Brookfield Property Partners LP to Sell Preferred Units

Canadian partnership Brookfield Property Partners LP (NASDAQ:BPY) will sell a new issue of Preferred Units.

The issue will be cumulative and will have an early redemption period starting 3/31/2024.

This issue will generate a K-1 at tax time. The issue will be unrated.

The intention of the company is for the issue trade with a permanent ticker symbol of BPYPP. At this time the OTC Grey market has not been announced.

BPY doesn’t have any other preferred units trading in the U.S., but their subsidiary Brookfield Property REIT does have a preferred trading under BPRAP which was originally a General Growth issue which was acquired by Brookfield REIT.

We do not believe the issue will be qualified for preferential tax treatment. Additionally while we have not had trouble buying the BPRAP issue there is a chance that some brokers may try to charge extra commissions for the issue being Canadian.

The preliminary prospectus can be found here.

19 thoughts on “Brookfield Property Partners LP to Sell Preferred Units”

  1. The prospectus is complicated tax wise because it’s Canadian and k-1. Can anyone help us understand?

  2. I may have found the reason. I only own 500 shares of SAF, but on 12/06 they paid me $199.65. On 2/28 they paid me $195.31, then on 3/11 they took back $4.34. If you subtract the $195.31 from $199.65 you get the same 4.34. Could it be that they overpaid on 12/6 and then adjusted it on 3/11. Seems quite odd the numbers are exactly the same.

  3. I like this website and look almost daily. I have no holdings in SAF. All I can say is that if one has not read EVERY word in a prospectus, ( which I do not ) , one can be surprised if a negative event occurs in the future; Take UNIT/WIN as an example. It has turned into a bad situation for shareholders, but what occured was deemed legal by the courts.
    Same with HTGC this week, where the CEO was indicted for illegal ‘personal’ activities. You never know what will occur, and the way I limit these negatives is 1) spread my holdings widely so that no single loss can damage me financially to a large extent , and 2) avoid purchasing and/or holding onto any entity involved in major litigation or known illegalities. There are 1000’s of investment opportunities so why take a chance ?

  4. Alert: The SAF interest payment of 0.390625/sh, made on 2/28 was just backed out from my account and instead, an amount of 0.38194 was credited today. Fidelity says SAR re-priced the security and the reduced payment is the new amount. This drops the yield from 6.25% to 6.125%. They offered more notes on 2/1 and I guess this re-pricing was part of that deal, even though I bought in 9/2018. I consider this a default and am selling my shares for a small gain.

    Note: I could not find an area to add this comment to the “Reader Initiated Alert” page, and it says “Comments are closed.”

    1. Thanks for the info. The same thing happened to me. I am not sure if I will sell SAF ( it’s a small position ), and will deliberate on it today.

    2. Thanks Bruce–this smells to me. I just checked mine and it was changed on 3/11 in eTrade.

      Simply on principal I am going to look into this a bit.

        1. Their latest investor presentation also lists both the initial offering and upsized secondary offering as 6.25%
          • Completed $40.0m 6.25% seven-year
          baby bond offering on August 28,
          2018 (“SAF”)
          • Completed $20.0m upsizing of SAF
          6.25% baby bond on February 5, 2019

        2. My order filled at my entry price, so I made ~1.4 dividends and am glad to be shut of this. I would still like to understand how this can happen. I called IR at 212-836-9606 but did not leave a message once I saw my order filled.

          1. After reading your comments, I decided to sell and move on. Had just got filled for a few shares of MTB-C, so needed the funds anyway. Made a couple of dollars plus a dividend.

            Thanks, Bruce, for the heads up. So nice that we can all help one another via this medium, thanks to Tim !!

      1. Tim, my SAF interest was changed from $781.30 to $763.90 on 3/11 as well. I called my Merrill Edge representative, but he’s on maternity leave and his fill-in said they would “have to research this” and get back with me. Any info would be quite helpful and I thank you in advance, Nomad

        1. Nomad, I too have 500 shares in SAF with TD and there was a small drop (from $195.31 to 190.97) in interest.

    3. I think I just figured out what happened here. I received an interest payment on 11/30 which was approximately $9.00 more than expected. Now this newest payment is about $9 less than expected. I think they just recouped the overage, which I have no problem with.
      for example:
      1000 shares, expected quarterly payment is $390.63
      Payment made on 11/30/2018 was 399.31 which was $8.68 more than expected.
      The new payment of $381.94 plus the overage of $8.68 equals $390.62, the expected quarterly interest payment.

      I apologize if my comments reflected badly on SAR, or motivated you to sell what looked like a shifty company. It was only when I was summarizing the situation in an SEC complaint that I finally recognized what likely happened. It didn’t help that Fidelity reported to me that the issue had been re-priced. I aborted the SEC complaint once I realized all was OK.

      I now regret selling and am sorry if I misled anyone. I still haven’t heard back from SAR IR, which would have cleared everything up quickly. And their best method to rectify the overpayment was to back out the excess from the 11/30 payment, not from the payment made a quarter later.

      1. The exact scenario you described happened to me. My first payment didn’t hit my account until 12/6/2018 instead of 11/30/2018. Just wondering since it hit 6 days late if that was the reason for the first payment being slighter higher. You may want to check the date of your first payment the security paid. Thanks for the catch.

      2. Bruce – What you describe here with your conversation with a rep at Fidelity is a lesson to be learned. I am convinced that these reps (not just at Fidelity) are trained to essentially make up answers and see if they float with the person on the phone rather than saying plainly, “I don’t know.” It just happens way too often. When listening to these guys, you always have to stop and think just how likely the answer is to be factual based on your own intuitiveness. In this case you fell for the bait where the guy thought he’d done his job
        and satisfied you on your inquiry even though you knew it couldn’t possibly be accurate. If you get a strange answer that doesn’t seem right, say thank you for your help, hang up and call again. The next guy’s likely to tell you something different anyway.

        1. Thanks for your wisdom here 2wr. It turns out someone called me this morning, I think from Fidelity, since I heard him say “…we spoke earlier…” before my wife inadvertently deleted the message. The caller ID is a toll-free number and I don’t feel like going on that fishing expedition to find who it was and what they wanted to tell me. So I’ll just assume Fidelity wanted to provide new info, like what I discovered on my own.

          This was definitely a learning experience for me: a new issue, unexpected payment amounts, and possibly a too-quick reaction on my part. I didn’t lose anything, and needed the cash anyway, but mostly regret putting out any bad info. I learn a lot from you and other posters here and am grateful to all, and especially to Tim for providing the forum.

          1. Don’t feel bad about it, Bruce. The decision to sell SAF was made by me and no one else, and I had a small gain anyway. But a big reason for selling was to free up funds for another purchase, to avoid going on margin.

            So, no issues here, it’s all cool. And who knows, maybe next week SAF could go down below what I sold at and I might buy it back and gain from that!! LOL

      3. FYI, here’s what IR said, which was not what I expected:
        “There was a custodial error whereby our custodian’s system calculated 28 days interest versus 30 days interest. Additional funds have been distributed to DTC and the incident has been rectified. If you have not already received the additional funds, you should expect to receive them shortly.”

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