All good things must come to an end.
BAM.PR.S has been a wonderful issue, paying $2.0875 interest every year but it’s time to wave farewell to the old friend.
Brookfield called it for redemption:
Brookfield Asset Management Inc. (NYSE/TSX: BAM) announced today that it intends to redeem its 8.35% Preferred Securities (“Securities”) on January 2, 2007 for C$25.00 per Security plus accrued interest of C$0.01144, representing a total Redemption Price of C$25.01144 per Security.
Enjoy the company of BAM.PR.T while you can, because it’s going to get called shortly as well (or, at least, so I predict). These were all issued during a small craze for interest-bearing prefs … they were a bit expensive compared to regular bonds, but these things had a stated term of 50-years. Not only could Brookfield not issue 50-year regular bonds (at least, I don’t think they could) but still get away with offering the preferred securities, but I believe there is some accounting convention whereby a 50-year bond is considered equity for at least some capital adequacy purposes.
Update 2007-01-05 : This post has been singled out for spamming for some odd reason; I have therefore disabled the comment function.