Category: Return of Capital

  • BEP.PR.M To Reset To 6.050%

    Brookfield Renewable Partners L.P. has announced:

    that it has determined the fixed distribution rate on its Class A Preferred Limited Partnership Units, Series 13 (“Series 13 Units”) (TSX: BEP.PR.M) for the five years commencing May 1, 2023 and ending April 30, 2028.

    Series 13 Units and Series 14 Units

    If declared, the fixed quarterly distributions on the Series 13 Units during the five years commencing May 1, 2023 will be paid at an annual rate of 6.05% ($0.378125 per unit per quarter).

    Holders of Series 13 Units have the right, at their option, exercisable not later than 5:00 p.m. (Toronto time) on April 17, 2023, to reclassify all or part of their Series 13 Units, on a one-for-one basis, into Class A Preferred Limited Partnership Units, Series 14 (“Series 14 Units”), effective April 30, 2023.

    The quarterly floating rate distributions on the Series 14 Units will be paid at an annual rate, calculated for each quarter, of 3.00% over the annual yield on three-month Government of Canada treasury bills. The actual quarterly distribution in respect of the May 1, 2023 to July 31, 2023 distribution period for the Series 14 Units, if declared, will be $0.466743 per unit, payable on July 31, 2023.

    Holders of Series 13 Units are not required to elect to reclassify all or any part of their Series 13 Units into Series 14 Units.

    As provided in the unit conditions of the Series 13 Units, (i) if Brookfield Renewable determines that there would be fewer than 1,000,000 Series 13 Units outstanding after April 30, 2023, all remaining Series 13 Units will be automatically reclassified into Series 14 Units on a one-for-one basis effective April 30, 2023; or (ii) if Brookfield Renewable determines that there would be fewer than 1,000,000 Series 14 Units outstanding after April 30, 2023, no Series 13 Units will be reclassified into Series 14 Units. There are currently 10,000,000 Series 13 Units outstanding.

    The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the Series 14 Units effective upon reclassification. Listing of the Series 14 Units is subject to Brookfield Renewable fulfilling all the listing requirements of the TSX and, upon approval, the Series 14 Units will be listed on the TSX under the trading symbol “BEP.PR.N”.

    BEP.PR.M was issued as a FixedReset 5.00%+300M500 ROC that commenced trading 2018-1-16 after being announced 2018-01-09. The issue has been tracked by HIMIPref™ but relegated to the Scraps – FixedReset (Discount) subindex on credit concerns.

    Thanks to Assiduous Reader CanSiamCyp for bringing this to my attention!

  • New Issue: BIP FixedReset 5.35%+464M535

    Brookfield Infrastructure has announced:

    that it has agreed to issue 8,000,000 Cumulative Class A Preferred Limited Partnership Units, Series 5 (“Series 5 Preferred Units”) on a bought deal basis to a syndicate of underwriters led by TD Securities Inc., CIBC Capital Markets, RBC Capital Markets, and Scotiabank. The Series 5 Preferred Units will be issued at a price of $25.00 per unit, for gross proceeds of $200,000,000. Holders of the Series 5 Preferred Units will be entitled to receive a cumulative quarterly fixed distribution at a rate of 5.35% annually for the initial period ending September 30, 2021. Thereafter, the distribution rate will be reset every five years at a rate equal to the greater of: (i) the 5-year Government of Canada bond yield plus 4.64%, and (ii) 5.35%. The Series 5 Preferred Units are redeemable on or after September 30, 2021.

    Holders of the Series 5 Preferred Units will have the right, at their option, to reclassify their Series 5 Preferred Units into Cumulative Class A Preferred Limited Partnership Units, Series 6 (“Series 6 Preferred Units”), subject to certain conditions, on September 30, 2021 and on September 30 every five years thereafter. Holders of Series 6 Preferred Units will be entitled to receive a cumulative quarterly floating distribution at a rate equal to the 90-day Canadian Treasury Bill yield plus 4.64%.

