Buckeye Partners L.P.
) announced that it will issue 6,000,000 limited partnership
("LP") units priced at $52.54 per unit to refinance the
outstanding debt under its revolving credit facility. The
partnership also granted the underwriters the option to purchase
up to 900,000 supplementary LP units.
Buckeye Partners has been a major operator in the pipeline
business and has occasionally engaged in the issuance of units.
In 2011, the company publicly offered to sell 4,800,000 LP units
pricing them each at $59.41 with an option given to the
underwriters to purchase up to 720,000 units.
The offering was made due to the increasing long-term debt of
the company, which rose 12% year over year to $2,672.7 million at
the end of the third quarter 2012. The cash balance also declined
a substantial 77.2% to $2.9 million at the end of the third
The partnership's high quality stake acquisition in the WesPac
Pipelines-Memphis LLC, the Perth Amboy terminal project and
Bahamas Oil Refining Company International (BORCO) facility are
expected to be key draws in the near term. The partnership's
consistent cash distribution of $1.0375 per unit will further
make its stock attractive to unit holders.
Conversely, Buckeye Partners' operations are widely exposed to
weather irregularities and unplanned outages which often lead to
cost pressure thereby impacting margins. These possibilities are
reflected in the partnership's Zacks Rank #3 (Hold).
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Within the past three months other partnership pipeline stocks
which have offered units to the public include
MarkWest Energy Partners L.P.
NuStar Energy L.P.
Atlas Pipeline Partners L.P.
Based in Houston Texas, Buckeye Partners, L.P. owns and operates
refined petroleum products pipeline systems in the United States.
It's Pipelines and Terminals segment transports refined petroleum
products and provides bulk storage and terminal throughput
services in the continental United States.