BAM Shuffles More Assets Down the Line

Brookfield Asset Management has engaged in a very familiar transaction – shuffling assets down the line:

Brookfield Renewable Energy Partners L.P. (“Brookfield Renewable”) (TSX: BEP.UN) and Brookfield Asset Management (“Brookfield”) (TSX: BAM.A, NYSE: BAM) today announced a bought-deal secondary offering with a syndicate of underwriters led by Scotia Capital Inc. and TD Securities Inc., through which a wholly-owned subsidiary of Brookfield has agreed to sell 11,430,000 L.P. units of Brookfield Renewable at an offering price of $26.25 per L.P. unit. The Underwriters have been granted an over-allotment option to purchase up to an additional 1,714,500 L.P. units from Brookfield at the offering price, under the same terms, exercisable for a period of 30 days from closing of the Offering.

Brookfield currently owns approximately 73% of Brookfield Renewable on a fully-exchanged basis. Upon the completion of the offering, but before giving effect to the over-allotment option, it is anticipated that Brookfield will own, directly and indirectly, 179,465,109 L.P. units, representing approximately 68% of Brookfield Renewable on a fully-exchanged basis.

Boyd Ermann of the Globe & Mail comments:

Brookfield Asset’s cash hoard will increase by about 18 per cent after it takes in the proceeds of the sale. As of the end of the third quarter, Brookfield Asset listed cash and financial assets of $1.7-billion (U.S.).

Look for the money to head across the Atlantic. On the company’s last quarterly conference call, chief executive officer Bruce Flatt said Brookfield expects “to find opportunities to acquire international assets from European companies which are endeavoring to deleverage their balance sheets, and we’re working with a number of excellent companies to assist them in this regard.”

BAM has issued a host of preferreds: BAM.PR.B, BAM.PR.E, BAM.PR.G, BAM.PR.H, BAM.PR.I, BAM.PR.J, BAM.PR.K, BAM.PR.M, BAM.PR.N, BAM.PR.O, BAM.PR.P, BAM.PR.R, BAM.PR.T, BAM.PR.X and BAM.PR.Z are all tracked by HIMIPref™.

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