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IPO Preview: Noble Midstream is Back

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Ten months have elapsed since the last time Noble Midstream looked to launch their IPO, this time around the company expects to price at a midpoint yield of 7.5% vs the 6.25% from the previous attempt last November. Sponsor Noble Energy is one of the largest liquids producers in the DJ Basin, which started production in 2013 and has since grown volumes an average of 16%.  Noble Midstream's only client is Noble Energy, which has escalating fixed fee dedicated acreage agreements, but no minimum volume commitments.  Here are a few of the changes from the previous prospectus and an update to our article published in November 2015

 

Issuance:  12.500,000 units with a Minimum Quarterly Distribution of $1.50 and midpoint yield of 7.50% at a $20 offering price vs 6.25% in previous offering

 

Incentive Distribution Rights trigger the first tier when the distribution exceeds $0.4313 and reaches the 50% split when the distribution exceeds $0.5625, a 50% increase over the minimum quarterly distribution of $0.375

 

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