Over the past few years, investors looking for yield in a low interest rate environment discovered that they liked the distribution payouts from master limited partnerships in the energy sector. When they realized that the shares of these energy MLPs perform exceptionally well on the market, they discovered that they loved master limited partnerships.
As a result of strong interest and cheap capital, MLPs have flooded the market. Now, in the midst of one of the busiest periods of IPO activity since 2007, it can be hard keeping all these MLPs straight. Today I’m breaking out all the recent announcements so we know exactly what’s out there.
Hot off the press
On Tuesday morning, Plains All American Pipeline announced that it plans to take its general partner public as a master limited partnership trading under the ticker symbol PAGP. Plains is planning to raise $1 billion in the offering.
General partners typically own a 2% interest in the MLP, and also receive incentive distribution rights. In return, the general partner manages operations and maintenance at the MLP. It is not unheard of for a general partner to trade publicly; there are at least seven on the market right now, including Atlas Energy and Kinder Morgan.
Plenty more where that came from
Plains’ press release was one of a handful of MLP IPO announcements hitting the wire this summer. Western Refining, Inc. (NYSE:WNR) has also announced that it will pursue an MLP spin-off of its logistics assets. The MLP, appropriately named Western Refining, Inc. (NYSE:WNR) Logistics, will trade under the ticker WNRL. The partnership aims to raise $287.5 million in its offering.
QEP Midstream Partners recently increased its offering from $400 million to $483 million, shares were scheduled to begin trading on Aug. 2 under the ticker QEPM. OCI Resources also priced an IPO in July; it hopes to raise $115 million in its offering.
Additionally, Devon Energy Corp (NYSE:DVN) announced that it is moving forward with its plans to publicly offer its midstream assets, which includes 6,500 miles of pipeline and eight processing plants. Enbridge Energy Partners, L.P. (NYSE:EEP) is also moving forward with an IPO spin-off, with plans to bring Midcoast Energy Partners public, putting $570 million in limited partner units on the market.
Had enough? I’ve got one more for you, and it’s a good one. Last week, big-time refiner Valero Energy Corporation (NYSE:VLO) reaffirmed its intent to throw its hat in the ring as well, potentially spinning off its logistics assets in an MLP sometime next year.