BAM Shuffles Assets Down the Line

OK, you need a programme for this. Can’t tell your players without a programme!

Brookfield Asset Management (BAM) wholly owns Brookfield Renewable Power Inc.

Brookfield Renewable Power Inc. is the Manager of, and owns 42% of the units in, Brookfield Renewable Power Fund.

Brookfield Renewable Power Preferred Equity (BRF) is a wholly owned subsidiary of Brookfield Renewable Power Fund.

In a press release today:

Brookfield Renewable Power Fund (the “Fund”) and Brookfield Renewable Power Inc. (“BRPI”) today announced a bought-deal secondary offering, with a syndicate of underwriters led by CIBC and Scotia Capital Inc., through which BRPI, the selling unitholder, has agreed to sell 7,000,000 of its Fund units at an offering price of $21.85 per unit. The Underwriters have been granted an over-allotment option to purchase up to an additional 1,000,000 units at the offering price, under the same terms, exercisable for a period of 30 days from closing of the Offering.

BRPI and its affiliates currently own 45,190,838 Fund units or approximately 41.5% of the Fund’s units on a fully-exchanged basis. Upon the completion of the offering, but before giving effect to the over-allotment option, it is anticipated that BRPI will own 38,190,838 Fund units directly and indirectly, representing approximately 35.1% of the Fund’s units on a fully-exchanged basis, and remain its largest unitholder.

The proceeds from the offering will provide BRPI with additional liquidity.

The Fund will continue to be administered and managed by BRPI and remain Brookfield Asset Management Inc.’s exclusive vehicle for Canadian contracted operating and construction-ready hydro and wind power generation facilities.

DBRS comments:

The transaction does also not impact the ratings of the Fund (BBB (high), Stable trend, STA-2 (high)) nor those of the Fund’s affiliate Brookfield Renewable Power Preferred Equity Inc. (Pfd-3 (high), Stable trend) as BRP will remain the Fund’s Manager. As the transaction is a secondary offering, no sale proceeds will flow to the Fund.

This is reminiscent of the BPO Asset Shuffle of the summer.

It is of additional interest to learn:

DBRS has assigned a rating of BBB (high) with a Stable trend to the prospective issue by Brookfield Renewable Power Inc. (BRP) of $450 million of 5.14% Series 7 medium term notes due October 13, 2020 (the Notes).

The Notes are being offered pursuant to BRP’s Short Form Base Shelf Prospectus dated September 9, 2010, a Prospectus Supplement dated October 6, 2010, and a pricing supplement dated October 7, 2010. The Notes will rank equally with all other unsecured indebtedness of BRP. Proceeds from the offering will be used to refinance existing indebtedness, including BRP’s $400 million of 8.75% Series 5 notes, and for general corporate purposes. The offering is expected to close on October 13, 2010.

So “Inc” is raising another $50-million in debt, in addition to monetizing $150-million-odd in “Fund”. I wonder what will happen to the money?

Brookfield Renewable Power Preferred Equity has one series of preferreds outstanding, BRF.PR.A, a FixedReset relegated to Scraps on credit concerns.

Brookfield Asset Management has many preferred shares outstanding: BAM.PR.B & BAM.PR.K (floater); BAM.PR.E (Ratchet); BAM.PR.G (FixedFloater); BAM.PR.H, BAM.PR.I, BAM.PR.J & BAM.PR.O (Operating Retractible); BAM.PR.M & BAM.PR.N (PerpetualDiscount); and BAM.PR.P & BAM.PR.R (FixedReset)

One Response to “BAM Shuffles Assets Down the Line”

  1. […] comes on top of the recent BPO 5.15%+300 FixedReset and news that the group is selling a chunk of Brookfield Renewable Power Fund. So they’ve been active! I wonder if something is in the […]

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