It’s been a long time since an investment grade Operating Retractible issue came out!
Issue: Brookfield Asset Management 5.00% Cumulative Class A Preference Shares, Series 21
Size: 6-million shares @ $25.00 (= $150-million); Greenshoe for 1-million shares (= $25-million) exercisable prior to closing.
Dividends: $1.25 p.a.; Long first dividend of $0.3299 planned for September 30
Redemption: Redeemable at $25.00 on and after 2013-6-30; Company may substitute common shares at greater 95% of market or $2
Retraction: Retractible into common at greater of 95% of market and $2. Company may elect to substitute cash.
Ratings: S&P: P-2; DBRS: Pfd-2(low)
Closing: 2008-6-25
Other BAM retractibles are BAM.PR.H, BAM.PR.I and BAM.PR.J
More later.
Later, More: Comparables – at intra-day prices – are:
| BAM Retractibles | |||
| Issue | Quote 6/16 Intraday |
Bid Yield to Worst |
End-Date |
| BAM.PR.H | 25.82-29 | 4.26% | Call 2008-10-30 |
| BAM.PR.I | 25.60-75 | 4.99% | SoftMaturity 2013-12-30 |
| BAM.PR.J | 25.00-29 | 5.41% | SoftMaturity 2018-3-30 |
| BAM.PR.? | 25.00 Issue Price |
5.01% | SoftMaturity 2013-6-30 |
The BAM.PR.H are interesting … callable at 25.75 commencing 2008-9-30, redemption price declines by $0.25 annually until 2011-9-30, callable at $25.00 thereafter; retractible into shares commencing 2012-3-31; yield until the softMaturity 2012-3-30 is 4.76%.
The new issue is nice – it’s very nice to see a new issue eligible for the OpRet index! – but appears to be no more than fairly priced relative to the extant BAM retractibles.
I still kinda like BAM.PR.J, and I recently added to my position when it was skirting around par – I couldn’t pass up the oportunity to lower my cost base even more, collecting over 5% until 2018 with a retractable just seems smart to me.
Unlike my purchase of PWF.PR.L recently, where I thought I was so smart in my acquisition , and of course, it has since betrayed me and dropped to a new low.
It’s nothing of course, against the drop I have suffered in the last year with my SLF.PR.D position. Oh, whoa is me, there’s no justice in preferreds. hehehe
ltr
No justice nowadays, anyway, what with the recent precipituous decline!
But as long as they keep paying their dividend, I’m happy …
Since we often comment how many BAM/BPO issues there are (attempting to explain low yields on the likes of BAM.PR.M/N, for example), it will be interesting to see if this new retractible BAM issue gets a good reception. I, for one, have sufficient BAM exposure, so will have to sit on the sidelines here.
Sorry, should have been “low prices”/”high yields” on BAM.PR.N/M not “low yields” for sure.
Interesting indeed, to see what a new issue does to a market I’ve been thinking is saturated! Perhaps they were approached by a dealer who felt that the Loblaw new issue had sold well and couldn’t resist a 5% coupon.
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