BEP.PR.K : “Potential Redemption”

In connection with its announcement of a new issue of 5.50% Straight Perpetuals, Brookfield Renewable Partners L.P. has announced (emphasis added):

Brookfield Renewable intends to use the net proceeds from this offering to finance and/or refinance investments made in renewable power generation assets or businesses and to support the development of clean energy technologies that constitute Eligible Investments, including the potential redemption of all or a portion of the Partnership’s Class A Preferred Limited Partnership Units, Series 11 on April 30, 2022.

BEP.PR.K is a FixedReset, 5.00%+382M500, that commenced trading 2017-2-14 after being announced 2017-2-7. Note that distributions on this security have been a mix of ordinary income and return of capital. It has been tracked by HIMIPref™ but relegated to the Scraps subindex on credit concerns.

Note that this is a ‘Potential Redemption’ only. Redemptions only become offical when a formal notice of redemption is issued.

Update, 2022-4-5-11:50pm: The company has announced (at 8:14pm, according to SEDAR):

that it intends to redeem all of its outstanding Class A Preferred Limited Partnership Units, Series 11 (the “Series 11 Preferred Units”) (TSX: BEP.PR.K) for cash on April 30, 2022. The redemption price for each Series 11 Preferred Unit will be C$25.00. Holders of Series 11 Preferred Units of record as of April 14, 2022 will receive the previously declared final quarterly distribution of C$0.3125 per Series 11 Preferred Unit.

I will leave it to the lawyers to argue about the meaning of “intends” as opposed to “potential”.

2 Responses to “BEP.PR.K : “Potential Redemption””

  1. peet says:

    The vagueness of the language about a “potential” redemption of “all or a portion” of Series 11 got me thinking about the conversion right into Series 12.

    The prospectus is quite clear that various written notices had to be sent out by the Partnership with respect to the conversion of Series 11 into the floater Series 12 …

    UNLESS (the prospectus goes on to say)

    “If the Partnership gives notice to the registered holders of the Series 11 Preferred Units of the REDEMPTION on a Series 11 Reclassification Date of ALL the Series 11 Preferred Units, the Partnership will NOT be required to give notice” (emphasis added).

    I assume this is the provision relied upon by the Partnership for their silence to date on any conversion rights, but strictly speaking their notice of a “potential” redemption and, to boot, not necessarily of “all” the units, did not comply with the prospectus.

    It would be interesting to see what response one would get if one now elected to convert :-).

  2. peet says:

    The SEDAR posting is at 22.14 PM (not 8.14 PM) and removed all mention of “potential” and “all or a portion”. Dare one think someone in the back office reads Prefblog?
    :-).

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