So BPO preferreds got hammered again today, with losses of about 10% of market value and will doubtless dominate the list of new 52-week lows reported in the Globe tomorrow, as they have done for the past two weeks.
So, what’s going on?
It seems to have started with a SEC filing by Brookfield DTLA Fund Office Trust Investor Inc.:
Subsidiaries of Brookfield DTLA Fund Office Trust Investor Inc. (the “Company”) have secured loans of $465.0 million on Gas Company Tower, comprised of a $350.0 million mortgage loan, a $65.0 million mezzanine loan and a $50.0 million junior mezzanine loan (collectively, the “Gas Company Tower Loans”). There is $465.0 million currently outstanding under the Gas Company Tower Loans. The initial maturity date of the Gas Company Tower Loans was February 9, 2023, with three one-year extension options. The Company did not exercise the option to extend the maturity of the loans and therefore, on February 9, 2023, the Gas Company Tower Loans matured, and an Event of Default (as defined in the underlying loan agreements) has occurred and is continuing. The lenders may exercise their remedies under the loans, including foreclosing on Gas Company Tower. As of the date of this filing, the lenders have not exercised any of their remedies under the Gas Company Tower Loans
Other Subsidiaries of the Company have secured loans of $318.6 million on 777 Tower, comprised of a $268.6 million mortgage loan and a $50.0 million mezzanine loan (collectively, the “777 Tower Loans”). There is $288.9 million currently outstanding under the 777 Tower Loans. The Company did not obtain an Interest Rate Protection Agreement (as defined in the underlying loan agreements) which constitutes an Event of Default (as defined in the underlying loan agreements). Wells Fargo Bank, National Association, as Administrative Agent for the lenders under the mortgage loan, has notified the relevant subsidiary of the Company that defaults and potential defaults have occurred under the loan and that the lenders have the right to exercise their remedies under the 777 Tower Loans, including, without limitation, declaring the debt to be immediately due and payable and foreclosing on 777 Tower. As a result of the default under the mortgage loan, an Event of Default (as defined in the underlying loan agreements) has occurred and is continuing under the mezzanine loan. As of the date of this filing, the lenders have not exercised any of their remedies under the 777 Tower Loans.
This was picked up by Business Insider in a 2023-3-30 story later syndicated to Yahoo:
Gas Company Tower was once a gleaming model of downtown America’s ascendancy. Located squarely in Los Angeles’ central business district, the 52-story skyscraper has a strong pedigree. It’s home to a collection of major corporate tenants, including the Southern California Gas Company, the white-shoe law firm Sidley Austin, and Deloitte, one of the Big Four accounting firms. Its owner, Brookfield, is an $800 billion investment firm known for its blue-chip portfolio of real-estate assets. The tower’s lobby even had a Hollywood cameo when it was featured in the opening shot of the 1994 film “Speed.”
More recently, though, the glassy office property has become an example of the alarming financial turmoil that is engulfing once-bedrock real-estate assets. Brookfield disclosed in a February filing that a subsidiary it controls had defaulted on $753.9 million worth of debt tied to the tower and another nearby office building — one of the largest since the great financial crisis. But as Brookfield grapples with its lenders, it’s also facing a potential exodus of the building’s most visible occupants.
The Southern California Gas Company, the Gas Company Tower’s namesake tenant, is in the market to relocate its 360,000 square feet at the property. Sidley Austin, which has about 136,000 square feet in the 1991-vintage building, is also prowling the market for new space, according to two people with knowledge of both tenants’ real-estate decision-making. Spokespeople for Sidley and Brookfield declined to comment. A spokesperson for the Southern California Gas Company did not reply to a request for comment.
This report was further fleshed out by RealDeal:
Brookfield has admitted one of its trophy office towers in Downtown L.A. has lost a quarter of its value, thanks to L.A.’s new transfer taxes.
The investment firm wrote down the value of its 45-story office tower at 355 South Grand Avenue — the South Tower of the Wells Fargo Center — by $111 million, according to an annual report released by Brookfield’s entity that owns six office buildings and one retail center in Downtown L.A.
The publicly traded fund, called Brookfield DTLA Fund Office Trust Investor, blamed the writedown on Measure ULA — the City of L.A.’s new transfer tax that will take 5.5 percent from all commercial and residential sales that trade for more than $10 million, according to its report.
The writedown marks the first time Brookfield has drastically cut the value of one of its Downtown L.A. holdings, which have been affected by the dual triggers of high vacancy rates and high interest rates.
The connection is explained by another helpful SEC filing:
This information statement (“Information Statement”) is being furnished by Brookfield DTLA Fund Office Trust Investor Inc., a Maryland corporation (the “Company”, “we”, “our” or “us”), in connection with the Annual Meeting
…
As of the Record Date, Brookfield DTLA Holdings LLC, a Delaware limited liability company (“DTLA Holdings”, and together with its affiliates excluding the Company and its subsidiaries, the “Manager”), was the holder of all of the issued and outstanding shares of Common Stock.DTLA Holdings is an indirect partially- owned subsidiary of Brookfield Property Partners L.P. (“BPY”), one of the world’s premier real estate companies and a subsidiary of Brookfield Asset Management Inc. (“Brookfield Asset Management” or “BAM”), a leading global alternative asset manager with approximately $750 billion in assets under management. DTLA Holdings is entitled to vote on the election of five directors, the ratification of the selection of Deloitte & Touche LLP as the Company’s independent registered public accounting firm and on each other matter properly presented at the Annual Meeting. As of the Record Date, there were 1,000 shares of Common Stock outstanding.
DTLA has a balance sheet that is … interesting. Negative equity for the common shareholder, just barely outweighed by the ‘mezzanine equity’ of the preferred shares issued by the company, and 2.3-billion in debt secured by assets with a stated value of 2.5-billion. Succinctly:
Brookfield DTLA’s business requires continued access to adequate cash to fund its liquidity needs. The amount of cash Brookfield DTLA currently generates from its operations is not sufficient to cover its investing and financing activities, including upcoming debt obligations, leasing costs and capital expenditures, without issuing additional debt or equity, resulting in “negative cash burn,” and there can be no assurance that the amount of Brookfield DTLA’s negative cash burn will decrease. If Brookfield DTLA’s operating cash flows and capital are not sufficient to cover its operating costs or to repay its indebtedness as it comes due, we may issue additional debt and/or equity, including to affiliates of Brookfield DTLA, which issuances could further adversely impact the amount of funds available to Brookfield DTLA for any purpose, including for dividends or other distributions to holders of its capital stock, including the Series A preferred stock. Given the uncertainty in the economy, current office leasing volume and volatile financial markets created by the continued rise in interest rates and the Company’s upcoming debt maturities, management believes that access to liquidity will be challenging and is planning accordingly. We are also working to proactively address challenges to our long-term liquidity position. However, if uncertainty in the economy and financial and leasing markets do not improve, or the Company is not able to find additional sources of liquidity, the property-owning subsidiary debt obligors may not be able to successfully refinance the debt obligations when they fall due, which could result in foreclosure on the encumbered properties.
