Now is apparently a good time for midstream oil industry players to issue new stock. Four master limited partnerships (MLPs) and one midstream general partner raised more than $1.9 billion in secondary offerings last week. The flood of new paper pushed the Alerian MLP index down 4.3% for the week and down 9% for the year to date.
The largest secondary came from EQT Midstream Partners L.P. (NYSE: EQM), which sold 8.25 million common units at $76 per unit, a discount of 5.54%. The underwriters have a 30-day option on 1.238 million additional common units.
EQT plans to use net proceeds from the gross total of $627 million to fund a portion of a drop-down acquisition and to purchase a preferred interest in another EQT subsidiary. Net proceeds, if any, from the underwriters overallotment will be added to a proportional capital contribution from the company’s general partner to maintain its 2% general partner interest. The common units closed at $74 on Friday, following the Wednesday pricing announcement.
Sunoco Logistics Partners L.P. (NYSE: SXL) also price a secondary offering on Wednesday. The company sold 13.5 million common units at $41.76 per unit, raising $563.8 million in gross proceeds at a per unit discount of 3.24%. The underwriters have an option to purchase an additional 2.03 million common units.
The company plans to use the net proceeds to repay outstanding borrowing on its $1.5 billion revolving credit facility and for other partnership purposes. Units closed at $41.42 on Friday.
Calumet Specialty Products Partners L.P. (NASDAQ: CLMT) sold 6 million common units at $26.75 per unit, a discount of 3.9%, to raise $160.5 million in gross proceeds. Underwriters have an option on an additional 900,000 common units.
The company plans to use the net proceeds, including a proportionate capital contribution from its general partner, to repay borrowing against its revolving credit facility and for general partnership purposes. Pricing was announced Monday and the common units closed Friday at $24.78.
Enbridge Energy Partners L.P. (NYSE: EEP) priced an overnight offering of 8 million common units at $36.70 on Monday. The discount to the previous Friday’s closing price was 3.2%, and the sale raised $293.6 million in gross proceeds. Underwriters have a 30-day option on an additional 1.2 million common units.
The company said it expects to use the net proceeds to fund a portion of capital expansion projects and for general partnership purposes. The common units closed on Friday at $35.82.
Targa Resources Corp. (NYSE: TRGP) priced 3.25 million shares at $91 on Thursday morning, for a discount of 3.6% to Wednesday’s closing price. The company raised $295.8 million in gross proceeds in the overnight offering and underwriters have a 30-day option on an additional 487,500 shares.
Targa expects to use the net proceeds of approximately $292.3 million (up to $336.2 million if the underwriters exercise their option) to repay a portion of outstanding borrowing under its credit facility, to make a cash contribution of $53 million to Targa Resources Partners L.P. (NYSE: NGLS) to maintain the company’s 2% general partner interest, and for general corporate purposes. Shares closed Friday at $89.11.