Back to top

Analyst Blog

On Thursday, Brookfield Asset Management Inc. declared a public offering of 8 million Class A Preferred Shares, Series 34. The company priced the shares at CDN$25 per share. The sale proceeds, worth CDN$200 million, will be used for general corporate purposes as well as for redemption of the Class A Preference shares, Series 11.

The Preferred Shareholders will receive a cumulative quarterly fixed dividend, yielding 4.20% on an annual basis for the initial period concluding March 31, 2019. Subsequently, the dividend rate will change in every five years at an identical rate to the 5-year Government of Canada bond yield plus 2.63%. The estimated date for the closure of the transaction is September 12, 2012.

In addition, Brookfield has provided an option to the underwriters for purchasing an additional 2 million shares. This option will expire 48 hours before the closing of the transaction. The additional shares will be issued at $25, yielding gross proceeds of $250 million.

In accordance with the Brookfield Asset Management's present short-form base shelf prospectus as of June 7, 2011, which was later modified on June 13, 2012, the company will make the shares available in all districts of Canada. However, the shares may not be sold in the United States absent registration with the United States Securities and Exchange Commission or an exemption from registration under the U.S. Securities Act.

TD Securities Inc., a unit of The Toronto-Dominion Bank (TD - Snapshot Report), Canadian Imperial Bank of Commerce (CM - Snapshot Report), RBC Capital Markets, a subsidiary of Royal Bank of Canada (RY - Snapshot Report) and Scotia Capital Inc., a division of The Bank Of Nova Scotia (BNS - Snapshot Report) acted as underwriters of the deal. These financial institutions have committed to purchase the entire offering from Brookfield.

We believe that the issuance of preferred shares will finance future projects for Brookfield as well as improve its financials to a great extent.

Brookfield currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
PLANAR SYST… PLNR 4.44 +5.21%
BITAUTO HOL… BITA 81.71 +5.12%
CTPARTNERS… CTP 16.66 +4.26%
CHINA BIOLO… CBPO 47.91 +3.30%
MALLINCKROD… MNK 72.94 +2.85%