public offerings

IPO ice-out could be in June

The number of initial public offerings has dramatically slowed since last August’s market correction and IPO activity hasn’t picked up in the uneven markets since then. Only six IPOs have priced in the U.S. in 2016, none of them in Minnesota.

But one research firm that tracks IPO activity said in a recent report that strong IPO returns often occur when IPO pricings have been frozen.

Renaissance Capital, based in Greenwich, Conn., provides pre-initial public offering institutional research and manages the Renaissance IPO ETF, an exchange-traded fund that models Renaissance’s IPO index. The IPO Index tracks aftermarket performance of two years’ worth of IPOs.

Renaissance Capital’s IPO ETF is down more than 23 percent in the last year.

Renaissance Capital calls IPOs that are issued during or after IPO market slowdowns “IPO Icebreakers” and its research shows the average IPO Icebreaker tends to outperform the S&P 500 index in its first 90 days of trading.

According to the report, among the 149 deals in the study since 2000, the average IPO gained 24 percent in the first 90 days of trading, outperforming the S&P 500 index by 20 percentage points.”

The report suggests the IPO market could return to normal (roughly 15 IPOs or more per month) by June.

The report’s conclusion, “counterintuitive as it sounds,” is that ”now may be the optimal time to keep a close eye on the IPO market.”
Patrick Kennedy 

Wind energy

Another large wind farm proposed in state

Edina-based Geronimo Energy is proposing a $320 million wind farm on 35,000 acres in southwest Lincoln County — the second large wind-power project proposed in Minnesota this year.

The project, described in a recent regulatory filing, would generate up to 200 megawatts of electricity, using 57 to 117 turbines. A megawatt equals 1 million watts.

In February, EDF Renewable Energy Inc. said it planned a similar-sized wind farm in Lincoln and Lyon counties. Both EDF and Geronimo are hoping to sell the electricity under contract to power companies. The projects require separate approvals from the Minnesota Public Utilities Commission.

Geronimo, a wind and solar energy developer, has been talking to landowners about its Blazing Star Wind Farm since last year. The site is west and north of Ivanhoe, Minn., near the South Dakota border.

Both projects’ electricity would flow onto the 250-mile transmission line completed in 2015 from Brookings, S.D., to Hampton, Minn., as part of the $2.1 billion CapX2020 regional power grid upgrade.

Minnesota has more than 90 wind projects, but most are under 100 megawatts. The recent trend in the industry is to build larger projects, using larger turbines. Geronimo is considering turbines of 1.7 megawatts to 3.5 megawatts, the filing said.

Six existing Minnesota wind farms are in the 200-megawatt range. Geronimo built one of the six, and is now building another of that size. EDF has built three projects of roughly 200 megawatts each in Minnesota.

Energy efficiency

With climate award, Minneapolis lauded for its partnership with Xcel and CenterPoint

Xcel Energy, CenterPoint Energy and the city of Minneapolis this month were named a “2016 Climate Leadership Award” winner for their “innovative partnership” for addressing climate change, an award given by the U.S. Environmental Protection Agency. The EPA honored 13 organizations, but the Minneapolis-utility collaboration was the first such partnership.

Minneapolis, Xcel and CenterPoint are working on ways to help the city achieve its 2013 climate action plan. Over the next 10 years, the partnership will help 75 percent of Minneapolis homeowners, renters and rental property owners participate in energy-retrofit programs; shift to brighter, more-efficient LED streetlights; implement the energy-disclosure policy for commercial buildings; investigate large-scale renewable energy purchasing by government and residents, and promote renewable energy solutions for Minneapolis customers such as onsite solar, wind, community solar gardens and other.

“We look forward to continuing to work with our energy partners and community leaders to help Minneapolis achieve greenhouse gas reduction goals as outlined in its Climate Action Plan,” Brad Tutunjian, vice president of CenterPoint, said in a prepared statement.

Mayor Betsy Hodges said the city already has reliable affordable energy and can do more with conservation, efficiency and renewables.

“I look forward to continuing the partnership to achieve our emission-reduction goals and ensure that we are doing everything we can to make a difference locally while setting an example nationally,” Hodges said.

Neal St. Anthony