New Issue: BAM 5.00% 5-Year Retractible

It’s been a long time since an investment grade Operating Retractible issue came out!

Issue: Brookfield Asset Management 5.00% Cumulative Class A Preference Shares, Series 21

Size: 6-million shares @ $25.00 (= $150-million); Greenshoe for 1-million shares (= $25-million) exercisable prior to closing.

Dividends: $1.25 p.a.; Long first dividend of $0.3299 planned for September 30

Redemption: Redeemable at $25.00 on and after 2013-6-30; Company may substitute common shares at greater 95% of market or $2

Retraction: Retractible into common at greater of 95% of market and $2. Company may elect to substitute cash.

Ratings: S&P: P-2; DBRS: Pfd-2(low)

Closing: 2008-6-25

Other BAM retractibles are BAM.PR.H, BAM.PR.I and BAM.PR.J

More later.

Later, More: Comparables – at intra-day prices – are:

BAM Retractibles
Issue Quote
BAM.PR.H 25.82-29 4.26% Call
BAM.PR.I 25.60-75 4.99% SoftMaturity
BAM.PR.J 25.00-29 5.41% SoftMaturity
BAM.PR.? 25.00
5.01% SoftMaturity

The BAM.PR.H are interesting … callable at 25.75 commencing 2008-9-30, redemption price declines by $0.25 annually until 2011-9-30, callable at $25.00 thereafter; retractible into shares commencing 2012-3-31; yield until the softMaturity 2012-3-30 is 4.76%.

The new issue is nice – it’s very nice to see a new issue eligible for the OpRet index! – but appears to be no more than fairly priced relative to the extant BAM retractibles.

7 Responses to “New Issue: BAM 5.00% 5-Year Retractible”

  1. like_to_retire says:

    I still kinda like BAM.PR.J, and I recently added to my position when it was skirting around par – I couldn’t pass up the oportunity to lower my cost base even more, collecting over 5% until 2018 with a retractable just seems smart to me.

    Unlike my purchase of PWF.PR.L recently, where I thought I was so smart in my acquisition , and of course, it has since betrayed me and dropped to a new low.

    It’s nothing of course, against the drop I have suffered in the last year with my SLF.PR.D position. Oh, whoa is me, there’s no justice in preferreds. hehehe


  2. jiHymas says:

    No justice nowadays, anyway, what with the recent precipituous decline!

    But as long as they keep paying their dividend, I’m happy …

  3. prefhound says:

    Since we often comment how many BAM/BPO issues there are (attempting to explain low yields on the likes of BAM.PR.M/N, for example), it will be interesting to see if this new retractible BAM issue gets a good reception. I, for one, have sufficient BAM exposure, so will have to sit on the sidelines here.

  4. prefhound says:

    Sorry, should have been “low prices”/”high yields” on BAM.PR.N/M not “low yields” for sure.

  5. jiHymas says:

    Interesting indeed, to see what a new issue does to a market I’ve been thinking is saturated! Perhaps they were approached by a dealer who felt that the Loblaw new issue had sold well and couldn’t resist a 5% coupon.

  6. […] Let’s see if these overpaid jokers can get it right tomorrow, when, I suspect, the excitement will be regarding BAM Flambé. […]

  7. […] issue suffered through its timing, having been announced on June 16 during the Swoon in […]

Leave a Reply

You must be logged in to post a comment.