BAM.PR.R / BAM.PR.S : 14% Conversion To FloatingReset

Brookfield Asset Management Inc. has announced:

the results of the exercise of the conversion privilege for its Class A Preference Shares, Series 24 (the “Series 24 Preferred Shares”) (TSX: BAM.PR.R) and its Class A Preference Shares, Series 25 (the “Series 25 Preferred Shares”) (TSX: BAM.PR.S).

Holders of the company’s Series 24 Preferred Shares and Series 25 Preferred Shares had the right to exchange their shares for the other series effective June 30, 2016, if they submitted an election to convert their shares on a one-for-one basis prior to June 15, 2016. Holders of 1,533,133 Series 24 Preferred Shares have elected to convert these shares into an equivalent number of Series 25 Preferred Shares.

These conversions will be effective on July 1, 2016. Following these conversions, there will be 9,436,867 Series 24 Preferred Shares and 1,533,133 Series 25 Preferred Shares issued and outstanding.

For the five years commencing July 1, 2016, the Series 24 Preferred Shares pay a fixed rate dividend, if declared, at an annual rate of 3.014% (C$0.188375 per share per quarter).

The Series 25 Preferred Shares pay quarterly floating rate dividend, if declared, calculated for each quarter, of 2.30% over the annual yield on three-month Government of Canada treasury bills. The actual quarterly dividend rate in respect of the July 1, 2016 to September 30, 2016 dividend period for the Series 25 Shares will be 0.71861% (2.851% on an annualized basis) and the dividend, if declared, for such dividend period will be C$0.1796525 per share, payable on September 30, 2016.

Holders of the company’s Series 24 and Series 25 Preferred Shares will again have the opportunity to convert their shares into the other series effective June 30, 2021 and every five years thereafter.

Assiduous Readers will remember that I recommended against conversion after reporting that BAM.PR.R will reset to 3.014% (a drop of 44%).

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