MLP Protocol 101813

Key Adjustments:

  • Added Plains GP Holdings (PAGP) to the General Partner segment after its IPO at $22 on October 15.
    1. I remain surprised by the reception of the PAGP IPO, perhaps the total deal size of near $3 Billion was so large that they had a hard time generating enough demand. I incorrectly thought that the market for MLP related paper was deep enough to absorb the full deal without any problems, especially considering that PAGP has elected to be taxed as a C-Corp.
    2. Some of the reception may have also been colored by the concern that Occidental Petroleum (OXY) will be looking to exit more of its position over time (although I would point out that they are subject to a 15 month lock-up on their remaining units).
    3. I may also be biased as I view the Plains All American (PAA) management team as one of the best in the business.
  • Adjusted EV Energy Partners (EVEP) for a 5 million common unit offering at $36.86 on October 17 (4.1% discount to close).
  • Adjusted Crestwood Midstream Partners (CMLP) for the 14 million common unit offering announced on October 17 and currently in market, will adjust further once deal is finalized.

News Items:

  • On October 15, Navios Maritime Partners (NMM) announced that the Navios Harmony, a 2006-built Panamax vessel of 82,790 dwt, was delivered to Navios Partners’ owned fleet on October 11, 2013. The Navios Harmony has been chartered out to a high quality counterparty for four to six months at a rate of $14,725 net per day. The vessel is expected to generate approximately $1.5 million aggregate EBITDA for the period of this charter assuming operating expense approximating current operating costs. (Press Release)
  • On October 15, Tesoro Logistics (TLLP) announced that it will repair and replace a 200-foot section of the North Dakota pipeline that leaked 20,600 barrels of Bakken oil onto farmland in late September. The plan has been submitted and approved by the U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration (PHMSA). Tesoro declined to comment on the cause of the leak, citing ongoing investigations. It did not provide a date for the possible restart of the line. (News Item)
  • On October 16, Atlas Resource Partners (ARP) provided an operational update on its activities and lowered its distribution guidance for 2013 and 2014. (Press Release)
  • On October 18, Moody’s changed its outlook on Navios Maritime Partners’ (NMM) debt rating to Negative from Stable. (Press Release)

IPO Filings:

  • Sprague Resources (SRLP) has commenced its IPO roadshow and is looking to raise $170 million at an indicated mid-point yield of 8.25% (S-1 filing, Roadshow)

The MLP Protocol Monthly Analytics Report for October is now available, the November 2013 report will be available the weekend of October 25 (although I may postpone the full monthly for a week if the U.S. Energy Information Administration data is still delayed).

MLP Protocol Weekly Snapshot report: (click to open) MLPP 101813 Snapshot vFree

About Philip Trinder

President of MLP Protocol, investor, trader, and proponent of Master Limited Partnerships.
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