    Brookfield Infrastructure has granted the underwriters an option, exercisable until 48 hours prior to closing, to purchase up to an additional 2,000,000 Series 5 Preferred Units which, if exercised, would increase the gross offering size to $250,000,000.

    The Series 5 Preferred Units will be offered in all provinces and territories of Canada by way of a supplement to Brookfield Infrastructure’s existing short form base shelf prospectus.

    Brookfield Infrastructure intends to use the net proceeds of the issue of the Series 5 Preferred Units for investment opportunities, working capital and other general corporate purposes. The offering of Series 5 Preferred Units is expected to close on or about August 2, 2016.

    Note that this issue has an unusual tax status on its distributions: like BIP.PR.A and BIP.PR.B, the distributions will be comprised of a mixture of ordinary income and return of capital, in what are expected to be approximately equal proportions, but with no guarantees on just what the proportions will be, either for any particular year or in total!

    It will be interesting to see how this issue trades relative to BIP.PR.B, which is a FixedReset, 5.50%+453M550 (Interest + ROC). Readers will note that BIP.PR.B has a lower Issue Reset Spread (453bp vs 464bp) than the new issue, but a higher Minimum Reset Rate (5.50% vs. 5.35%). BIP.PR.B closed today at 25.85-96, 2×5.

  • BEP.PR.I Soft On Good Volume

    Brookfield Renewable Partners L.P. has announced that it has:

    completed its previously announced issue of Cumulative Minimum Rate Reset Class A Preferred Limited Partnership Units, Series 9 (the “Series 9 Preferred Units”). The offering was underwritten by a syndicate led by CIBC Capital Markets, RBC Capital Markets, Scotiabank and TD Securities Inc.

    Brookfield Renewable issued 8,000,000 Series 9 Preferred Units at a price of $25.00 per unit, for total gross proceeds of $200,000,000.

    The Series 9 Preferred Units will commence trading on the Toronto Stock Exchange this morning under the ticker symbol BEP.PR.I.

    BEP.PR.I is a FixedReset, 5.75%+501M575, announced 2016-5-16. The issue will be tracked by HIMIPref™ but has been relegated to the Scraps subindex on credit concerns.

    The prospectus supplement (a public document) is available on the regulator-owned SEDAR with the identifiers “Brookfield Renewable Partners L.P. May 17 2016 19:33:41 ET Prospectus supplement – English PDF 276 K” but I am not permitted to link to it directly since I am mere investor scum without even enough dignity to get a government job. The prospectus notes:

    For Canadian federal income tax purposes, holders of Series 9 Preferred Units will be allocated a portion of the taxable income of the Partnership based on their proportionate share of distributions received on their units. The allocation of taxable income to such holders may be less than the distributions received. This difference is commonly referred to as a tax deferred return of capital (i.e., returns that are initially non-taxable but which reduce the adjusted cost base of the holder’s units). See “Certain Canadian Federal Income Tax Considerations” in this Prospectus Supplement for further details. As shown in the table below, the historical 3 year average per unit Canadian dividends, ordinary income and return of capital (i.e., excess of distributions over allocated taxable income) expressed as a percentage of the annual distributions in respect of units of the Partnership for the period 2013 through 2015 were approximately 61%, 20%, and 19%, respectively. Management anticipates the 5 year average per unit Canadian dividend, ordinary income and return of capital will be 50%, 25%, and 25%, respectively, for the period between 2016 and 2021; however, no assurance can be provided this will occur.

    So be careful! This isn’t your usual distribution taxation status! See the coverage of the first day of trading of BEP.PR.G for an analytical framework.

    BEP.PR.I traded 745,122 shares today (consolidated exchanges) in a range of 24.85-97 before closing at 24.92-95, 5×28. Vital statistics are:

    BEP.PR.I FixedReset YTW SCENARIO
    Maturity Type : Limit Maturity
    Maturity Date : 2046-05-25
    Maturity Price : 23.12
    Evaluated at bid price : 24.92
    Bid-YTW : 5.74 %

    The TXPR index is up about 35bp since the announcement date, so closing below par suggest a very slight softness in the market’s reception of the issue.

