CNX Coal Resources L.P. is set to come public this week. This could be a massive deal for the ailing coal sector as this is the growth-oriented master limited partnership (MLP) recently formed by CONSOL Energy Inc. (NYSE: CNX). It will manage and further develop all of its active thermal coal operations in Pennsylvania.

The MLP will sell some 10 million units, and the price has been slated as $19 to $21 per unit. If all goes well, this will raise roughly $200 million.

Here is where investors have to wonder about the demand for this. The list of book-running managers in the offering is huge: Bank of America Merrill Lynch, Wells Fargo Securities, Citi, Jefferies, Scotiabank/Howard Weil, Credit Suisse, JPMorgan, Evercore Partners, BB&T Capital Markets, Goldman Sachs, Huntington Investment, Stifel and Nomura Securities. One has to wonder why so many underwriters were needed for a mere $200 million in new capital. That is particularly puzzling when you consider how large some of the firms are.

The MLP is expected to price on Wednesday and begin trading Thursday. It will trade on the New York Stock Exchange under the ticker symbol CNXC. We have previously noted the following:

The new MLP’s initial assets include a 20% undivided interest in, and operational control over, CONSOL’s Pennsylvania mining complex, which consists of three underground mines and related infrastructure that produce thermal coal sold primarily to electric utilities in the eastern United States. Total reserves for the three mines is about 786 million tons and annual production capacity is estimated at 28.5 million tons. In 2014, the three mines produced 26.1 million tons of coal.

The common units being offered represent a 42.2% limited partner interest in CNX Coal Resources (or a 48.5% limited partner interest if the underwriters exercise in full their option to purchase additional common units). CONSOL Energy will own a 55.8% limited partner interest in CNX Coal Resources (or a 49.5% limited partner interest if the underwriters exercise in full their option to purchase additional common units). CONSOL also will own, through its ownership of CNX Coal Resources G.P. LLC, the general partner of CNX Coal Resources, a 2% general partner interest and the incentive distribution rights in CNX Coal Resources.

All proceeds from this offering, including the underwriters’ overallotment option, are being distributed to CONSOL Energy. The new company expects to make a quarterly distribution of $0.5125 per common unit. The first payment will be made for a period beginning at the closing of this offering and ending on September 30, 2015.

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