PrefBlog

Brookfield Corporation has announced:

that it has determined the fixed dividend rate on its Cumulative Class A Preference Shares, Series 32 (“Series 32 Shares”) (TSX: BN.PF.A) for the five years commencing October 1, 2023 and ending September 30, 2028.

If declared, the fixed quarterly dividends on the Series 32 Shares during the five years commencing October 1, 2023 will be paid at an annual rate of 6.744% ($0.4249644 per share per quarter – inoperable. See BN.PF.A : No Daycount Factor on Dividends).

Holders of Series 32 Shares have the right, at their option, exercisable not later than 5:00 p.m. (Toronto time) on September 15, 2023, to convert all or part of their Series 32 Shares, on a one-for-one basis, into Cumulative Class A Preference Shares, Series 33 (the “Series 33 Shares”), effective September 30, 2023. The quarterly floating rate dividends on the Series 33 Shares will be paid at an annual rate, calculated for each quarter, of 2.90% over the annual yield on three-month Government of Canada treasury bills. The actual quarterly dividend rate in respect of the October 1, 2023 to December 31, 2023 dividend period for the Series 33 Shares will be 2.03081% (8.057% on an annualized basis) and the dividend, if declared, for such dividend period will be $0.5077025 per share, payable on December 31, 2023.

Holders of Series 32 Shares are not required to elect to convert all or any part of their Series 32 Shares into Series 33 Shares.

As provided in the share conditions of the Series 32 Shares, (i) if Brookfield determines that there would be fewer than 1,000,000 Series 32 Shares outstanding after September 30, 2023, all remaining Series 32 Shares will be automatically converted into Series 33 Shares on a one-for-one basis effective September 30, 2023; and (ii) if Brookfield determines that there would be fewer than 1,000,000 Series 33 Shares outstanding after September 30, 2023, no Series 32 Shares will be permitted to be converted into Series 33 Shares. There are currently 11,750,299 Series 32 Shares outstanding.

The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the Series 33 Shares effective upon conversion. Listing of the Series 33 Shares is subject to Brookfield fulfilling all the listing requirements of the TSX.

BN.PF.A was issued as BAM.PF.A, a FixedReset 4.50%+290 that commenced trading 2012-3-13 after being announced 2012-3-5. The issue reset at 5.061% in 2018; I recommended against conversion; and there was no conversion. The ticker changed to BN.PF.A in late 2022. It is tracked by HIMIPref™ and assigned to the FixedResets subindex.

Thanks to Assiduous Reader Joel A for bringing this to my attention!

Update, 2023-09-06: See also BN Silent Regarding BN.PF.A Daycount Dividends
Update, 2023-09-08: See also BN.PF.A : No Daycount Factor on Dividends

This entry was posted on Friday, September 1st, 2023 at 10:16 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.