A mess, and now the company has announced:
Brookfield DTLA Fund Office Trust Investor Inc. (the “Company”) announced today that its board of directors (the “Board”) has approved the voluntary delisting of the Company’s 7.625% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share (the “Preferred Shares”) from the New York Stock Exchange (the “NYSE”). The Board believes that its decision to delist and deregister the Preferred Shares will better enable the Company to maximize value for all stakeholders, including the holders of the Preferred Shares. The Company also gave notice to the NYSE of its intent to voluntarily delist the Preferred Shares and to withdraw the registration of the Preferred Shares with the Securities and Exchange Commission (the “SEC”). The Preferred Shares are currently listed on the NYSE under the symbol “DTLA-P.”
…
The delisting and deregistration of the Preferred Shares will not have any impact on the terms or conditions of the Preferred Shares, including the dividends payable on the Preferred Shares and the rights granted to holders of the Preferred Shares to appoint two directors to the Board under certain circumstances. After the delisting and deregistration of the Preferred Shares, the Company intends to continue to make unaudited annual and quarterly financial statements available to investors. The Company also will seek to have the Preferred Shares quoted on the Pink Sheets Electronic Quotation Service (the “Pink Sheets”) in the OTC Pink Limited Information marketplace, although it cannot provide any assurance that any broker-dealer will make a market in the Preferred Shares, which is a requirement for Pink Sheet quotation.
So it’s a mess, but misery loves company and there’s a lot of love in the air:
The humdrum business of renting out offices and stores is suddenly in the spotlight as property experts and economists warn that growing problems in U.S. commercial real estate could trigger a new financial crisis.
Among the people raising alarms is Scott Rechler, chief executive officer of RXR Realty, a large property manager in New York, and a director of the Federal Reserve Bank of New York.
In a Twitter thread last week, Mr. Rechler warned that US$1.5-trillion in commercial real estate debt will mature over the next three years. Most of it was taken out when interest rates were near zero.
…
Somewhat similarly Neil Shearing, group chief economist at Capital Economics, warned that a “doom loop” could emerge in which falling commercial real estate values feed back into the U.S. banking system, choking off lending and creating further declines in commercial property prices.
…
Still, it’s far from certain that the worst case will materialize.For one thing, the commercial real estate sector is made up of several distinct subsectors. While office and retail landlords are struggling, some other areas, such as industrial properties, have held up just fine, while still others, such as hotel properties, are actually seeing conditions improve as the economy reopens and travel resumes.
Taken as a whole, the commercial real estate sector doesn’t look so bad. Delinquent mortgages – that is, those on which payments have been overdue for at least 30 days – are rising in number, but the statistics are still a long way from panic levels.
In February, 3.12 per cent of U.S. commercial mortgages were delinquent, according to data tracker Trepp Inc. That is slightly higher than the 2.98 per cent recorded six months earlier but far below the record 10.34 per cent recorded in July, 2012.
OK, so the owners are keeping their mortgages current – for now – but some of them will be struggling to do so. And meanwhile:
Slate Office REIT is slashing its monthly distribution by 70 per cent, making it Canada’s second publicly traded office building owner to cut its payout in the span of three weeks as vacancies rise and higher interest rates bite.
Slate, which owns office properties in Canada and the United States but derives half of its operating income from the Greater Toronto Area and Atlantic Canada, slashed its distribution to 1 cent per unit monthly from 3.3 cents after a strategic review. Slate’s units, which trade on the Toronto Stock Exchange, dropped 25 per cent Wednesday and are down 43 per cent this year.
True North Commercial, which owns office properties across Canada but focuses on Ontario, slashed its own distribution by 50 per cent in mid-March. The REIT is run by Daniel Drimmer, one of Canada’s largest property owners through a mix of private and publicly traded businesses. Like Slate, True North’s unit price also tanked after the decision and its units are now down 45 per cent this year.
Higher interest rates have weighed on most real estate investment trusts because they carry mortgages often amounting to between 50 per cent and 60 per cent of their property values. Like homeowners, REITs usually only face higher rates when their mortgages come up for renewal. But some, such as Slate, had sizable exposure to variable-rate mortgages.
Me, I blame millennials:
Canada’s downtown office vacancy rate reached 19 per cent in March, with Toronto and Vancouver driving the trend as the shift to hybrid work pushes more businesses to give up office space.
The level of vacancies was nearly double the 10.8 per cent in downtown markets before the start of the pandemic, according to new data from commercial real estate firm Altus Group. The 19-per-cent vacancy rate was a record high since 2003 when Altus started collecting data. It surpasses other tumultuous periods in the office market, including the oil price crash in 2014 when energy companies cut jobs and slashed their corporate offices.
…
Three years after governments required workers to stay at home to stop COVID-19 from spreading, employees have embraced remote work and are shunning workweeks of five days in the office. That is particularly the case for tech workers who generally have had more freedom to work from home.“Less people are coming in and less space is needed,” said Colin Scarlett, executive vice-president with commercial real estate firm Colliers in Vancouver. “Employees don’t believe they need to be in the office. As a result, the employer has been delicate on the return to the office.”
So am I pushing the panic button here? First of all, take a look at the most recent affirmation of BPO’s & BPY’s rating by DBRS:
The ratings continue to be supported by (1) the Partnership’s robust access to liquidity of $4.7 billion, consisting of $2.0 billion in cash and cash equivalents and $2.7 billion available on credit facilities at December 31, 2021; (2) financial flexibility afforded by nonrecourse mortgage debt and no unsecured maturities until July 2023 when the CAD 500 million Series 1 Senior Unsecured Notes come due; (3) DBRS Morningstar’s view of implicit support from BAM; (4) BPY’s market position as a preeminent global real estate company; and (5) high-quality assets, particularly its Core Office segment, with long-term leases in place and large, recognizable investment-grade-rated tenants. The ratings continue to be constrained by BPY’s weak financial risk assessment as reflected by both its highly leveraged balance sheet and low EBITDA interest coverage (1.28x at the last 12 months ended December 31, 2021); a riskier retail leasing profile in terms of lease maturities and counterparty risk relative to BPY’s Core Office segment; a higher-risk opportunistic Limited Partnership Investments segment composed primarily of hotel, office, retail, and alternative assets; and DBRS Morningstar’s assessment of the unmitigated structural subordination of the Senior Unsecured Debt at the BPP level relative to a material amount of debt at its operating subsidiaries.
