
 
 
Fair Value Per Share
Fair Value as Percent of Net Assets
Crosstex Energy, L.P.
Series D Subordinated Units
581,301
3/23/07
 $ 15,000,007
$    3.60
      0.8%
Enbridge Energy Partners, L.P.
Class C Common Units
333,606
4/02/07
    15,000,000
    28.24
      3.8
       
$ 30,000,007
 
        4.6%

As of February 28, 2009, the aggregate cost of securities for federal income tax purposes was $405,793,986. At February 28, 2009, the aggregate gross unrealized appreciation for all securities in which there was an excess of fair value over tax cost was $25,360,897, the aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over fair value was $13,888,613 and the net unrealized appreciation was $11,472,284.

Item 2. Controls and Procedures.
 
(a)  
The registrant’s President and Chief Executive Officer and its Chief Financial Officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “1940 Act”)) are effective as of a date within 90 days of the filing date of this report, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended.

(b)  
There was no change in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant's last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

Item 3. Exhibits.
 
Separate certifications for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)) are filed herewith.


 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


  Tortoise Energy Capital Corporation  
       
Date:  April 22, 2009
By:
/s/ David J. Schulte  
    David J. Schulte  
    President and Chief Executive Officer  
       



Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

  Tortoise Energy Capital Corporation  
       
Date:  April 22, 2009
By:
/s/ David J. Schulte  
    David J. Schulte   
    President and Chief Executive Officer   
       
  Tortoise Energy Capital Corporation  
       
Date:  April 22, 2009
By:
/s/ Terry Matlack  
    Terry Matlack  
    Chief Financial Officer  
       


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