PrefBlog

Brookfield Asset Management Inc. has announced (on 2021-6-1):

that it has determined the fixed dividend rate on its Cumulative Class A Preference Shares, Series 24 (“Series 24 Shares”) (TSX: BAM.PR.R) for the five years commencing July 1, 2021 and ending June 30, 2026, and also determined the quarterly dividend on its floating rate Cumulative Class A Preference Shares, Series 25 (“Series 25 Shares”) (TSX: BAM.PR.S).

If declared, the fixed quarterly dividends on the Series 24 Shares during the five years commencing July 1, 2021 will be paid at an annual rate of 3.237% ($0.2023125 per share per quarter).

Holders of Series 24 Shares have the right, at their option, exercisable not later than 5:00 p.m. (Toronto time) on June 15, 2021, to convert all or part of their Series 24 Shares, on a one-for-one basis, into Series 25 Shares, effective June 30, 2021. The quarterly floating rate dividends on the Series 25 Shares will be paid at an annual rate, 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, 2021 to September 30, 2021 dividend period will be 0.6072% (2.409% on an annualized basis) and the dividend, if declared, for such dividend period will be $0.1518 per share, payable on September 30, 2021.

Holders of Series 25 Shares also have the right, at their option, exercisable not later than 5:00 p.m. (Toronto time) on June 15, 2021, to convert all or part of their Series 25 Shares, on a one-for-one basis, into Series 24 Shares, effective June 30, 2021. Holders of the Series 25 Shares who elect to convert their shares by the conversion deadline will receive Series 24 Shares, effective June 30, 2021 and will be entitled to receive, if declared, the fixed-rate dividend as described above.

Holders of Series 24 Shares are not required to elect to convert all or any part of their Series 24 Shares into Series 25 Shares and holders of Series 25 Shares are not required to elect to convert all or any part of their Series 25 Shares into Series 24 Shares.

As provided in the share conditions of the Series 24 Shares, (i) if Brookfield determines that there would be fewer than 1,000,000 Series 24 Shares outstanding after June 30, 2021, all remaining Series 24 Shares will be automatically converted into Series 25 Shares on a one-for-one basis effective June 30, 2021; and (ii) if Brookfield determines that there would be fewer than 1,000,000 Series 25 Shares outstanding after June 30, 2021, no Series 24 Shares will be permitted to be converted into Series 25 Shares. There are currently 9,278,894 Series 24 Shares outstanding.

Similarly, as provided in the share conditions of the Series 25 Shares, (i) if Brookfield determines that there would be fewer than 1,000,000 Series 25 Shares outstanding after June 30, 2021, all remaining Series 25 Shares will be automatically converted into Series 24 Shares on a one-for-one basis effective June 30, 2021; and (ii) if Brookfield determines that there would be fewer than 1,000,000 Series 24 Shares outstanding after June 30, 2021, no Series 25 Shares will be permitted to be converted into Series 24 Shares. There are currently 1,529,133 Series 25 Shares outstanding.

They later announced (on 2021-6-23):

that 28,961 of its Cumulative Class A Preference Shares, Series 24 (the “Series 24 Shares”) (TSX: BAM.PR.R) and 658,612 of its Cumulative Class A Preference Shares, Series 25 (the “Series 25 Shares”) (TSX: BAM.PR.S) were tendered for conversion into Series 25 Shares and Series 24 Shares, respectively.

Brookfield currently has 9,278,894 Series 24 Shares and 1,529,133 Series 25 Shares outstanding. After taking into account all shares tendered for conversion, there would be less than one million Series 25 Shares outstanding on June 30, 2021, the conversion date. Accordingly, as provided in the share conditions of the Series 25 Shares, all remaining Series 25 Shares will be automatically converted into Series 24 Shares on a one-for-one basis effective June 30, 2021 (“automatic conversion”). There will be no conversion of Series 24 Shares tendered for conversion into Series 25 Shares, and holders of Series 24 Shares will retain their Series 24 Shares.

Following the automatic conversion, there will be 10,808,027 Series 24 Shares and no Series 25 Shares issued and outstanding. Holders of Series 25 Shares will receive a dividend of $0.147905 per share payable on June 30, 2021 in respect of the April 1, 2021 to June 30, 2021 floating rate period. If declared, the fixed quarterly dividends on the Series 24 Shares during the five years commencing July 1, 2021 will be paid at an annual rate of 3.237% ($0.2023125 per share per quarter). The Series 25 Shares will be de-listed from the Toronto Stock Exchange effective as of close of trading on June 30, 2021.

BAM.PR.R was issued as a FixedReset, 5.40%+230, that commenced trading 2010-1-14 after being announced 2010-1-5. It reset to 3.014% in 2016; I recommended against conversion but there was a 14% conversion to the FloatingReset BAM.PR.S anyway.

BAM.PR.S was a FloatingReset, Bills+230, that arose via a partial conversion from the FixedReset BAM.PR.R.

This entry was posted on Sunday, August 8th, 2021 at 12:26 pm and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.