Brookfield Asset Management Inc. has announced:
that it has determined the fixed dividend rate on its Cumulative Class A Preference Shares, Series 24 (“Series 24 Shares”) (TSX: BAM.PR.R) for the five years commencing July 1, 2016 and ending June 30, 2021. If declared, the fixed quarterly dividends on the Series 24 Shares during that period will be paid at an annual rate of 3.014% ($0.188375 per share per quarter). The implied yield on the Series 24 Shares based on the new fixed dividend rate that will apply for the five years commencing July 1, 2016 and today’s closing price for the Series 24 Shares is approximately 5.6%.
Holders of Series 24 Shares have the right, at their option, exercisable not later than 5:00 p.m. (Toronto time) on June 15, 2016, to convert all or part of their Series 24 Shares, on a one-for-one basis, into Cumulative Class A Preference Shares, Series 25 (the “Series 25 Shares”), effective June 30, 2016.
The quarterly floating rate dividends on the Series 25 Shares will be paid at an annual rate, calculated for each quarter, of 2.30% over the annual yield on three-month Government of Canada treasury bills. The actual quarterly dividend rate in respect of the July 1, 2016 to September 30, 2016 dividend period for the Series 25 Shares will be 0.71861% (2.851% on an annualized basis) and the dividend, if declared, for such dividend period will be $0.1796525 per share, payable on September 30, 2016.
Holders of Series 24 Shares are not required to elect to convert all or any part of their Series 24 Shares into Series 25 Shares.
As provided in the share conditions of the Series 24 Shares, (i) if Brookfield determines that there would be fewer than 1,000,000 Series 24 Shares outstanding after June 30, 2016, all remaining Series 24 Shares will be automatically converted into Series 25 Shares on a one-for-one basis effective June 30, 2016; and (ii) if Brookfield determines that there would be fewer than 1,000,000 Series 25 Shares outstanding after June 30, 2016, no Series 24 Shares will be permitted to be converted into Series 25 Shares. There are currently 10,970,000 Series 24 Shares outstanding.
The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the Series 25 Shares effective upon conversion. Listing of the Series 25 Shares is subject to Brookfield fulfilling all the listing requirements of the TSX and, upon approval, the Series 25 Shares will be listed on the TSX under the trading symbol “BAM.PR.S”.
BAM.PR.R is a FixedReset, 5.40%+230, that commenced trading 2010-1-14 after being announced 2010-1-5.
The new rate therefore represents a 44% cut in dividends. Ouch!
As noted, the deadline to notify the company is 5 p.m. (Toronto time) on June 15, 2016.; brokers will have internal deadlines a day or two in advance.
I will post a recommendation regarding whether or not to convert closer to the deadline.
This entry was posted on Saturday, June 4th, 2016 at 12:41 am and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or trackback from your own site.
BAM.PR.R To Reset To 3.014%
Brookfield Asset Management Inc. has announced:
BAM.PR.R is a FixedReset, 5.40%+230, that commenced trading 2010-1-14 after being announced 2010-1-5.
The new rate therefore represents a 44% cut in dividends. Ouch!
As noted, the deadline to notify the company is 5 p.m. (Toronto time) on June 15, 2016.; brokers will have internal deadlines a day or two in advance.
I will post a recommendation regarding whether or not to convert closer to the deadline.
This entry was posted on Saturday, June 4th, 2016 at 12:41 am and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.