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Energy debt offerings retreat in Q3'16; sector launches first IPO since 2015

Debt offerings in the energy sector retreated in the thirdquarter of 2016 following a surge of activity in the previous quarter.

Debt raises for the power, coal, gas utility and midstreamsectors totaled $31.04 billion in the third quarter, with 76 deals at anaverage size of $408.4 million. In the second quarter, the sectors raised$39.90 billion through 96 deals at an average size of $415.7 million. Duringthe third quarter of 2015, energy debt offerings totaled $19.43 billion, with112 deals at an average size of $173.4 million.

Select power companies continued to lead debt offerings andraised $23.10 billion through 57 deals at an average size of $405.3 million.This is down from the $29.35 billion raised in the second quarter through 72deals at an average size of $407.7 million.

Select midstream companies followed, with $5.88 billionraised through 10 deals at an average size of $587.5 million. This was a dropfrom the $7.75 billion raised through 12 deals at an average size of $645.8million.

Gas utilities raised $2.07 billion in the quarter throughnine deals at an average size of $229.4 million, down from $2.80 billion raisedin the previous three-month period through 12 deals at an average size of$233.2 million.

Coal companies did not have any debt offerings through thethird quarter.

Wells FargoSecurities LLC was the top book manager in energy debt offeringsthrough the first nine months of 2016, ranked by deal credit, with 59 offeringsand a total deal credit of $6.48 billion. Bank of America Merrill Lynch followed with 50 offeringsand a total deal credit of $5.13 billion.

Common equity offerings in the third quarter decreased inoverall value to $7.54 billion raised through 23 deals at an average size of$327.6 million. In the second quarter, 34 deals at an average size of $302.2million raised $10.28 billion in the energy sector. The sector raised $4.95 billionthrough 24 deals at an average size of $206.1 million in the third quarter of2015.

The midstream sector, the most active in the third quarter,raised $3.10 billion through 11 deals at an average size of $281.9 million.This is still a significant drop from the $7.30 billion raised in the secondquarter through 24 deals at an average size of $304.2 million.

Select power companies raised $4.28 billion through eightdeals at an average size of $535.0 million. This is up from $2.45 billionraised in the second quarter through six deals at an average size of $409.1million.

Gas utilities raised $154.4 million through four deals at anaverage size of $38.59 million, down in overall value from $520.5 millionraised through four deals at an average size of $130.1 million in the previousquarter. The coal sector again did not have any common equity offerings in thethird quarter.

BarclaysCapital Inc. held its top spot among book managers for commonequity offerings, with 13 offerings and a total deal credit of $3.88 billionthrough the first three quarters of 2016. J.P. Morgan Securities LLC moved up to claim the secondspot, with 11 offerings and a total deal credit of $2.10 billion.

Barclays Capital, Goldman Sachs & Co., and WellsFargo Securities acted as joint book-running managers for 's mid-August of 32.5 million commonshares, priced to bring in approximately $1.6 billion in gross proceeds, tohelp fund its acquisition of a 50% stake in 's .

There were three preferred equity offerings in the thirdquarter that totaled $891.3 million at an average size of $297.1 million. Inthe second quarter, the energy sector raised $1.37 billion through six deals atan average size of $228.0 million. In the third quarter of 2015, the sectorraised $728.0 million through three deals at an average size of $242.7 million.

Two preferred equity offerings, at an average size of $14.4million, raised $28.8 million in the midstream sector. There was one preferredequity offering in the power sector at $862.5 million following a quiet secondquarter. The coal sector and gas utilities were inactive in the quarter.

An initialpublic offering launched in September by was thefirst IPO in the energy sector in more than a year. The IPO generatedapproximately $323.4 million in net proceeds for Noble Midstream Partners.

Barclays, Robert W. Baird & Co. Inc., J.P. Morgan, Bank ofAmerica Merrill Lynch, CitigroupGlobal Markets Inc., Deutsche Bank Securities Inc., , , and Wells Fargo Securities acted as joint book-running managers in NobleMidstream Partners' initial public offering of 14,375,000 common units at$22.50 per unit. Noble EnergyInc. is the master limited partnership's sponsor.

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