DBRS Morningstar would consider a negative rating action should BPY’s operating environment fail to improve as expected such that total debt-to-EBITDA remains above 16.0x, on a sustained basis, all else equal, or if DBRS Morningstar changes its views on the level and strength of implicit support provided by BAM. On the other hand, DBRS Morningstar would consider a positive rating action should DBRS Morningstar’s outlook for BPY’s total debt-to-EBITDA improve to 13.0x or better.
Trouble is, that affirmation is just over a year old now, and much has changed in the interest rate world since then. On a better note, S&P performed an Annual Review For Brookfield Property Partners L.P. dated 2023-2-1 and took no action.
Meanwhile BPY’s balance sheet still looks reasonable, with limited partners supplying about 8.1-billion in equity; total equity, including preferred shares and non-controlling interests, is 41.7-billion supporting 112-billion in assets. The limited partners actually recorded a small loss in 2022, as the available net income was scooped up by the non-controlling interests, but in 2022 there were substantial net sales of assets, net payments of debt and an increase in cash.
So, I’m concerned but I’m not panicking. One of Brookfield’s great strengths is actually being shown off by the DTLA problem: a lot of the debt is secured by the properties with no recourse to the company and – as may be shown by the DTLA situation – they are not averse to cutting their losses on a given investment and sending jingle-mail to the mortgage holders.
Affected issues are BPO.PR.A, BPO.PR.C, BPO.PR.E, BPO.PR.G, BPO.PR.I, BPO.PR.N, BPO.PR.P, BPO.PR.R, BPO.PR.T, BPO.PR.W, BPO.PR.X and BPO.PR.Y.
Updatd, 2023-4-6: Those fortunate enough to have a copy of the August, 2022, PrefLetter on hand will have noted that as of 2022-7-29, CPD had a weight of about 3.8% in BPO preferreds. It’s actually more than that, since my analysis ignored the “Brookfield Property Preferred Pref”, BPYP.PR.A, with a portfolio weight of 1.50% (massive!), since it is a US-Pay issue and shouldn’t be in the TXPR index at all, according to me. As of 2023-4-5, this issue had a portfolio weight of 1.44%, so the total BPO weight in CPD is over 5% (before recent markdowns, anyway!). I consider this level of holding to be imprudent for an issuer of this credit quality, but then I consider the total level of Pfd-3 holdings in CPD to be imprudent. It’s not their fault, they’re reflecting the market, just like they’re supposed to do … but the market remains distorted by the issuance boom of ten-odd years ago, when a lot of companies that should not have been able to come to market … did.
The September, 2020, edition of PrefLetter reveals that ZPR held a weight of about 2.8% in BPO – also imprudently high, according to me, but better. ZPR does not hold BPYP.PR.A.
An Assiduous Reader writes in and says, in part:
but sometimes have to do a deeper dive into financials
– to have discovered that BPO had so much variable AND lumpy maturities within this dreaded “window” of high short rates (curve likely rightly assuming rates will settle back into 3s a year out) was a total shock
– how could they have been so stupid with all the warning signs of an imminent big move up in rates?
– especially when parent, BN, maintains a debt/cap of only 17% and its ALL termed out to 13 year average?
– why would BN have been so well prepared but left BPO in such a vulnerable spot20 years of brainwashing participants into believing the “sub 2” environment would persist in perpetuity really got the better of a lot of people!
Fair enough, but as I am very fond of pointing out, it takes two to make a market. I’m not sure if a substantially longer term would be possible for commercial mortgages, or just how a hedging programme might work, or how such hedging might be viewed by investors in BPY/BPO. It’s not my field.
Some digging has indicated that American commercial mortgages generally have a much shorter term than the 30-year standard for residential mortgages, with terms greater than ten years being relatively hard to find, but I have been unable to locate any solid data. If anybody can find such data, let me know!
Update #2, 2023-4-5: Oddly, the BPYP.PR.A US-Pay issue mentioned above has done considerably better than BPO.PR.N – to take an example – in the year-to-date:
It’s not clear that the DTLA holdings are even owned by BPO. I think they may belong to BPY the parent company. Also I notice that the BPY prefs that still trade publicly on the NYSE were little changed yesterday. Strange!
Great overview — thank you!
“why would BN have been so well prepared but left BPO in such a vulnerable spot”
Well, daughter companies are sometimes left vulnerable so that when surprises happen (which they often do) the parent company can bail them out at a big discount.
“Oddly, the BPYP.PR.A US-Pay issue mentioned above has done considerably better than BPO.PR.N – to take an example – in the year-to-date”
Pretty nice example, since PR.N and PR.R are in a neck and neck competition to be the cheapest 🙂
stusclues
not sure the daughter argument applies here. BN took the rascal private and are sole owners. they are largest losers (other than management having gorged on compensation)
james
i think the mess is combination of relying so heavily on variable and that 20bb+ is up for renewal in this “window”
countless participants have been funding short to invest long for so many years and that is a trade, nothing more. kills me how so many companies have turned into long bond traders instead of running an actual business.
there was absolutely no excuse not to have termed out borrowings against long live assets other than it had worked for past 20 yrs and they were all drunk on the coolaid.
the only argument i can see for so much variable is that a big chunk of the portfolio is designed for flipping. the long term core assets ought to have termed out else its just that bond trader argument that is so pervasive today
lastly on the it take 2 to make a market
let us not forget that cent banks were sole buyers in many auctions prior to liftoff
that bumbaclot phil lowe running the rba had maintained his peg on 3s at .1 even as aussie inflation hit high single digits. when he finally gave in the reaction to the aussie front end made our liftoff look like chicken scratch
guess must add BPOs woes also impacted by vacancy but they insist core office is still at 94%…
A general question:
Assuming BPO/BPY holdings take a hit of anywhere from 30 to 50%, perhaps more, what is left for the preferred holders?
Today, the Canadian BPO bonds of 3 to 5 year duration were quoting at about 7.5 to 8% yields.
And the tens of billions of equity wipe out from pretty much all their holdings is going to hit someone. Who? And in what order?
To what extent can they jingle mail their way out of this?