  • New Issue: BEP FixedReset, 5.75%+501M575

    Brookfield Renewable Partners L.P. has announced:

    that it has agreed to issue 6,000,000 Cumulative Minimum Rate Reset Class A Preferred Limited Partnership Units, Series 9 (the “Series 9 Preferred Units”) on a bought deal basis to a syndicate of underwriters led by CIBC Capital Markets, RBC Capital Markets, Scotiabank and TD Securities Inc. for distribution to the public. The Series 9 Preferred Units will be issued at a price of $25.00 per unit, for gross proceeds of $150,000,000.

    Holders of the Series 9 Preferred Units will be entitled to receive a cumulative quarterly fixed distribution yielding 5.75% annually for the initial period ending July 31, 2021. Thereafter, the distribution rate will be reset every five years at a rate equal to the greater of (i) the 5-year Government of Canada bond yield plus 5.01%, and (ii) 5.75%. The Series 9 Preferred Units are redeemable on July 31, 2021 and on each Series 9 Reclassification Date (as defined below) thereafter.

    Holders of the Series 9 Preferred Units will have the right, at their option, to reclassify their Series 9 Preferred Units into Cumulative Floating Rate Reset Class A Preferred Limited Partnership Units, Series 10 (the “Series 10 Preferred Units”), subject to certain conditions, on July 31, 2021 and on July 31 every 5 years thereafter (each a “Series 9 Reclassification Date”). Holders of Series 10 Preferred Units will be entitled to receive a cumulative quarterly floating distribution at a rate equal to the 90-day Canadian Treasury Bill yield plus 5.01%.

    Brookfield Renewable has granted the underwriters an option, exercisable until 48 hours prior to closing, to purchase up to an additional 2,000,000 Series 9 Preferred Units which, if exercised, would increase the gross offering size to $200,000,000.

    The Series 9 Preferred Units will be offered in all provinces and territories of Canada by way of a supplement to Brookfield Renewable’s existing Canadian short form base shelf prospectus. The Series 9 Preferred Units may not be offered or sold in the United States or to U.S. persons absent registration or an applicable exemption from the registration requirements under the U.S. Securities Act.

    Brookfield Renewable intends to use the net proceeds of the issue of Series 9 Preferred Units to repay indebtedness. The offering of Series 9 Preferred Units is expected to close on or about May 25, 2016.

    It is my understanding that distributions on the units will be characterized in the same manner as, for instance, the related issue BEP.PR.G:

    According to the prospectus:

    Management anticipates the 5 year average per unit Canadian dividend, ordinary income and return of capital will be 50%, 25%, and 25%, respectively, for the period between 2015 and 2020; however, no assurance can be provided this will occur.

    … but the prospectus supplement is not yet available for this particular new issue. It’s a pity they didn’t include this rather vital information in the press release.

  • BEP.PR.E Listed

    BEP.PR.E, which has resulted from a 41% conversion from BRF.PR.E commenced trading today.

    “Trading” is perhaps a misnomer, because not a single share changed hands; fortunately, the well compensated and strictly supervised market maker stepped up to the plate and the issue closed 16.00-21.00, 9×2, a mere $5 spread.

    BEP.PR.E will be tracked by HIMIPref™ but relegated to the Scraps index on credit concerns.

