CVR Partners, Golar LNG Partners rise in debut

By Alina Selyukh

NEW YORK (Reuters) – Two partnerships benefiting from rising commodity prices rose in their debut as publicly traded companies on Friday after garnering enough demand to price higher than expected.

Units of Golar LNG Partners LP (GMLP.O: Quote, Profile, Research), a subsidiary of U.S. liquefied natural gas shipper Golar LNG (GLNG.O: Quote, Profile, Research), rose to $24.79, or 10.2 percent above the IPO price, in the Nasdaq debut.

CVR Partners LP (UAN.N: Quote, Profile, Research), a fertilizer producing arm of U.S. oil refiner CVR Energy Inc (CVI.N: Quote, Profile, Research), rose to $17.92, 12 percent above the IPO price, in the New York Stock Exchange debut.

Promising high dividend yields, the two limited partnerships also cater toward high investor appetite for exposure to energy and commodities stocks.

“They’re hitting the sweet spot of the market space,” said President David Menlow. “And certainly, the warm and fuzzy feeling that people get thinking of commodities prices is a driver.”

The two follow on the heels of the upsized offering by SandRidge Energy’s (SD.N: Quote, Profile, Research) royalty trust (SDT.N: Quote, Profile, Research) that rose more than 15 percent in its debut on Thursday. [ID:nN07104555] The shares added another 1.8 percent to $24.64 on Friday.

The string of IPOs comes at a time when oil prices continue a steep climb and a wave of companies with exposure to energy and natural resources may be considering public offerings to tap investors’ interest in the stocks that could benefit from the rising commodities prices.

Turmoil in the Middle East has sent crude oil prices surging in recent weeks to 2 1/2-year highs. Breaching new levels for several days in a row, U.S. crude futures surpassed $111 a barrel on Friday.

The nuclear crisis in Japan is adding to the growing demand for alternative energy sources including liquefied natural gas. Booming growth in developing countries and especially China has supported strong demand for raw materials and natural resources such as coal, metals and agriculture-related products.

CVR Partners makes nitrogen fertilizer from petroleum coke produced at CVR Energy’s Coffeyville, Kansas oil refinery. The company raised $270 million on Thursday, pricing shares at $22.50, above the proposed price range of $19 to $22.

Investments in Golar LNG Partners offer exposure to Golar’s carriers of liquefied natural gas and offshore units that process LNG to turn it back into natural gas. Golar LNG Partners raised $307 million on Thursday, pricing units at $16, above the expected range of $12 to $14.

Morgan Stanley, Barclays Capital and Goldman Sachs led underwriters on the offering by CVR Partners. Citigroup, Bank of America Merrill Lynch and Morgan Stanley led underwriters on the Golar LNG Partners offering.

(Reporting by Alina Selyukh, editing by Dave Zimmerman)

CVR Partners, Golar LNG Partners rise in debut