Brookfield Infrastructure Partners to Sell Preferred Issue

Canadian company Brookfield Infrastructure Partners (BIP) has announced a new issue of $25 preferred stock units (called units not stock if issued by a partnership).

This is a quality issue, but will come with a K-1 at tax time since it is a partnership.

BIP owns power generation, transportation assets, cell towers and other critical assets.

Yield talk is in the 5.25% area.

The preliminary prospectus can be read here.

EarlyBird was right on this one. Potter followed up with a likely BBB- rating.

15 thoughts on “Brookfield Infrastructure Partners to Sell Preferred Issue”

  1. Hey all I’m confused — if bought in a regular IRA, will there be tax withholdings from these dividends? Thanks in advance.

  2. I added the OTC ticker with EarlyBird in the reader initiated alerts page but here it is again:

    Brookfield Infrastructure Partners LP Preferred Units Ltd Partnership Cl A Ser 13 (Bermuda)

    1. tim, aview and all who might have been interested, would have been nice if this was issued on the new Bip-c version, my broker even restricts my adding to an existing position of the partnership in my roth because of K-1’s, they won’t acknowledge brookfields handling of UBIT issue, a preferred of the c corp would be a none tax with holding, qualified dividend held in a roth, correct?

      1. Mike – RE: BIP

        If you would tell, what broker won’t allow you to add to an existing position?

        If this issue were held in a Roth, and the taxes were handled properly, you would get the full dividend (distribution) without any withholding. If held in a taxable account, you would have withholding because it is a Bermudian enterprise.

        1. Bob-in- DE “I will tell” gives me an opportunity to get it off my chest. Have held BIP since ’09 or ’10 took my cost out in ’13 or ’14 been letting the houses money on the table. tried to place an order on a pull back and “Edward Jones”
          said it wasn’t approved for purchase, never got a good answer but it revolves around a “client” not understanding the UBIT issue they also have a “ban” on CEF’s with leverage, Also screwy thinking on other topics. Got a fine young man as my broker but the firm is a “cult” for the uneducated, want to control everything you do and collect fees. I don’t participate.

          1. Interesting Mike. Every brokerage has its quirks but I at least hope they get factual matters right. BIP isn’t a CEF and almost all CEFs are leveraged.

            The problem brokerages have with UBTI in a Roth is that THEY (not you) are responsible for filing the tax form. From an investor perspective I agree that you don’t want UBTI in a qualified account. Why pay tax in a otherwise non-taxable account? You can almost always find out in advance if a company expects UBTI. Some midstream issues are 100% UBTI.

            1. Bob: thanks for your comments about the brokerage having to deal with reporting, didn’t know, even though UBIT below $1000 is irrelevant according to my understanding. Jones having to do anything for a client would be a burden that they would want to avoid. I sold all my kinder morgan “partners” in 2014 with a big gain to avoid the very issue in question. thanks again Mike

            1. “hey” Q
              you bet they charge? Commissions plus transaction fee, or you can give them about 1.25% of your total value annual and get unlimited trades but that’s not on line and half the time your broker is with appointments selling annuities, and can’t be reached. They say they promote “buy and hold” but it should be “sell occasionally and forget”.

    2. aview – the ticker symbol is correct but I would be leery of buying it as an OTC ticker. Normally, when a temp OTC ticker is issued it flips over to the permanent ticker automatically. This one might not, because of the “F” at the end of the temp ticker. When the permanent ticker does issue it’s going to be on the NYSE as BIP.PRA.

        1. They should be but then many things that should be don’t happen. I can give readers a list as long as my arm, especially where OTC and “foreign” issues collide.

          I tried to give the folks a heads up. Glad to hear you didn’t need it personally but others may appreciate it.

            1. Bip has been around for a while . Brookfield has not shown itself to be shareholder friendly as a general rule so suggest that you review the paperwork closely. While the firm has a good reputation, it has generally worked better for the management than for unit holders. Just my view.

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