{"id":12649,"date":"2010-10-21T16:23:40","date_gmt":"2010-10-21T20:23:40","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=12649"},"modified":"2010-10-21T16:23:40","modified_gmt":"2010-10-21T20:23:40","slug":"new-issue-bam-fixedreset-4-5231","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=12649","title":{"rendered":"New Issue: BAM FixedReset 4.5%+231"},"content":{"rendered":"

Brookfield Asset Management has announced<\/a>:<\/p>\n

that it has agreed to issue to a syndicate of underwriters led by CIBC, RBC Capital Markets, Scotia Capital Inc. and TD Securities Inc. for distribution to the public 8,000,000 Preferred Shares, Series 26. The Preferred Shares, Series 26 will be issued at a price of $25.00 per share, for aggregate gross proceeds of CDN$200,000,000. Holders of the Preferred Shares, Series 26 will be entitled to receive a cumulative quarterly fixed dividend yielding 4.50% annually for the initial period ending March 31, 2017. Thereafter, the dividend rate will be reset every five years at a rate equal to the 5-year Government of Canada bond yield plus 2.31%.<\/p>\n

Holders of Preferred Shares, Series 26 will have the right, at their option, to convert their shares into cumulative Preferred Shares, Series 27, subject to certain conditions, on March 31, 2017 and on March 31 every five years thereafter. Holders of the Preferred Shares, Series 26 will be entitled to receive cumulative quarterly floating dividends at a rate equal to the three-month Government of Canada Treasury Bill yield plus 2.31%.<\/p>\n

Brookfield Asset Management Inc. has granted the underwriters an option, exercisable in whole or in part prior to closing, to purchase an additional 2,000,000 Preferred Shares, Series 26 at the same offering price. The Preferred Shares will be offered by way of prospectus supplement under the short form base shelf prospectus of Brookfield Asset Management Inc. dated January 12, 2009, as amended. The prospectus supplement will be filed with securities regulatory authorities in all provinces of Canada.<\/p>\n

The net proceeds of the issue will be added to the general funds of Brookfield Asset Management Inc. and be used for general corporate purposes.<\/p><\/blockquote>\n

Yesterday, BAM issued 10-year notes<\/a>:<\/p>\n

an offering of C$350 million of senior notes (unsecured) (\u201cnotes\u201d) with a March 1, 2021 maturity and a yield of 5.3%.<\/p>\n

The notes have been assigned a credit rating of Baa2 (stable outlook) by Moody\u2019s; A- (negative outlook) by Standard & Poor\u2019s; BBB (stable outlook) by Fitch; and A low (stable outlook) by DBRS.<\/p>\n

The notes are being offered through a syndicate of agents led by CIBC World Markets Inc., RBC Capital Markets and TD Securities Inc.<\/p>\n

The net proceeds of the issue will be used to refinance existing indebtedness and for general corporate purposes. <\/p><\/blockquote>\n

This comes on top of the recent BPO 5.15%+300 FixedReset<\/a> and news that the group is selling a chunk of Brookfield Renewable Power Fund<\/a>. So they’ve been active! I wonder if something is in the wind?<\/p>\n

We can take a stab at valuing these things with the BreakEven Rate Shock Calculator<\/a> … using values of 5.85% as the yield on BAM’s PerpetualDiscounts and a yield spread of -1.35% to the FixedReset initial rate, with a term to reset of 6.5 years we get a Break Even Rate Shock of 224bp … pretty hefty, but by no means recordbreaking.<\/p>\n

Additionally, we can look at the BAM.PR.R 5.40%+230 FixedReset<\/a>, which has its first reset date 2016-6-30, nine months before the new issue’s. Interestingly, the Issue Reset Spreads are virtually identical for these two issues, although the initial fixed rate is lower for the new issue. BAM.PR.R will pay 90bp p.a. less than the new issue until reset, or $0.225 p.a., and is trading at around 25.80. The new issue looks a little rich.<\/p>\n

Update, 2010-11-15<\/b>: BAM did an almost simultaneous bond deal<\/a>:<\/p>\n

Following a bunch of debt and equity financings by its some of its subsidiaries, Brookfield Asset Management Inc. (BAM.A-T30.350.130.43%) came to market this morning with a $200-million preferred share offering. The deal comes a day after BAM tapped debt markets for $350-million of 10-year senior unsecured notes that pay 5.3 per cent.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

Brookfield Asset Management has announced: that it has agreed to issue to a syndicate of underwriters led by CIBC, RBC Capital Markets, Scotia Capital Inc. and TD Securities Inc. for distribution to the public 8,000,000 …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17],"tags":[],"class_list":["post-12649","post","type-post","status-publish","format-standard","hentry","category-new-issues"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/12649","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12649"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/12649\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12649"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12649"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12649"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}