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Energy

Phillips 66 Set for IPO of Pipeline MLP

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By Paul Ausick Updated Published
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Oil pipeline

Thinkstock
In a move first discussed in March, Phillips 66 (NYSE: PSX) has filed an amended Form S-1 with the U.S. Securities and Exchange Commission (SEC) for the initial public offering (IPO) of 15 million shares in a master limited partnership (MLP) for its Phillips 66 Partners LP subsidiary. The new shares will trade under the ‘PSXP’ ticker symbol on the Nyse.

Underwriters, including J.P. Morgan, Morgan Stanley, BofA Merrill Lynch, Barclays, Credit Suisse, Deutsche Bank Securities, Citigroup, and RBC Capital Markets will have a 30-day overallotment option for an additional 2.25 million shares.

The IPO represents a 20.9% limited partner interest (24% if the overallotment options are fully exercised) in Phillips 66 Partners. Through subsidiaries, Phillips 66 will own the rest plus the 2% general partner interest.

The initial assets of the MLP will be three pipeline systems, one each in Illinois, Texas, and Louisiana.

According to the Form S-1, the company expects to raise up to $315 million in net proceeds from the IPO at a price of $20 a share, the mid-point of the IPO’s expected range of $19 to $21 per common unit. Phillips 66 Partners plans to use the proceeds for general partnership purposes, “including to fund potential future acquisitions from Phillips 66 and third parties and potential future expansion capital expenditures.”

PSXP - initial assets-7-13

Courtesy Phillips 66 Pipeline Partners LP

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About the Author Paul Ausick →

Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.

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