A couple of years ago, BAM had to bail out their canary wharf holdings.
https://brookfield.substack.com/p/canary-wharf-a-key-brookfield-office
skeptical,
i’m sure there would be many different opinions on this but i would say the simple answer is, with a debt to capitalization of 55% or so, they could withstand a 30% hit to overall portfolio but 50% would well and truly wipe out all equity incl prefs.
i tend to look at it almost like a bell curve. think of every asset, whose debt is non recourse to parent, individually as having a “net equity” position. one could plot a distribution curve. those properties with zero or negative equity get put to mortgage holder ala DTLA but there would be countless assets with positive equity.
we need the positive equity assets to be able to cover corp debt and prefs which at this time no doubt do but a lot can change
it is also for this reason that there is precious little chance of a default on BPO corp debt as there is much positive equity for now
worth mentioning that the valuations use approx a 6.8% dcf for office which imo is relatively conservative. they would not have been motivated to use a high valuation ahead of the privatization.
variable debt is costing them 7 at the operating level and 4ish on the fixed debt for blended average mid-high 5s. corp debt indeed back of that at approx 8 now as is subordinate to mortgages.
using goc5yr at 2.90 in perpetuity, those prefs interest equivalents are in 20s in some cases (n,p, r) but that is in part a testimony to how cheap certain rate resets are
Pretty nice example, since PR.N and PR.R are in a neck and neck competition to be the cheapest
Well, it looks like the total return plots cross on March 14 in the graph shown; since this was also the ex-date I calculated total returns for the BPO issues starting on that date and ending April 6. Edit: using bid prices
BPO.PR.A -24.21%
BPO.PR.C -26.41%
BPO.PR.E -25.18%
BPO.PR.G -24.60%
BPO.PR.I -25.70%
BPO.PR.N -22.22%
BPO.PR.P -22.90%
BPO.PR.R -24.02%
BPO.PR.T -24.50%
Seems to me that my choice of issue understates the extent of the puzzle I was discussing, if anything.
A couple of years ago, BAM had to bail out their canary wharf holdings.
A lot of good investments had to be bailed out in 2020. I have no idea whether or not Canary Wharf can be classed as a “good investment”. I’m certainly not going to learn anything from this Keith Dalrymple guy.
Edit: I will also point out that having a loan with no recourse is like holding a put option to hedge a long position. Sometimes you exercise it, sometimes you don’t – even when it’s in the money. It depends on the facts of the specific situation.
“PR.N and PR.R are in a neck and neck competition to be the cheapest”
Clarification: I was forward looking here using IVT.
Clarification: I was forward looking here using IVT.
No harm done, no bones broken. I was just concerned that some might think I had selected the worst performing BPO issue in order to make the observation more exciting.
n,p,r indeed cheapest would assume whether one uses ivt or a swapped model
their outperformance an indication of the dreaded “trading on price” syndrome
would be interesting to see if supported by the w,x,y complex. assume they outperformed even more since mar 14?
People don’t appreciate that Brookfield’s Core Office is where about 80% of their office equity resides. These are permanent holdings and are managed conservatively to survive anything. The rest of it has high leverage and is opportunistic. The DLTA buildings they defaulted on are in this second group. Very little equity is lost giving these buildings back to lenders. The real security for BPO prefs comes from the core.
Awesome review.
As I understand it (and their structure is complex, so correct me if this is wrong) the property group (Brookfield Property Partners) is a sub of BN and BPO is a sub of BPP. (BN refers to the property group collectively as “BPG” in its various filings, though the proper legal name is different.) The property group is a material component of the overall BN collection of assets.
BPO, which comprises the majority of the “Core Office” in BPP’s financial statements, likely accounts for about ~30% of BPP’s revenues. (“The majority of our Core Office portfolio is held through Brookfield Office Properties Inc. (“BPO”). We own 100% of its outstanding common shares and outstanding voting preferred shares as well as interests in certain series of its non-voting preferred shares.”)
BPP and related entities have provided a guarantee of the BPO preferred shares – so the entire property group is on the line for those shares. The guarantee is dated 14 July 2016; its filing date on Sedar by BPP is 2 August 2016.
So, BPO can’t easily be cut loose from the other parts of the property group (i.e., BPP and the other guarantor entities).
“BPP and related entities have provided a guarantee of the BPO preferred shares”
Right. That PR goes further to explain that future regulatory filings were reduced to a bare minimum for BPO based on the guarantee.
Despite clawing back some of the big price drop, the BPO prefs are still trading far too low.
” Right. That PR goes further to explain that future regulatory filings were reduced to a bare minimum for BPO based on the guarantee. ”
That bare minimum qualification is certainly correct. I once attempted to determine profitability of BPO portfolio by reviewing the regulatory filings. Might have been better off looking at black holes.
The BPO results are consolidated in BPP’s – at the end of the day, assuming the guarantee is solid, then overall profitability of the main sub is what’s relevant, is it not?
“at the end of the day, assuming the guarantee is solid, then overall profitability of the main sub is what’s relevant, is it not?”
This is my conclusion, yes. BPP ought to have the organizational flexibility to reorganize and shift assets around, as it might suit the overall aims of the organization.
From DBRS today:
May 15, 2023
DBRS Limited (DBRS Morningstar) confirmed Brookfield Property Partners L.P.’s (BPP) Issuer Rating and Senior Unsecured Debt rating at BBB (low). DBRS Morningstar also confirmed the ratings on Brookfield Property Finance ULC’s Senior Unsecured Notes and Brookfield Office Properties Inc.’s Senior Unsecured Notes at BBB (low) and Brookfield Office Properties Inc.’s Cumulative Redeemable Preferred Shares, Class AAA at Pfd-3 (low). All trends are Stable. The ratings are based on the credit risk profile of the consolidated entity, including BPP and its subsidiaries (collectively, BPY or the Partnership).
The confirmations and Stable trends consider strong operating results in BPY’s core retail and LP investments segments (i.e., hotels), headwinds facing the office sector, the current elevated interest rate environment and BPY’s variable rate debt exposure, and the recent reorganization of Brookfield Corporation (Brookfield) and other recent transactions whereby BPY acquired LP interests in several real estate funds and other investment interests for $3.1 billion through the issuance of junior preferred shares of Brookfield BPY Holdings Inc. and a non-interest-bearing note. The Stable trends also consider DBRS Morningstar’s resulting updated expectations for BPY’s financial risk metrics. DBRS Morningstar expects that in the near to medium term, BPY will operate with total debt-to-EBITDA and EBITDA interest coverage in the mid-15 times (x) range and 1.1x range, respectively.
