Shell Midstream looks to be largest MLP IPO in more than a decade

• Shell Midstream Partners (NYSE:SHLX) is set to become the largest MLP IPO in more than a decade, perhaps raising more than $750M.
• While there’s been an explosion of MLPs coming to market in recent years, the debut of Shell Midstream is generating more interest than usual because of the location of its assets, its strong balance sheet, and its potential for growth thanks to its big-name sponsor, Royal Dutch Shell (RDS.A, RDS.B).
• At the mid-range of its expected pricing of $19-$21, the 3.25% yield for Shell Midstream shares is the lowest of any MLP public offering on record, but investors appear little concerned with the low yield because of the high growth SHLX is expected to deliver.
• While the yield is low, money managers say in comparison to the partnership’s potential growth rate, SHLX is pricing at a slight discount to its fast-growth peers.