Oneok Drops on Secondary Offering (OKS, OKE)

Natural gas pipeline MLP Oneok Partners L.P. (NYSE: OKS) has announced a secondary offering of 8 million common units at a discount of 3.2% to Monday’s closing price. The company had announced, but not priced, an offering of 7 million common units yesterday. The sale will generate proceeds of about $475 million. Underwriters have a 30-day overallotment option of 1.2 million common units.

Oneok Partners will also sell an additional 8 million common units to Oneok Inc. (NYSE: OKE), the sole owner of Oneok Partners’ general partner. The sale to Oneok Inc. will generate proceeds of about $460 million. The number of common units involved here is also up by 1 million since yesterday’s announcement. Oneok Inc. will also contribute $19.4 million to “maintain its 2-percent general partner interest.”

Oneok Partners plans to use the proceeds to “repay amounts outstanding under its $1.2 billion commercial paper program, to repay amounts on the maturity of its $350 million 5.9 percent senior notes due April 2012, for capital expenditures and for other general partnership purposes.”

Oneok Partners’ common units are down -3.64% at $59.00 in a 52-week range of $43.05-$61.58. Shares of Oneok Inc. are down -0.89% at $82.60 in a 52-week range of $58.61-$89.63.