The ratings continue to be supported by (1) BPY’s market position as a preeminent global real estate company; (2) high-quality assets, particularly BPY Core Office and Retail segment, with long-term leases to large, recognizable investment-grade-rated tenants; (3) superior diversification, in particular by property, tenant, and geography; and (4) DBRS Morningstar’s view of implicit support from Brookfield. The ratings continue to be constrained by BPY’s weak financial risk assessment as reflected by both its highly leveraged balance sheet (total debt-to-EBITDA of 17.0x for the last 12 months ended December 31, 2022 (LTM)) and low EBITDA interest coverage (1.29x LTM); a riskier retail leasing profile in terms of lease maturities and counterparty risk relative to BPY’s Core Office segment; a higher-risk opportunistic Limited Partnership Investments segment composed primarily of hotel, office, retail, and alternative assets; and DBRS Morningstar’s assessment of the unmitigated structural subordination of the Senior Unsecured Debt at the BPP level relative to a material amount of debt at its operating subsidiaries.
[…] As noted by Assiduous Reader stusClues DBRS has announced that it: […]
i know reviving this thread is akin to rubbing salt in the wound but i too have a flesh wound on this name albeit smaller position size when discovered all the variable debt earlier this year.
BPY consolidated numbers look so horrible that it is hard to envision there not be a reorg looming as precious little chance of material relief on the interest rate front in the near term.
that said, what has always been a bit of a mystery to me is what the equity capital stack actually looks like. ie just how much equity is subordinate to the prefs
for those intrigued, there is a sedar filing recently that appears to clarify it. the way i read it, the amendment suggests:
partners equity is junior to “redeemable/exchangeable” units which are in turn junior to preferred equity. it was the ranking of that “redeemable” stuff that i was unclear on wrt the prefs.
if that is the case, then there is 30bb-40bb or so of various types of equity junior to the prefs.
furthermore, the amendment reiterates that any reorg is based of the face value of the various instruments which would continue to favor the lowest priced prefs. odd that the “trading on price” phenomenon is not more pronounced at these levels.
the bad news, BN corp from what i can tell, as the owners of the partners equity AND the redeemable/exchangeable equity may be on the hook for 20bb equity here
stands to reason that other than SVB and other regional banks and developers that have already failed, that those who gorged on debt, particularly the variable kind, over the past 20+ years to the benefit of management compensation and equity valuations, will be made an example of.
lets just pray that the revaluation isn’t so profound as to lead to negative equity.
The BPO “preferreds” are basically common stock of assets that are largely and increasingly impaired, which the market is currently pricing in. The parent can guarantee their securities as much as they want but if the assets were marked down realistically, say 50% haircut in today (or near future in H4L environment and/or deep recession), the market is pretty much saying there is little to no recover as a BPO “preferred” shareholder. I wouldn’t put much stock/faith in BN mgt’s confidence and valuation of their “trophy” assets, when it’s pretty obvious and public that supposedly prized assets like their Canary Wharf are losing big tenants fast and need capital injection recently.
“I wouldn’t put much stock/faith in BN mgt’s confidence and valuation of their “trophy” assets, when it’s pretty obvious and public that supposedly prized assets like their Canary Wharf are losing big tenants fast and need capital injection recently.”
Do you believe Manhattan West should be written down by 50%?
FWIW
https://www.fitchratings.com/research/non-bank-financial-institutions/fitch-affirms-brookfield-corporation-at-a-outlook-stable-27-10-2023#:~:text=Fitch%20Ratings%20%2D%20New%20York%20%2D%2027,Term%20IDR%20at%20'F2‘.
“The BPO “preferreds” are basically common stock of assets that are largely and increasingly impaired, which the market is currently pricing in.”
Well, no. The are “basically” preferred shares of BPY and are pari passu with other preferred shares of BPY that trade on the NYSE.
Brookfield Corporation, through their complex structure and insistence on telling an integrated corporate level story, has lost the confidence of some investors. Across the subsidiaries, Level 3 estimates are being challenged (eg. BIP short report and comments here). Flatt has some work to do to convince investors to trust the organization to deliver and honour its commitments. November 9th, we will see.
I continue to think that relying only on a sole analysis of BPY misses the point of BN. BPY is challenged, to be sure. Their financials are concerning for a stand-alone entity, which they are not. BPY is the source of major fund flows to BN and BAM, and is integral to the numerous private funds run by BAM. Unwinding BPY from BN/BAM through an insolvency process would destroy the recent investor day story and wreck Brookfield’s ability to continue fund raising. IMO, losses at BPY are not large enough to drive Brookfield to let it fail.
stusclues,
no one is saying where goes BPY so goes BN. BN is indeed in a much sounder position but BPY has negative cash flow before distributions to equity holders up the feed chain and as a result is undoubtedly being carried at far to high a NAV (from which management fees are also taken). The carrying value of BN’s stake in BPY equity classes is a very material component of BN’s book value.
What you say may well be true about BN doing whatever it takes to keep it intact in its present form but that would most likely be seen as throwing good money after bad for sake of their franchise.
would also think that their sophisticated outside co-investors would be none too pleased to see the ongoing MER taken off an inflated NAV while distributions are nothing more than a return of capital.
If BPO prefs continue to quietly pay their dividends in full every quarter as I expect, at what point does the “BPY is going bankrupt” crowd fade away? It will be amusing to watch. In the meantime I have confidence that the 2/3rds of BPY equity that makes up the premium office and retail properties will continue to perform just as well as it does now—95%+ occupancy, modest debt, decade long leases, and NOI rising at 5% per year.
rod,
on a previous discussion we agreed that there would be a distribution of equity across individual properties, ie some with equity others without.
but without property by property disclosure, how can you be so confident that there is a stack of equity in the core portfolio?
on a consolidated basis, debt servicing and operating costs consume all the revenue. there is nothing left over, negative in fact
i am long prefs on belief that the hit to the equity will be profound but not so much as to permanently impair the prefs but i struggle to see how loading up on low cap rate assets after decades of TINA mentality and then using variable debt against it, is anything but a permanent impairment in this new environment.
that’s without even contemplating the structural issues in office vacancy that will affect all properties, trophy or not, over time
There is property by property disclosure by name of the premium core assets, which as I said is 2/3rds of the equity. You can see asset value, debt, occupancy, etc.
rod,
my mistake. can you direct me to the filing that outlines each properties operating metrics or is it simply a table of what they say it is worth relative to the debt levels?
been an awful lot of lagging cap rates in supporting higher valuations. i’m more interested in the actual operating metrics
It’s in BNs supplemental reporting.
ok, thanks.
not familiar with the regulatory filing called “supplemental reporting”
https://bn.brookfield.com/
under Reports & Filings you’ll see “Supplemental Information”
I see nothing but baseless opinions and fear when it comes to Brookfield’s office properties and specifically the BPO preferred shares. Has anyone watched the Sep 12, 2023 Investor day video for Brookfield Corp ? They go into much detail about their real estate, including office. These properties are 90+% fully leased and have 9 years average tenancy left. The big portion of refinancing is not until 2027 (50%). Bruce Flatt repeats the word “fixed” at one point in the video – he is talking about Brookfield getting fixed financing as much as possible in 2021 when rates were near zero. The BPO preferred equity is around 2.7B (peanuts for Brookfield) – these properties would have to be sold at 50% of their Jun 30, 2023 values for this equity to be wiped out (see the Aug/2023 Sedar filing for Brookfield Property Partners). I don’t see any of these properties being sold anytime soon.
