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CVR Refining Raises $600 Million in Offering at Mid-Range

Jan. 17 (Bloomberg) -- CVR Refining LP, the U.S. oil refiner controlled by billionaire investor Carl Icahn, raised $600 million in its initial public offering after pricing an increased number of units at the midpoint of the price range.

CVR Refining sold 24 million units for $25 each, according to data compiled by Bloomberg, after offering 20 million units for $24 to $26. On the first day of trading, the units rose 5 cents to $25.05 at the close in New York.

Parent CVR Energy Inc. said Oct. 1 it planned to put its refineries into a master-limited partnership and sell units after failing to find a buyer for the plants. Icahn Enterprises LP took control of CVR Energy last year. CVR Energy fell 3.7 percent to $50.69.

CVR Refining, based in Sugar Land, Texas, is at least the third refiner in the past year to put its plants into a master-limited partnership, a structure that isn’t required to pay corporate income tax, leaving more cash for payments to holders. Northern Tier Energy LP and Alon USA Partners LP began trading last year.

An abundance of cheap U.S. oil was at the heart of record profits in 2012 for CVR and some other U.S. refiners. Profits at refiners vary based on the margin between the cost of crude and the price of refined fuels such as gasoline. Based on U.S. benchmark oil prices, the so-called crack spread averaged a record $29.34 a barrel last year.

CVR Energy, which also controls a partnership that makes fertilizer, controls CVR Refining’s general partner after the IPO. The partnership owns refineries in Coffeyville, Kansas, and Wynnewood, Oklahoma, that together can process 185,000 barrels a day, as well as oil pipelines, tanks and a fuel-sales business.

Proceeds will be used to repurchase debt and fund some maintenance and equipment expenses through 2014, regulatory filings show.

Credit Suisse Group AG, Citigroup Inc., Barclays Plc, UBS AG and Jefferies Group Inc. handled the offering.

To contact the reporter on this story: Mark Chediak in San Francisco at mchediak@bloomberg.net; Bradley Olson in Houston at 8408 or bradleyolson@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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