    BEP.PR.E Perpetual-Discount YTW SCENARIO
    Maturity Type : Limit Maturity
    Maturity Date : 2046-02-11
    Maturity Price : 16.00
    Evaluated at bid price : 16.00
    Bid-YTW : 8.86 %
  • BRF.PR.E: 41% Conversion to BEP.PR.E

    Brookfield Renewable Energy Partners L.P. has announced:

    that as of 5:00 p.m. (Toronto Time) on February 8, 2016, a total of 2,885,496 Class A Preference Shares, Series 5 of Brookfield Renewable Power Preferred Equity Inc. (TSX:BRF.PR.E) (the “Series 5 Preferred Shares”) were validly tendered to its offer to exchange each issued and outstanding Series 5 Preferred Share for one newly issued Class A Preferred Limited Partnership Unit, Series 5 of Brookfield Renewable (the “Exchange Offer”). The Series 5 Preferred Shares tendered to the Exchange Offer represent approximately 41.22% of the issued and outstanding Series 5 Preferred Shares.

    As all conditions of the Exchange Offer have been satisfied, Brookfield Renewable intends to take up and pay for the Series 5 Preferred Shares tendered to the Exchange Offer by issuing a book entry only certificate representing 2,885,496 Class A Preferred Limited Partnership Units, Series 5 of Brookfield Renewable (the “Series 5 Preferred Units”) in registered form to CDS Clearing and Depository Services Inc. The Series 5 Preferred Units are expected to be issued and commence trading on the Toronto Stock Exchange under the symbol “BEP.PR.E” on or about February 11, 2016. Series 5 Preferred Shares not tendered to the Exchange Offer will continue to trade on the Toronto Stock Exchange under the symbol “BRF.PR.E”.

    BRF.PR.E is a Straight Perpetual, 5.00%, which commenced trading 2013-1-29 after being announced 2013-1-21. It is tracked by HIMIPref™ but relegated to the Scraps index on credit concerns.

    BEP.PR.E is a Straight Perpetual, 5.59%, but there is a tax wrinkle on the distributions:

    Management anticipates the 5 year average per unit Canadian dividend, ordinary income and return of capital will be 50%, 25%, and 25%, respectively, for the period between 2015 and 2020; however, no assurance can be provided this will occur.

    The exchange offer was initially announced in November, 2015, extended in December with the prospectus filed shortly thereafter and extended again in January with the minimum tender condition waived.

    BEP.PR.E will be tracked by HIMIPref™ but relegated to the Scraps index on credit concerns.

  • BIP.PR.B Settles Better than Expected On Anemic Volume

    Brookfield Infrastructure has announced:

    the completion of its previously announced issue of Cumulative Class A Preferred Limited Partnership Units, Series 3 (“Series 3 Preferred Units”) in the amount of $125,000,000. The offering was underwritten by a syndicate led by RBC Capital Markets, CIBC, Scotiabank, and TD Securities Inc.

    Brookfield Infrastructure issued 5,000,000 Series 3 Preferred Units at a price of $25.00 per unit, for total gross proceeds of $125,000,000. Holders of the Series 3 Preferred Units will be entitled to receive a cumulative quarterly fixed distribution yielding 5.50% annually for the initial period ending December 31, 2020. Thereafter, the distribution rate will be reset every five years at a rate equal to the greater of: (i) the 5-year Government of Canada bond yield plus 4.53%, and (ii) 5.50%. The Series 3 Preferred Units will commence trading on the Toronto Stock Exchange this morning under the ticker symbol BIP.PR.B.

    BIP.PR.B is a FixedReset, 5.50%+453M550 (Interest + ROC), announced December 1. The issue traded 113,268 shares today (consolidated exchanges) in a range of 24.35-58 before closing at 24.35-40, 8×40.

    Given that the TXPL index is down 6.37% to December 8 from its December 1 level, the issue actually performed a little better than expected; but it remains to be seen how much of that is due to underwriter support. I’d have more confidence in the level if the volume was higher.

    With some trepidation I am including this issue in the HIMIPref™ FixedReset subindex rather than the Interest-Bearing subindex, since I feel that the defining characteristic of the issue is its dividend formula rather than its dividend taxation status. I might change my mind later!