Mainly old/crap commercial office buildings are the ones at risk and generating all the negativity in the space. These are buildings which the owners milked equity from in 2021 and now the lenders/banks (not the owners) are facing big losses if they are sold.
Brookfield Corp is thanking all the retail investors for dumping their BPO & BN preferred shares. The buyback program is still in place. Too bad they can’t buy more than 1-2K pref shares per day of each series. Wait for Brookfield to announce their decision on BPO.PR.T which is due for reset/redemption Dec 31, 2023. This should be announced by the end of Nov/2023. I think they will let it reset in the 7% range even though the current yield is higher. I say that because they can buy shares back cheaper and not resort to redemption at $25 (redemption would likely cause the other BPO series with min resets to skyrocket).
Unless you have inside information that Brookfield is a crooked operator and will soon blow up the entire corp and subsidiaries (ie. somehow letting BPO and BPY go bankrupt), I suggest you wait patiently and enjoy your quarterly dividends.
rod,
thanks, that is super useful, largely for my BN holdings!
would suspect worst that would happen is suspension of all distributions to both equity and prefs for period of time until got interest rate relief or rents rising over time. latter might be a challenge if occupancy issues maintain.
beauty of the prefs, is that should that be case, they will have reset at high level and cumulatively accrue at a even more furious pace.
think that amended that got filed the other day talked about distributions being taken in kind so if so, thats less strain on cash at least
asset sales could make up shortfalls but having a tough time believing they could realize anywhere close to what they carry at given on a consolidated basis the portfolio is near breakeven
vic,
BN’s debt is termed out
BPY’s was not
even commenting on BPO.pr.T getting redeemed is absurd
think you need to check SEDI again
I would argue many of their properties including what they claim as their ‘trophy’ and tier 1 assets are really worth ~50% if not now then eventually as H4L takes its toll. Again, I mentioned Canary Wharf and all the troubles associated that anyone can search for… not quite the ‘trophy’ that Flatt & co keep making it out to be.
The idea that BPY’s tier 1 assets have fallen in value by 50% because of 4% bond yields is comical. Do you really believe assets with NOI increasing at 5% per year need a 10% cap rate? A 15% unlevered return?
down 50% is indeed extreme for core but rather than talk in extremes we need to be realistic in that:
– cap rates applied are below current funding costs (US & UK rates are well back of Cad)
– there is no cash flow after debt servicing on consolidated basis
the one note that stuck out to me in that supplement was the 7.7bb of corp debt at the BPG level that they conveniently “applied” to the transitional properties as aren’t intended as long term holds. to stack that much corp debt on top of properties that were likely mortgaged to the hilt is concerning.
You can have cap rates below funding cost if NOI is growing. A building is not a bond.
negative carry real estate is so 2010s.
Cap rates incorporate growth in cash flow. Saying cap rates can’t be lower than funding rates is like saying a stock can’t rationally trade at a P/E above 15 if the company borrows at 7%. Obviously, a P/E depends also on the growth rate of the earnings. The same is true of buildings. The same inflation that has caused interest rates to rise is pushing up rents, so NOI is rising fast. You can’t say bond yields have gone up 3% therefore cap rates must go up 3%. That is a complete misunderstand of how cap rates work.
my point exactly.
the entire world of real estate has been tolerating low cap rates in anticipation of capital gains to be had as cap rates fell further. residential rents hadnt really been doing a whole lot previously. its a condition from perpetually falling interest rates.
admittedly on residential side at least now have rising rents but would be cautious about building rising rents into a office/mall model
What is a “low” cap rate? Depends on many factors. I don’t think a 5% cap rate is low with NOI growing at 5% per year. And as long as inflation is elevated I see no reason why property that is in demand can’t pass on inflation. BPY’s core real estate is clearly in demand. And that is 2/3rds of the equity of the whole.
5 sounds appalling in that scenario which would ensure rates to stay elevated. rate resets will be a dozen for BN and a few dozen for BPO.
all leads back to where are the pref buybacks!
“…rate resets will be a dozen for BN and a few dozen for BPO.”
I don’t intend to go down the rabbit holes which DR seems to enjoy digging, but credibility is challenged when I read stuff like the above.
BN has a dozen resets, but BPO/BPY only has 5 resets and 4 minimum resets and 3 floaters.
talking about the dividend yield as sure most everyone else would have figured
more accurately BPO will be “two and a half dozen” give or take
I’ll start with this: BPO prefs current yields are very high (17%+/- for eg.) but cost to company is still only 6.50%+/- on the various issues. These are attractive funding levels in this rate environment. I do wonder why there isn’t more info about any plans for buybacks but I suspect it’s a CF issue and cost of any new issuance. BTW, all prefs have been hurt this year due to outflows in managed funds and high rate alternatives (as well as a tax issue for some corps). As to debt, the concerns in the market are wrt to variable rate debt and refinancing risks. The co. has hedged some degree of the rate risk with caps and swaps. The FEDs have not raised rates recently so stability has improved. Lenders are motivated to extend loans but credit spreads MB higher. Vornado and SPG just reported with results that are OK. LT rates are higher so DCF valuations will be lower. This hurts for sales of properties but can be opportunistic for buyers. I suspect the 3rd Q to be viewed OK by market participants and rating agencies so dividends will be paid and life will go on until 2024 when all s/b better (or Not!).
“…BPO will be “two and a half dozen” give or take”
DR, where do you get those numbers from? Mine are from the BPO/BPY corporate sites. Are you suggesting they’re going to issue another 18 or so issues?
serenity now, serenity now
One example of BPOs attractive funding costs: Series P Shares
If declared, the fixed quarterly dividends on the Series P Shares for the five years commencing April 1, 2022 and ending March 31, 2027 will be paid at an annual rate of 4.536% ($0.2835 per share per quarter).
