New Issue: BAM FixedReset 4.80% + 296

Brookfield Asset Management has announced:

that it has agreed to issue 7,000,000 Preferred Shares, Series 30 on a bought deal basis to a syndicate of underwriters led by CIBC, RBC Capital Markets, Scotia Capital Inc. and TD Securities Inc. for distribution to the public. The Preferred Shares, Series 30 will be issued at a price of $25.00 per share, for aggregate gross proceeds of CDN$175,000,000. Holders of the Preferred Shares, Series 30 will be entitled to receive a cumulative quarterly fixed dividend yielding 4.80% annually for the initial period ending December 31, 2017. Thereafter, the dividend rate will be reset every five years at a rate equal to the 5-year Government of Canada bond yield plus 2.96%.

Holders of Preferred Shares, Series 30 will have the right, at their option, to convert their shares into cumulative Preferred Shares, Series 31, subject to certain conditions, on December 31, 2017 and on December 31 every five years thereafter. Holders of the Preferred Shares, Series 31 will be entitled to receive cumulative quarterly floating dividends at a rate equal to the three-month Government of Canada Treasury Bill yield plus 2.96%.

Brookfield Asset Management Inc. has granted the underwriters an option, exercisable until 48 hours prior to closing, to purchase up to an additional 3,000,000 Preferred Shares, Series 30 which, if exercised, would increase the gross offering size to $250,000,000. The Preferred Shares will be offered in all provinces of Canada by way of a supplement to Brookfield Asset Management Inc.’s existing short form base shelf prospectus dated June 7, 2011.

The net proceeds of the issue will be used for general corporate purposes.

Given that BAM agreed on October 19 to take up 30% of the $588-million BIP.UN new issue, I suggest that it’s not too hard to figure out what those “general corporate purposes” might be!

Update: Provisional Pfd-2(low) from DBRS.

Update, 2011-11-14: Finalized Pfd-2(low) from DBRS.

One Response to “New Issue: BAM FixedReset 4.80% + 296”

  1. […] is a FixedReset, 4.80%+296 announced October 24; the $250-million size is an increase from the originally anticipated […]

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