Transocean Partners, LP (ticker RIGP) is currently out on its IPO roadshow and looking to raise $350 million by selling 17.5 million common units (before the over-allotment) at a mid-point price of $20 with an indicated mid-point yield of 7.25%. They expect to price the deal Wednesday July 30.
RIGP is a growth-oriented limited liability company recently formed by Transocean (ticker RIG), one of the world’s largest offshore drilling contractors, to own, operate and acquire modern, technologically advanced offshore drilling rigs. RIGP’s initial assets consist of 51 percent interests in the RigCos that own and operate three ultra-deepwater drilling rigs that are currently operating in the U.S. Gulf of Mexico. Transocean owns the remaining 49 percent noncontrolling interest in each of the RigCos. RIGP generates revenue through contract drilling services, which involves contracting its mobile offshore drilling fleet, related equipment and work crews on a dayrate basis to large international energy companies to drill oil and gas wells. RIGP’s drilling rigs currently operate under long-term contracts with Chevron and BP, two leading international energy companies, with an average remaining contract term of approximately 4.2 years as of June 16, 2014. RIGP believes that their drilling contracts will generate stable and reliable cash flows over their term. Transocean Partners intends to use the relationships and expertise of Transocean to re-contract its fleet when the existing contracts expire and identify opportunities to expand its fleet through acquisitions.
- 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: RIGP SEC Filings
IMPORTANT: RIGP will provide investors with a 1099-DIV (instead of a K-1), which means, yes, you can buy it in any tax advantaged account and not have to worry about possible UBTI issues.