Canadian company Brookfield BRP Holdings (BEP) has priced their new perpetual notes.
The notes price with a coupon of 4.875%. The notes are low investment grade quality.
The issue has no maturity date, but the company has a 2026 optional redemption available.
The notes will not trade OTC and the permanent ticker has not been announced, but expect trading in 7-10 days.
The pricing term sheet can be found here.
7 thoughts on “Brookfield BRP Holdings Prices Notes”
it is now trading.
Ticker is BEPI and it pays qualified dividends, as mentioned in the other thread. On an unrelated note, the Sandbox page is taking forever to go to the new comments because of the size of the page. Is it due for a reset in the near future?
The payment is adjusted by the exchange rate, currently 77 cents on the dollar when paid out. (The quarterly payment (@ 5.08%) is $0.3175 Canadian and will be $0.2445 in US dollars).
The security (BRENF) is priced in the loonie on it’s home exchange (TMX) and the $27.05 in Canadian dollars equates to $20.83 in US dollars.
The NAFTA treaty allows for no tax leakage if you own BRENF in an IRA account but, 15% is withheld if it’s in an after tax account. I view the tax withheld as a prepayment of my taxes.
Thanks Greg. I tried placing an order on US broker, vol =0, bid =0, ask = 0, price at $US 21.01; there is a $50 foreign transaction fee, and states that if the order is filled over many days there are associated fees with each partial fill. Doesn’t look feasible.
I’d look to another broker, that foreign transaction fee is nuts and I have not had to pay for partial fills in over a decade.
FWIW, I have been with TD Ameritrade for decades and like them better than Fidelity.
If one is interested in BEP notes, it’s worth looking at their preferred – BEP.PR.G in Canada and BRENF in the US.
It’s a perpetual that’s priced and pays in the loonie. The security adjusts every five years and has a floor of 5.5% on a liquidation value of $25 Canadian. It’s currently priced at $27.05 with a yield of 5.08%
Thanks for that Greg. How does it work with US brokers if BEP pays in the loonie? And being a preferred, the fact that it’s paid with the loonie doesn’t then trigger the CA gov’t to take the 15% that they take with dividends on CA equities? And it looks like it’s been at $21.01 (USD) for weeks –
Per the NAFTA treaty, the withholding happens with after tax accounts but not with IRA’s. If you have the withholding from Canadian (or Mexican) dividends, you can use an IRS form (1108 I believe) to claim a tax credit — and it’s like a prepayment of your taxes for the year.
When the dividend is paid, the brokerage uses the current US/CAD exchange rate and pays you in US dollars.