David Ronn Discusses the Potential Resurgence of Master-Limited Partnership IPOs

The Wall Street Journal | September.14.2016

David Ronn, a partner in Orrick’s Capital Markets team in Houston, recently spoke with The Wall Street Journal regarding the impending IPO of Noble Midstream Partners LP, an energy-infrastructure company and master-limited partnership (MLP). MLPs were popular with investors during the energy boom of the past decade, but a decline in the price of crude oil resulted in the decline in MLPs going public. Noble’s IPO is set to be the first IPO of an MLP in more than a year, and if successful, more could potentially follow.

According to David, there is pent-up demand for access to capital from existing MLPs that have been shut out of debt and equity markets and some may be waiting to go public. However, he noted that few expect a return to the “raucous market” of 2013 and 2014, when oil prices were close to $100 a barrel and helped instigate energy infrastructure build-out and the increase in MLPs.

“For the healthy MLPs, there’s been a market overreaction, and they want to be able to access the capital markets from a reasonable perspective,” David said, adding, “Will there be greater scrutiny? Of course there will.”