    Vital statistics are:

    BIP.PR.B FixedReset YTW SCENARIO
    Maturity Type : Limit Maturity
    Maturity Date : 2045-12-08
    Maturity Price : 22.92
    Evaluated at bid price : 24.35
    Bid-YTW : 5.61 %
  • New Issue: BIP FixedReset, 5.50%+453M550 (Interest + ROC)

    Brookfield Infrastructure has announced:

    that it has agreed to issue 5,000,000 Cumulative Class A Preferred Limited Partnership Units, Series 3 (“Series 3 Preferred Units”) on a bought deal basis to a syndicate of underwriters led by RBC Capital Markets, CIBC, Scotiabank and TD Securities Inc. The Series 3 Preferred Units will be issued at a price of $25.00 per unit, for gross proceeds of $125,000,000. Holders of the Series 3 Preferred Units will be entitled to receive a cumulative quarterly fixed distribution at a rate of 5.50% annually for the initial period ending December 31, 2020. Thereafter, the distribution rate will be reset every five years at a rate equal to the greater of: (i) the 5-year Government of Canada bond yield plus 4.53%, and (ii) 5.50%. The Series 3 Preferred Units are redeemable on or after December 31, 2020.

    Holders of the Series 3 Preferred Units will have the right, at their option, to reclassify their Series 3 Preferred Units into Cumulative Class A Preferred Limited Partnership Units, Series 4 (“Series 4 Preferred Units”), subject to certain conditions, on December 31, 2020 and on December 31 every 5 years thereafter. Holders of Series 4 Preferred Units will be entitled to receive a cumulative quarterly floating distribution at a rate equal to the 90-day Canadian Treasury Bill yield plus 4.53%.

    Brookfield Infrastructure has granted the underwriters an option, exercisable until 48 hours prior to closing, to purchase up to an additional 2,000,000 Series 3 Preferred Units which, if exercised, would increase the gross offering size to $175,000,000. The Series 3 Preferred Units will be offered in all provinces and territories of Canada by way of a supplement to Brookfield Infrastructure’s existing short form base shelf prospectus.

    Brookfield Infrastructure intends to use the net proceeds of the issue of the Series 3 Preferred Units for investment opportunities, working capital and other general corporate purposes. The offering of Series 3 Preferred Units is expected to close on or about December 8, 2015.

    The sentence “The Series 3 Preferred Units are redeemable on or after December 31, 2020.” is, from what I’ve seen, poorly phrased. My understanding is that it is redeemable at par on every Exchange Date, in line with the accepted structure.

    Investors should be aware that the distributions are expected to be a mixture of ordinary income and return of capital for tax purposes; no Eligible Dividends are expected. The company expects a 50-50 split of the two types of income over the next five years, but of course there are no guarantees! I have been supplied with the following characterization of the past five years:

    Past Composition of BIP Distributions
      2014 2013 2012 2011 2010
    Total distribution $2.1378 $1.7883 $1.4988 $1.3198 $1.1277
    Total taxable income $2.1035 $0.4131 $0.7939 $0.4825 $0.2368
    Return of capital $0.0343 $1.3752 $0.7049 $0.8372 $0.8909
    Income % 98.40% 23.10% 52.97% 36.56% 21.00%
    Return of capital % 1.60% 76.90% 47.03% 63.44% 79.00%

    Sure bounces around a lot, doesn’t it?

    BIP.PR.A was bid at 20.40 today to yield 5.50% to perpetuity … so call these issues more-or-less even yield. This suggests that the new issue is grossly expensive, unless you place a high value on the “dividend floor” feature, which I don’t.

  • BEP.PR.G Soft On Decent Volume

    Brookfield Renewable Energy Partners L.P. has announced:

    the completion of its previously announced issue of Cumulative Minimum Rate Reset Class A Preferred Limited Partnership Units, Series 7 (the “Series 7 Preferred Units”). The offering was underwritten by a syndicate led by TD Securities Inc., CIBC, RBC Capital Markets and Scotiabank.

