Brookfield Finance I (UK) PLC, a Brookfield Asset Management (BAM) company has sold a new issue of $25 subordinated notes. These notes are fully and unconditionally guaranteed, on a subordinated basis, by giant asset manager Brookfield Asset Management Inc.
These notes will be listed on the NYSE and will pay quarterly interest payments.
NOTE–this is not a typical baby bond–in fact from my review of the prospectus it is more akin to a cumulative perpetual preferred than a bond. There is no maturity date, but the optional redemption begins in 2025
I believe the interest payments will be treated as dividends–and likely qualified for income tax purposes, but this is not a certainty.
The company may defer interest payments without being in default.
If you are interested please read the pricing term sheet and the preliminary prospectus, but which are lengthy documents. Some of the folks have been discussing this issue on the Reader Alert Page so one might look there for additional details.
The pricing term sheet is here.
The preliminary prospectus can be found here.
As noted elsewhere this is now trading on the NYSE as BAMI. It had been trading on the bond exchange from the outset.
Price was amazingly stable, neither surging nor swooning during the day. Reminded me of the days when underwriters would keep a new issue stable in price for some time after an IPO.
I bought 500. Still not 100% sure of the tax treatment but will find out when it pays first distribution in February.
I called Schwab’s bond desk to ask about pricing before it was assigned a symbol and the rep. I spoke with read me Schwab’s notes about the issue. The notes mentioned that the issue is expected to be QDI.
Marketwatch now reports BAM5080932 assigned to this issue?
The symbol was assigned a week ago. You still can’t trade with it.
Call the bond desk and give them the CUSIP.
11272B103
Thanks. I’ve been searching MarketWatch for ‘Brookfield Finance’ for a week, only came up with BAMH. This one popped up just last night. Where were you seeing this before?
http://finra-markets.morningstar.com/BondCenter/BondDetail.jsp?ticker=C947301&symbol=BAM5080932
Anyone know whether a symbol has been published for the recently-announced Brookfield Finance I (UK) notes?
And in the teach-a-man-to-fish category: is there a service/site/feed to monitor for this info?
Not seen one. Should be soon, as in next week.
NYSE does have an online list of new issues but I don’t know if they alert.
I am seeing a symbol
Do you mean an OTC symbol? What is it?
What’s the symbol?
Does the British Government still sell “consols”? which are debt instruments of perpetual maturity.
The price fluctuation in these babies is going to be something to watch.
I would think the price behavior would mirror that of a perpetual preferred with a call. Always a risk buying a fixed rate perp. To take the other side of the bet go with 5-year resets. Lots available, more so if you go through IBKR.
BTW, the U.S. issued consols as well.
Are these notes getting the standard notching for sub debt (one notch below sr. unsecured) or is it like for preferreds (two notches below)? The no maturity date and ability to defer dividends (indefinitely?) makes it like a hybrid. Are there any covenants protecting holders in the case of a 1+ year deferral such as getting two BOD seats? That’s a feature that’s common with prefs but not sub-debt as sub-debt can’t typically be deferred indefinitely. If it can be deferred it’s the lesser of 5 years or the maturity date.
BBB stable, same as the preferred. Senior is A-.
That’s a pretty good yield for a BBB qualified preferred when insurers are issuing non-qualified BB rated sub debt.
Tim – my read, perhaps correct, is that it will pay qualified dividends, with no withholding. I believe that’s what the odd structure was designed to do. US$. NYSE.
God only knows if the brokerages will get it right.
Notes are guaranteed by BAM so it’s the same credit.
Yes Bob-in-DE—I was following you on the Reader Alert page–I held back posting until the pricing term sheet came in. You and I are reading things the same.