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June 28, 2012

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Did You Know? MLP IPO Edition

EQT Midstream Partners (EQM), the first IPO to launch domestically since Facebook, started trading yesterday after pricing at the high end of the pricing range ($21.00 per unit) and raising $262.5mm in gross proceeds.  EQM opened at $23.00, ran up to as high as $24.00, before closing at $23.75.  That’s a 13.1% IPO pop.
In homage to back when I used to watch sports and Sportscenter was good, below is sort of the MLP IPO version of the segment “Did you Know” that used to end Sportscenter…

EQM Did You Know:

  • That 13.1% one day pop is the highest since 7/17/07 (BKEP, or SemGroup Energy Partners as it was called then, was up 33.3%), almost 5 years ago
    • 12th highest IPO pop in MLP history (since 1996)
  • EQM priced at 6.67% yield, the lowest in almost a year, since OILT priced at 6.28% in July last year
    • Lowest IPO yield ever was SEP at 5.45% exactly five years before EQM’s IPO
More IPO Did You Know:
  • 79 MLP IPOs have launched since 1996, 48 (60.8%) had positive price changes on their first day of trading, 8 were flat, and 23 were down
    • Average overall first day price change was 4.9%, median was 1.8%
  • 21 MLP IPOs have launched since the financial crisis (first one was PNG in April 2010), 12 of those (57%) had positive first trading days, 1 was flat
    • Average pop on those was 2.8%, median was 0.3%
    • Numbers aren’t so good, but there have been lots of non-traditional MLP IPOs in that bunch
  • 13 MLP general partner holding companies have priced IPOs, 7 (54%) had positive first days, 3 were flat and 3 were down
    • Average pop for GP holdcos was 6.8%, or median of 3.5%
  • Of the 79 MLP IPOs since 1996, the average IPO yield is 8.4%
    • Last 50 MLP IPOs had IPO yield average of 7.9%
    • Last 25 MLP IPOs had IPO yield average of 8.3%
  • Of the 79 MLP IPOs since 1996, average IPO size is $178.3mm
    • Last 50 MLP IPOs averaged $216.1mm , last 25 averaged $246.6

Note: all of the above numbers include the variable distribution MLPs, which should probably be their own category, considering the last 3 averaged IPO yield of 11.88%.    I guess we’ll have to start a new category when the Linn Co corporate IPO goes public, but that probably just goes into a special category with KMR and EEQ, and the bizarre Natural Resource Partners subordinated unit IPO we did at Lehman and that is now long since converted.

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