    Brookfield Renewable issued 7,000,000 Series 7 Preferred Units at a price of $25.00 per unit, for total gross proceeds of $175,000,000.

    The Series 7 Preferred Units will commence trading on the Toronto Stock Exchange this morning under the ticker symbol BEP.PR.G.

    BEP.PR.G is Preferred Units FixedReset 5.50%+447M550, announced November 17. It will be tracked by HIMIPref™ but relegated to the Scraps index on credit concerns. Note that the distribution will be a mixture of dividends, income and return of capital for tax purposes; calculating the after-tax return is complex and will require numerous assumptions!

    The issue is rated Pfd-3(high) by DBRS:

    DBRS Limited (DBRS) has today finalized its provisional rating of Pfd-3 (high) with a Stable trend on Brookfield Renewable Energy Partners L.P.’s (BREP) issuance of Class A Preferred Limited Partnership Units, Series 7 (Preferred LP Units).

    DBRS notes that the Preferred LP Units will rank on parity with every other series of Class A Preferred Limited Partnership Units and will be fully and unconditionally guaranteed by BREP’s key holding subsidiaries (the Guarantors). The Preferred LP Units will rank pari passu at the Guarantor level with the outstanding Preference Shares (rated Pfd-3 (high) by DBRS) of Brookfield Renewable Power Preferred Equity Inc., which are also guaranteed by BREP.

    The issue traded 339,999 shares (consolidated exchanges) in a range of 24.60-94 today before closing at 24.70-75, 57×28. Vital statistics are:

    BEP.PR.G FixedReset YTW SCENARIO
    Maturity Type : Limit Maturity
    Maturity Date : 2045-11-25
    Maturity Price : 23.05
    Evaluated at bid price : 24.70
    Bid-YTW : 5.52 %

    According to the prospectus:

    Management anticipates the 5 year average per unit Canadian dividend, ordinary income and return of capital will be 50%, 25%, and 25%, respectively, for the period between 2015 and 2020; however, no assurance can be provided this will occur.

    This is the same estimate as was used for the coercive BRF.PR.E exchange offer, so we can recycle some analysis!

    According to Ernst & Young, marginal tax rates for an Ontario resident with taxable income of $150,000 p.a. were 46.41% on income, 23.20% on capital gains and 29.52% on eligible dividends. Since the Return of Capital on the new units will eventually be taxed as a capital gain but only when the gain or loss is crystallized, let’s apply a 25% discount to the capital gain marginal rate to reflect the time value of the money; hence, we will assume that the Return of Capital is subject to tax at a rate of 23.20% * 75% = 17.4%:

    Taxation of distributions
      BEP.PR.G
    Distribution
    Type
    Pre Tax Amount Tax Net
    Eligible
    Dividend
    0.6875 0.20295 0.48455
    Ordinary
    Income
    0.34375 0.1595 0.18425
    Return
    of
    Capital
    0.34375 0.0598 0.28395
    Total 1.375 0.42225 0.95275

    So if we accept the given figures as a good enough guess – the after-tax income per share will be 0.95275, equivalent to a dividend of 1.352, a rate of slightly over 5.40%, which is in agreement with the figure Louisprefs supplied as the Scotia estimate in the comments to the announcement post. However, note that there are no guarantees offered by the company! If it should come to pass that 100% of the distributions are ordinary income, then tax at 46.41% will come to 0.6381 and the net after-tax amount will be 0.7369, which is 23% less than the estimate above. So there’s a certain amount of tax-risk here, depending on the nature of the company’s distributions.

    Update, 2015-11-26: S&P has rated the issue P-3(high). On November 4 they degraded the outlook on BREP to stable from positive:

    Standard & Poor’s Ratings Services today said it revised its outlook on Brookfield Renewable Energy Partners L.P. (BREP) to stable from positive. At the same time Standard & Poor’s affirmed its ratings on BREP and subsidiaries Brookfield Renewable Power Preferred Equity Inc. and BRP Finance ULC, including its ‘BBB’ long-term corporate credit rating on BREP.

