Enable Midstream Partners, LP (ticker ENBL) is currently out on its IPO roadshow and looking to raise $500 million by selling 25 million common units (before the over-allotment) at a mid-point price of $20 with an indicated mid-point yield of 5.75%. They expect to price the deal Thursday April 10.
ENBL is a large-scale, growth-oriented master limited partnership formed to own, operate and develop strategically located natural gas and crude oil infrastructure assets. ENBL serves key current and emerging production areas in the United States, including several premier, unconventional shale resource plays and local and regional end-user markets in the United States. Its natural gas gathering and processing assets are strategically located in four states and serve natural gas production from some of the most productive shale developments in the Anadarko, Arkoma and Ark-La-Tex basins. These basins have experienced a strong increase in investment and drilling activity by exploration and production companies in recent years. ENBL also owns an emerging crude oil gathering business in the Bakken shale formation that commenced initial operations in November 2013. ENBL is continuing to construct additional crude oil gathering capacity in this area. ENBL’s natural gas transportation and storage assets extend from western Oklahoma and the Texas Panhandle to Alabama and from Louisiana to Illinois.
- Here is the full roadshow presentation (click to open and/or download): ENBL Roadshow Slides April 2014
- Here is a link to the roadshow video (it will be removed the night the IPO prices): IPO Roadshow Video
- Here is a link to their SEC filings: ENBL SEC Filings
IMPORTANT: ENBL will provide investors with a K-1 (instead of a 1099-DIV), which makes ENBL appropriate for taxable accounts. Here is the key language from the “Risks” section of the Prospectus (page 57) telling you that it does not really belong in an IRA (or any tax advantaged account):
Tax-exempt entities and non-U.S. persons face unique tax issues from owning our common units that may result in adverse tax consequences to them.
Investment in common units by tax-exempt entities, such as employee benefit plans and individual retirement accounts (known as IRAs), and non-U.S. persons raises issues unique to them. For example, virtually all of our income allocated to organizations that are exempt from federal income tax, including IRAs and other retirement plans, will be unrelated business taxable income and will be taxable to them. Distributions to non-U.S. persons will be reduced by withholding taxes at the highest applicable effective tax rate, and non-U.S. persons will be required to file U.S. federal income tax returns and pay tax on their share of our taxable income. If you are a tax-exempt entity or a non-U.S. person, you should consult a tax advisor before investing in our common units.
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I was running a Monthly Analytics subscription service that also included my analyses of MLP IPOs but I have discontinued it here for the time being since the cost benefit analysis of offering the service was upside down from my perspective.
If I do reconfigure it and start something up again I’ll include a page about it in the Weekly Snapshot (and add something about it on the Products and Services page).
I am primarily interested in MLP IPOs. Do you have a service that advises on these kind of investments and wether, in your opinion, you believe them to be a reasonable purchase?