New Issue: BNA 7-Year Split, 4.50%

Partners Value Split Corp. has announced (although not yet on their website [update: here it is]):

that it has entered into an agreement to sell 8,000,000 Class AA Preferred Shares, Series 6 (the “Series 6 Preferred Shares”) to a syndicate of underwriters led by Scotiabank, CIBC, RBC Capital Markets, and TD Securities Inc. on a bought deal basis. The Series 6 Preferred Shares will be issued at a price of $25.00 per share, for gross proceeds of $200,000,000. The Series 6 Preferred Shares will carry a fixed coupon of 4.50% and will have a final maturity of October 8, 2021. The Series 6 Preferred Shares have a provisional rating of Pfd-2 (low) from DBRS. The net proceeds of the offering will be used to redeem the Company’s outstanding Class AA Preferred Shares, Series 4 and to pay a special cash dividend to holders of the Company’s capital shares.

The Company has granted the underwriters an option, exercisable at any time, not later than 30 days after closing, to purchase up to an additional 1,200,000 Series 6 Preferred Shares, which, if exercised, would increase the gross offering size to $230,000,000. Closing of the offering is expected to occur on or about July 4, 2014.

The Company owns a portfolio consisting of 53,160,644 Class A Limited Voting Shares of Brookfield Asset Management Inc. (the “Brookfield Shares”), which is expected to yield quarterly dividends that are sufficient to fund quarterly fixed cumulative preferential dividends for the holders of the Company’s preferred shares and to enable the holders of the Company’s capital shares to participate in any capital appreciation of the Brookfield Shares. Brookfield Asset Management Inc. (“Brookfield”) is a global alternative asset manager with over $175 billion in assets under management. Brookfield has over a 100-year history of owning and operating assets with a focus on property, renewable energy, infrastructure and private equity and is co-listed on the New York and Toronto Stock Exchanges under the symbols BAM and BAM.A, respectively, and on NYSE Euronext under the symbol BAMA.

This issue is more-or-less in-line with BNA’s other issues at today’s close:

Comparison of BNA issues
Ticker Bid Yield-to-Maturity Maturity
BNA.PR.B 25.46 3.96% 2016-3-25
BNA.PR.E 25.57 4.20% 2017-12-10
BNA.PR.C 24.96 4.44% 2019-1-10
New Issue 25.00 4.50% 2021-10-8

Update, 2014-6-19: Rated Pfd-2(low) by DBRS.

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