    The outlook revision reflects our view of the company’s ability to generate strong remittable cash flows from its holdings and its increased level of holding company (holdco) recourse debt. The company has articulated a policy of maintaining relatively low levels of leverage at the holdco level with leverage at the holdco used opportunistically for acquisitions with equity as market conditions allow. However, during the course of the year, the company has made a number of acquisitions that, although partially funded with new equity issuance, maintained a higher level of debt at the holdco. This has resulted in lower credit metrics. “Although the metrics are still comfortably within the range for the rating, we believe that the increased debt will remain at the holdco level for the foreseeable future,” said Standard & Poor’s credit analyst Stephen Goltz.

  • New Issue: BEP Preferred Units FixedReset 5.50%+447M550

    Brookfield Renewable Energy Partners L.P. has announced:

    that it has agreed to issue 5,000,000 Cumulative Minimum Rate Reset Class A Preferred Limited Partnership Units, Series 7 (the “Series 7 Preferred Units”) on a bought deal basis to a syndicate of underwriters led by TD Securities Inc., CIBC, RBC Capital Markets and Scotiabank for distribution to the public. The Series 7 Preferred Units will be issued at a price of $25.00 per unit, for gross proceeds of $125,000,000.

    Holders of the Series 7 Preferred Units will be entitled to receive a cumulative quarterly fixed distribution yielding 5.50% annually for the initial period ending January 31, 2021. Thereafter, the distribution rate will be reset every five years at a rate equal to the greater of (i) the 5-year Government of Canada bond yield plus 4.47%, and (ii) 5.50%. The Series 7 Preferred Units are redeemable on or after January 31, 2021.

    Holders of the Series 7 Preferred Units will have the right, at their option, to reclassify their Series 7 Preferred Units into Cumulative Floating Rate Reset Class A Preferred Limited Partnership Units, Series 8 (“Series 8 Preferred Units”), subject to certain conditions, on January 31, 2021 and on January 31 every 5 years thereafter. Holders of Series 8 Preferred Units will be entitled to receive a cumulative quarterly floating distribution at a rate equal to the 90-day Canadian Treasury Bill yield plus 4.47%.

    Brookfield Renewable has granted the underwriters an option, exercisable until 48 hours prior to closing, to purchase up to an additional 2,000,000 Series 7 Preferred Units which, if exercised, would increase the gross offering size to $175,000,000.

    The Series 7 Preferred Units will be offered in all provinces and territories of Canada by way of a supplement to Brookfield Renewable’s existing Canadian short form base shelf prospectus. The Series 7 Preferred Units may not be offered or sold in the United States or to U.S. persons absent registration or an applicable exemption from the registration requirements under the U.S. Securities Act.

    Brookfield Renewable intends to use the net proceeds of the issue of Series 7 Preferred Units to repay indebtedness and for general corporate purposes. The offering of Series 7 Preferred Units is expected to close on or about November 25, 2015.

    I am assuming that since these are referred to as “Preferred Units” that the distributions will be characterized as a mixture of dividends, ordinary income and return of capital, but I have not yet been able to confirm this; but this would be consistent with the new security they are offering in exchange for BRF.PR.E.

    Update, 2015-11-19: The company announced on November 18:

    that as a result of strong investor demand for its previously announced offering, the underwriters have exercised their option to increase the size of the offering to 7,000,000 Cumulative Minimum Rate Reset Class A Preferred Limited Partnership Units, Series 7 (the “Series 7 Preferred Units”). The Series 7 Preferred Units will be issued at a price of C$25.00 per share, for gross proceeds of C$175,000,000 pursuant to a prospectus supplement filed today. The Series 7 Preferred Units are being offered on a bought deal basis to a syndicate of underwriters led by TD Securities Inc., CIBC, RBC Capital Markets and Scotiabank for distribution to the public.