Whether this update belongs here or deserves its own post, but DBRS on November 22 has upgraded Brookfield (BN) from “A low” to “A”, and its prefs from P2- to P2.
It reflects more of a “methodological” change, following a review of the credit ratings of the Company announced on July 5, 2023 where DBRS identified an error in the application of methodologies used to determine the credit ratings of BN.
The latest report goes into quite some detail, including comments on BPY, but I leave it up to James to decide if he wants to “cut and paste” further.
Basically DBRS looked at
“….each BN business that contributes a material portion of the Company’s consolidated distributable earnings or already had a DBRS Morningstar public credit rating …(and then) assessed its credit quality based on its proportionate contribution, adjusted for BN’s ownership interest in the subsidiary (the Composite Rating). DBRS Morningstar then adjusted the Composite Rating for the following overlay factors: (1) the structural subordination on the leveraged cash flows from BNRE, BPY, and BEP, (2) the Company’s superior industry diversification, and (3) BN’s very strong liquidity. The result is an overall Issuer Rating of “A.”
BPY is rated “BPY, rated BBB (low) with a Stable trend” in this report. The BPO FRs are ranked pari passu with them (confirmed with BPY investor relations and per the guarantee on privatization). Therefore, the BPO FRs are effectively BBB (low) with a stable trend too. Not sure why DBRS doesn’t say so.
i dipped my toe into BPO preferred shares yesterday … small position. doesn’t need to be big. but the risk reward imo is very favorable.
[…] Thanks to Assiduous Reader peet for bringing this to my attention! […]
I sold all my BPO prefs a while ago and moved the proceeds into BN.PF.L, which is a bit of an oddball pref following the BN -> BAM spinout transaction. BN.PF.L has a par value of $22 but has been trading around $10 recently. For the next 3 years it yields ~6%, which is nothing special. What’s really attractive is then exchanging it for BN.PF.K. BN.PF.K pays 100% Prime based on par value of $22.44, and has been trading around $15 lately. I don’t think the pair warrants that large a gap. BCE.PR.S/BCE.PR.T is a similar strong pair resetting at the same time and the gap is much tighter. Anyway, I suspect many are ignoring BN.PF.L on account of the low current yield and its oddball par value, while BN.PF.K is getting far more love because it is a floater that pays dividends monthly.
So you get ~15%/yr if you buy BN.PF.L today and convert to BN.PF.K in three years, plus 6% dividend. That gives a total return of 21%. This seems like a serious mispricing.
cwrea, after your comment last Friday and some research, I bought 500 shares of BN.PF.L on Monday for $10.20. This ticker is very illiquid with an average of only 600 shares per day!
I was not aware of BN.PF.L as it was not listed on canadianpreferredshares.ca…
So you get ~15%/yr if you buy BN.PF.L today and convert to BN.PF.K in three years, plus 6% dividend. That gives a total return of 21%. This seems like a serious mispricing.
You don’t know what the price of BN.PF.K will be in three years, which is a problem. And as with all FixedFloaters, the minimum rate on the five year reset on BN.PF.L can actually be below the five-year Canada rate, which I have always assumed means that conversion to the ratchet rate issues (which may currently be assumed to pay 100% of prime) will be forced.
I suggest the best way to compare the two issues is with the theory of Strong Pairs, which has been discussed interminably on PrefBlog; the calculator now indicates a breakeven point of 8.23% until the next Exchange Date 2026-11-1; that is, if Prime averages more than 8.23% between now and then, BN.PF.K (RatchetRate) will have done better; if less, then BN.PF.L will have been preferable.
BN.PF.L seems like a pretty clear bet between the two given current market conditions, but the main question is whether you ultimately want to own a RatchRate preferred paying (for now) 100% of Prime on its $22 par value.
I’m not saying it’s a bad bet; I’m just nervous about the claim of a 21% total return without any qualifications; the embedded assumption there is that BN.PF.L will rise in price to meet BN.PF.K … what if BN.PR.K falls?
BN.PR.B, paying 70% of Prime on $25.00 par value, is now bid at 11.31, for what that’s worth.
sacdechips, the BN.PF.L and BN.PF.K issues arose from the much older prefs BAM.PR.G and BAM.PR.E, respectively. Last year, 12% of each issue’s par value was exchanged at full value for shares in the new Brookfield Asset Management. (I almost wrote “redeemed”, except it wasn’t for cash.) Both presented an opportunity to acquire significantly discounted “new BAM” shares. Last fall, I got into the “G” at 42% off par and the “E” at 28.5% off par. I exited my positions shortly following the spin-out. But, since then I’ve been watching the two resulting issues closely; at first, more out of curiosity about how the market would treat the oddball par values. I maintain my own Excel spreadsheet to track the Canadian prefs market (all of it) and I had these since day one as they were just the old issues with new tickers and par values. Then this October, when ZPR was making new lows, I noticed the gap between “L” and “K” had widened more. I did some math and lot of research and then got back into the “L”.
jiHymas makes an excellent point! I mentioned the valuation gap and its widening being what prompted me to dig deeper*, but it isn’t the capital gain that I’m after. I intend to exchange my “L” to “K” in 3 years and then hold for the income. The prices should converge, one way or the other, but for me the “L” is a way to acquire today what in 3 years time will be an effective yield of 200%+ of Prime based on today’s cost for the “L”. *Part of my digging unearthed an excellent article from Mr. Hymas: “Preferred Pairs” from the October 2007 issue of Canadian MoneySaver, and it mentions the BAM.PR.E / BAM.PR.G pair. When that article was written, these ratchet rate issue prices hovered around par and even over par, and so the proportion of Canadian Prime to be paid couldn’t be assumed 100%. We’ve been in discount territory for almost a decade, I think.
Another aspect I find attractive about this is Prime itself. The Prime rate is more stable than the Canada 3-Month T-Bill benchmark rate used by today’s more common floaters. And since 2015, the big banks have kept Prime at 220bps above the BoC overnight rate. Unless you believe zero/negative interest rates are possible in Canada, a BoC overnight rate minimum of 0.25% implies a floor on Prime of 2.45%. That was Prime’s level for about two years starting March 2020. A floor on Prime of 2.45% implies an effective minimum yield on BN.PF.K shares acquired via BN.PF.L exchange later, based on $10.32 per “L” today, of (22.44 x 0.0245) / 10.32 = ~5.33%.
