6 Responses to “June 25, 2019”

1. mr_j936 says:

   June 25, 2019 at 7:49 pm

   PWF.PR.A and BAM.PRK are both 70% of Canada prime payers right? Both are pfd-2 The price difference seems rather big, 10$ vs 12$. The market seems to dislike brookfield, is it because they have too many issues?

   I would honestly buy more brookfield but I find that I have too much as it is… Canada prime never went below 2.5% (from what I am seeing) Nothing explains why the share price would go so low that it yields now what is equivalent to close to 200% the prime rate (in brookfield’s case)

2. jiHymas says:

   June 25, 2019 at 8:49 pm

   The market seems to dislike brookfield, is it because they have too many issues?

   I would honestly buy more brookfield but I find that I have too much as it is…

   You basically answered your own question. I very often find myself in the position in which I would love to sell an issue of Company X to buy a company in the Brookfield group, but am full up.

   It’s not surprising, really, since if we look at ZPR, we find that BAM weight is 5.3%, Related entities 9.6%

   For the two particular issues you mention, though, an important consideration is that PWF is simply a better credit than BAM.

3. skeptical says:

   June 25, 2019 at 9:54 pm

   Question- PWF comprises mostly GWO and IGM holdings (and bits of European holdings as well). And these are the GWO and IGM’s common stock.
   GWO preferred stock is rated P2(H).
   And PWF preferred stock is rated P2(H).

   I understand that the combined earnings power of GWO/IGM common stock gives the earnings cushion that gives the high ratings to PWF preferred stock.

   But assuming the worst case scenario and GWO/IGM blow up. In that case, GWO/IGM common stock would be worth zero and nothing would be left for PWF shareholders. Yet GWO Preferred holders might have some scraps left to fight over. Yet both GWO and PWF share the same credit ratings.

   What am I missing here?

   Any comments would be deeply appreciated.

4. jiHymas says:

   June 26, 2019 at 12:15 am

   But assuming the worst case scenario and GWO/IGM blow up.

   Well, that’s a worst-case scenario indeed! The chance of them blowing up simultaneously will be more than if they were completely unrelated companies, but much less than of either one hitting the skids.

   According to DBRS:

   The diversification and overall strength of the Company’s combined subsidiaries, in addition to the assessment of the financial strength of the PWF legal entity, have prompted DBRS to conclude that the sum of the parts is sufficiently strong enough for PWF’s Issuer Rating to be at the same level as GWO’s.

   Or, to put it another way, PWF’s diversification due to IGM is enough to offset its structural subordination with respect to GWO. In the view of DBRS.

5. skeptical says:

   June 26, 2019 at 9:22 am

   Thanks for the informative link and explanation.

6. mr_j936 says:

   June 26, 2019 at 10:16 am

   Thank you for answering me 🙂