Phillips 66 Partners Units Surge on IPO

A new oil partnership with a storied name has made a splash on its market debut. Phillips 66 Partners (NYSE: PSXP  ) began trading on the New York Stock Exchange this morning and at the moment is trading at $29.87, nearly 30% above its IPO price of $23 per share.

All told, just over 16.4 million common units in the partnership were released in the IPO. After the issue closes, the public will collectively hold a nearly 23% limited partner interest in the enterprise, or as much as 26% if the offering's underwriters fully exercise their option to purchase 2.46 million additional units.

The partnership was brought to market by book-running managers JPMorgan Chase unit J.P. Morgan, Bank of America's (NYSE: BAC  ) Merrill Lynch, Credit Suisse (NYSE: CS  ) , Citigroup (NYSE: JPM  ) , Barclays, Morgan Stanley, Royal Bank of Canada's (NYSE: RY  ) RBC Capital Markets, and the securities arm of Deutsche Bank (NYSE: DB  ) .

The company is a limited partnership created earlier this year by downstream oil concern Phillips 66 (NYSE: PSX  ) . In the words of its parent, Partners was formed to "own, operate, develop, and acquire primarily fee-based crude oil, refined petroleum product, and natural gas liquids pipelines and terminals and other transportation and midstream assets." Partners is a spinoff of a spinoff; Phillips 66 was carved out of energy major ConocoPhillips (NYSE: COP  ) and made its market debut in 2012.

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  • Report this Comment On July 23, 2013, at 8:22 PM, moweenfarmer wrote:

    People are crazy for buying this for $29.,less than 3% yield for a MLP.

  • Report this Comment On July 24, 2013, at 8:17 PM, TMFVolkman wrote:

    moweenfarmer, you raise a very good point. I think the jump happened because PSXP is firstly, an IPO (which is always exciting), and it's attached to a well-known name in the industry. It'll be interesting to see if the current stock price holds or rises, given the much higher yields of rival partnerships.

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