If you look at the entire Canadian preferred share market at yesterday’s close and filter out (a) all perpetual rate prefs, and (b) all non-investment-grade prefs, then the only other issues that exceed a yield of 5.33% assuming prevailing rates at 0.25% and Prime at 2.45% are a handful of BN and BIP fixed resets, and all but one are minimum-rate resets. It only takes prevailing rates at 1.00% and Prime at 3.20% for the effective yield of “K” acquired via “L” today to beat everything investment grade that’s not a perpetual. Even if you add back in the perpetuals, at 3.20% Prime only MIC.PR.A has a meaningful yield advantage, and even that disappears at 3.70% Prime. Prime today is 7.20%, so there’s 350bps room for BoC rate cutes before MIC.PR.A would have been the better bet. (I also hold some MIC.PR.A.)
Admittedly, my analysis is a little oversimplified because I didn’t factor in the opportunity cost of tying up money at 6% in BN.PF.L for 3 years when there are better BN yields out there right now, but I’ll suffer the 6% instead of trying to time when the gap is likely to close.
p.s. My analysis in the last paragraphs above was with respect to future reset yields, not current yields. In hindsight, that wasn’t clear and I should have mentioned that.
I would love to hear Bruce Flatt respond to the dismal market pricing of the BPO preferred shares and the impact they are having on BN’s share price. Perhaps he would never entertain such a question. BN knows that its real estate (especially anything with an office tag) is essentially valued at zero when trying to currently value BN’s shares. So the question is, are they going to do anything about it other than wait until sentiment changes ? Their board of directors may be at risk if activist investors gang up on the management. All BPO preferred shares could be delisted for about $2.5B in redemptions. They could even make an offer at much less than $25 par. But would removing BPO preferred shares from the market help BN’s share price ? Not sure.
p.p.s. I erroneously used BN.PF.K’s redemption value of $22.44 in the effective yield calculation above. Where I had (22.44 x 0.0245) / 10.32 = ~5.33%, that should have been (22.00 x 0.0245) / 10.32 = ~5.22%. The $22.44 value is used only for determining the adjustment factor for the ratchet rate, and for redemptions, but dividends are calculated with respect to $22.00. (I need to update my spreadsheet to allow for two such distinct values, not only one “par” for all purposes.) Even after correcting my 2% overstatement of the dividends, results from my analysis are similar to before.
Hello to cwrea. Thanks for the interesting analysis.
You mentioned that you track all the prefs in an Excel spreadsheet. I also have an Excel spreadsheet to analyze some of the prefs. Have you found a way to import the current prices into your spreadsheet or do you update the prices manually (as I have been doing)?
there is a plug-in program called XLQ (https://qmatix.com/)
you can look into that
Brian, you’re welcome. I get updated stock prices using Excel’s own “Stocks” data type. There’s no plug-in to install; this functionality is built right into Excel. However, you need a Microsoft 365 subscription to retrieve stock quotes. The cost for Microsoft 365 is CAD 79.99/year. For me it is worth it.
So, provided you have Microsoft 365, here’s how it works: (1) enter a ticker in a cell, e.g. “XTSE:BN.PF.L” in cell A1, then (2) highlight the cell, then (3) on the Data tab, click the Stocks data type to convert the cell to the Stocks data type, then (4) in another cell you can now reference that cell’s “Price” variable (among others), e.g. “=A1.Price” for the last price.
Data is delayed, and there are no bid/ask values. All the other data I need for analyzing a pref issue (current dividend rate, reset spread, reset date, credit rating, etc.) I had entered manually in the past. Whenever an issue resets, gets redeemed, a new issue added, etc. then I make updates by hand.
When I load my prefs master spreadsheet, I use the Data tab’s “Refresh All” button to bring in the latest prices. It takes less than a few seconds to update all ~340 issues. I keep current prices using the method above in one column, and I have another column that keeps a copy of past price values for comparison purposes; e.g. so I could calculate % change in price vs. when I last used the spreadsheet, to see what’s moved up/down recently. Before I save the sheet for next time, I copy the entire column of current prices from one colum and “paste as values” into the other column.
Prior to any trade, I’ll enter actual bid/ask prices from my broker’s web site for the subset of issues under consideration to double-check my analysis. Wide spreads can certainly throw things off if you’re not careful.
I get updated stock prices using Excel’s own “Stocks” data type.
Thank you, this is excellent! I am contemplating another update to my Retirement Withdrawals Calculator and had just about resigned myself to using a Gaussian Distribution for returns, rather than using actual stock histories … but now I will be able to include a button that will obtain the information I once received from Yahoo, via the stockhistory() function.
I must say I’m a little suspicious of the [Volume.Average] property reported for BN.PF.L, though!
Thanks for the info on importing stock prices to Excel.
I also did some of my own research on this topic and found…
For people like me using an old version of Excel (I have Office 2013) you can download a “power query” add-on (free from Microsoft) and then use this to get free stock data but it is very clunky and awkward to use.
There is a new web-based version of Excel which anyone with a Microsoft account can use for free and it has a stock data import feature; it is easier to use than the ‘power query’ feature but is still cumbersome since the files are in the cloud and not on your hard drive.
I think I’ll probably cough up the $80/yr for Microsoft 365 – this looks to be the easiest to use AND enables you to keep your files on your local hard drive.
for users of TD advanced dashboard, if you have built a quote list of all the prefs you track, can “export to .csv” and copy/paste into your spreadsheet (open office for me)
jiHymas, brian: I’m glad the mention of Excel’s stock quote feature was helpful. Over the past few years I’ve learned so much from this blog (thank you, jiHymas) and from assiduous commenters, as well.
Here are a few additional ticker symbols for Excel’s stock quote feature that may help with a prefs spreadsheet: CA5Y, US5Y, CA3M. When converted to the “Stocks” data type, you can fetch e.g. “A1.[Yield yesterday]” for the corresponding government bond yields. I have other cells where I can enter yield values to override those ones for “what-if” scenarios, or simply key in more up-to-date quotes e.g. from MarketWatch TMBMKCA-05Y and TMUBMUSD05Y, and Investing.com “Canada 3-Month Bond Yield”. Excel can also provide a price for USDCAD when you need the exchange rate.
CA5Y and CA3M are clearly the most useful for analyzing much of the Canadian prefs market, but I also pull in US5Y to be able to compare the few USD fixed reset issues (ENB.PF.U, ENB.PF.V, ENB.PR.V) to CAD fixed resets. USDCAD is helpful to assess the profitability of positions held in USD issues, because one’s cost basis uses a past rate. Then there are the couple of TSX-listed USD perpetuals, BPS.PR.U and BPYP.PR.A. And with that I have brought my series of comments on this post back to the original subject, Brookfield Properties. 🙂