Brookfield Property Partners LP Announces New Preferred Units

Giant Bermuda based partnership Brookfield Property Partners (BPY) has announced a new offering of cumulative, redeemable, perpetual preferred units (preferreds offered by partnerships are called units).

BPY is a giant partnership with over $88 billion in assets.

BPY has 2 other preferred units outstanding which can be seen here–both trade relatively strongly. They have coupons of 6.375% and 6.50% respectively. Neither are redeemable until 2024.

This issue will carry a K-1 with it at tax time.

This issue will be rated BB+ by Standard and Poors–1 notch below investment grade.

The preliminary prospectus can be seen here.

NOTE–watch the brokers for added charges on a purchase. They may classify as foreign and attempt to charge an extra $50.

Thanks to mcg and EarlyBird for being on this early. EarlyBird has yield talk in the 6% area. Most issues lately are coming in a little below the yield talk.

If this coupon does hit the 6% mark I may be buying some of this–assuming it doesn’t come out of the gate ‘hot’.

27 thoughts on “Brookfield Property Partners LP Announces New Preferred Units”

  1. Re: Taubman….SPG’s corporate rating is A and their preferreds are rated BBB+ so I can’t see any way they won’t redeem Taubman’s two outstanding prefs.

    1. I would expect this to trade tomorrow. Schwab shows 36,600 shares traded today but price shows up at $0.00

    2. For some reason BPY’s preferreds never seem to attract enough volume for my taste. The new one may not be any better than its brethren.

    3. SteveA–with early yield talk of 6% you are right that this is disappointing–I though I might like a taste–will see how it trades.

      1. On this, I would rather take the common BPY for less than a small taste (a nibble). Its target price by many brokers is about 20% higher ($22 a share), near a 52 week low, pays 7.3%, and the ex-dividend date is the end of Feb.

        Flip after ex-dividend unless the price starts to move up.

        Normally I start with a 25% position. My spare cash is even less than that if I leave money market funds alone. So, a true nibble.

  2. Excuse me for a little bit OT question. I just moved my account to TD Ameritrade. Does TD Ameritrade charges a fee for OTC ? I was charged a Transaction Fee and when I called, I was informed that since OTC is not a US exchange, a $6.95 fee is charged on each transaction.

    1. TDA charges me $4.95 for OTC trades. Not sure if this is their standard price. I had a great rate for all trades before they went to $0 commissions because I used to trade a lot.

  3. Why not own the mother ship?

    I have commented here in the past, along with others, about Lny Alden over at Shrinking Alpha. She’s one of the few honest, capable people over there. I especially follow her for her macro stuff.

    I ran into this today. Obviously, I’m directing readers’ attention to her #1 pick. And to #2 for that matter.

    I own Brookfield preferred to pay my living expenses now. I own Brookfield common to pay my living expenses 20 years from now. Or for the grandchildren, depending on how things work out.

    1. Bob; Since you have owned “BAM” for over 20 years now how did BAM do back in 2007, 2008, and 2009 as the market really nose dived in a very serious manner??? I don’t own it but truly am thinking seriously about buying some for my daughter and myself.

      1. Chuck – just to clarify I haven’t owned BAM for 20 years. That’s forward looking.

        BAM was crushed like everything except T-Bills in 2008-9. But made it back and quite a bit more. I thinks it’s an outstanding long term hold with emphasis on long term. Your time horizon for buying equities should be at least 10 years and perhaps 20.

        As I said, the preferred is for me and the common for grandchildren.

      1. Tim, Alpha8 and Bob-in-DE.

        This woman is a true find. Excellent articles. I will likely try some of her premium services.

  4. With SPG buying Taubman today could BPY be looking to raise money for an acquisition? Macerich or Tanger

      1. They are trading down today as series J and K are both out of call. My guess is the likelihood of SPG calling them at some point has greatly increased.

  5. I see in the prospectus that each US shareholder needs to provide a W-9 showing their TIN / Social Security number. This implies some type of withholding tax on the distributions. Can anyone clarify how that works for Brookfield ? Thanks

  6. So in looking thru many of the Brookfield issues I ran across something very strange. I ran across the symbol of “BKFPF” which is “Brookfield Asset Management” which I believe is the Mother Ship of all these little underlings. But according to that issue came out at $25. I looked it up in two different places, the nasdaq and also my Schwab account and it is now trading at $12.12. So I don’t know what happened to it over the years but it just seems strange. The coupon is a 6.25%.

    1. Mothership? I’m pretty sure that is BAM-E in canada, you’ll need to look up the currently applicable terms to get its current coupon.

    2. I would be interested in this issue but am trying to navigate the Canadian challenges. For example- Does holding this issue require me to file any Canadian paperwork / taxes?

    3. The mothership has to fly its underlings back n forth from the transmission satellights with an overall round trip from Canada to the US. The cost is so expensive for the trades, and that is why the discount.

      That is my explanation… or you can read more about Canadian preferreds, and starting with Quantum Online that tells you a little about it. I thought as well the world traded in US dollars, but Bob and Grid here showed me otherwise.

    4. BKFPF is a preferred share. The coupon is 3.45%. 6.25% would be the yield at present price.

      If you want to own the mother ship it’s BAM, traded on the NYSE.

  7. 6% is a pretty decent yield for BB+. Probably 50 bps higher than a BB+ REIT preferred would yield. I guess that’s due to the much hated K1.

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