Brookfield Renewable Announces $150 Million Green Perpetual Subordinated Note Issuance and Intention to Redeem Series 15 Preferred Units

Rhea-AI Summary

Brookfield Renewable Partners L.P. and Brookfield Renewable announce the closing of a $150 million issuance of fixed rate green perpetual subordinated notes. The sub notes have an effective coupon rate of 6.78% and will be listed on the NYSE under the symbol 'BEPJ'. The proceeds will be used to finance eligible investments and redeem Class A Preferred LP Units.

Insights

Financial Analyst

The issuance of $150 million in green perpetual subordinated notes by Brookfield Renewable represents a strategic move to optimize the company's capital structure. By securing a fixed effective coupon rate of 6.78% through a Canadian dollar swap, the company has effectively locked in its borrowing costs below the reset rate of its Series 15 Preferred Units. This could signal a proactive approach to debt management and a commitment to maintaining a favorable credit profile.

Investors should note the diversification in Brookfield Renewable's portfolio, which includes hydroelectric, wind, solar and storage facilities, as well as investments in nuclear services and carbon capture. This diversified approach could mitigate sector-specific risks and provide a stable cash flow, potentially enhancing the attractiveness of these subordinated notes as a long-term investment.

However, the subordinated nature of these notes means they rank lower in the event of liquidation, which adds a layer of risk for investors. The green label also indicates that the proceeds will be used for environmentally beneficial projects, aligning with the growing trend of sustainable investing and potentially opening up the investment to a broader market concerned with environmental impact.

Sustainable Investment Analyst

Brookfield Renewable's focus on green financing through its thirteenth green labelled corporate securities issuance underscores the increasing relevance of Environmental, Social and Governance (ESG) considerations in investment decisions. The adherence to the 2024 Green Financing Framework suggests a structured approach to ensuring that the proceeds are allocated towards projects that have a positive environmental impact.

Given the global push towards sustainability, Brookfield Renewable's investment in renewable energy assets and sustainable solutions, such as carbon capture and storage, positions the company favorably in the market. This could potentially lead to a premium on their securities due to the growing demand from ESG-focused investors.

Moreover, the redemption of the Series 15 Preferred Units using the proceeds from the green subordinated notes could be seen as a reiteration of the company's commitment to sustainability, potentially strengthening investor confidence in the company's long-term vision and strategy.

Energy Sector Analyst

Brookfield Renewable's expansive operating capacity and development pipeline, totaling nearly 33,000 megawatts and 155,400 megawatts respectively, place it as a significant player in the renewable energy sector. The breadth of their portfolio across hydroelectric, wind, solar and storage facilities, as well as their geographic diversification, provides a competitive edge in an industry that is subject to regional policy shifts and resource availability.

Investors should consider the potential growth trajectory of the renewable energy market, driven by global decarbonization efforts. Brookfield Renewable's strategic positioning and investments in emerging technologies like agricultural renewable natural gas and materials recycling could offer additional growth avenues and resilience against market volatility.

However, the energy sector's susceptibility to regulatory changes and the capital-intensive nature of renewable projects must be taken into account. The company's ability to secure financing through green instruments could be important in supporting its ambitious development pipeline and maintaining its growth momentum in the renewable energy sector.

All amounts in U.S. dollars unless otherwise stated

BROOKFIELD, News, March 25, 2024 (GLOBE NEWSWIRE) -- Brookfield Renewable Partners L.P. (TSX: BEP.UN; NYSE: BEP) and Brookfield Renewable Corporation (NYSE, TSX: BEPC) (together with Brookfield Renewable Partners L.P., “Brookfield Renewable”) today announced the closing of the issuance of a series of $150 million of fixed rate green perpetual subordinated notes (the “sub notes”), which upon settling of a concurrently executed Canadian dollar swap have an effective coupon rate of 6.78%. The sub notes, which have a coupon of 7.25%, will be listed on the New York Stock Exchange under the symbol “BEPJ” and have the same accounting and rating treatment as our Preferred Limited Partnership (“LP”) Units.

The sub notes will represent Brookfield Renewable’s thirteenth green labelled corporate securities issuance and the second issuance under Brookfield Renewable’s 2024 Green Financing Framework. Brookfield Renewable will use the net proceeds from the sale of the sub notes to finance or refinance eligible investments under Brookfield Renewable’s 2024 Green Financing Framework, including the redemption of its Class A Preferred LP Units, Series 15 (the “Series 15 Preferred Units”), which were scheduled to reset in April at approximately 70 basis points higher than the newly issued sub notes.

Wells Fargo Securities, LLC, BofA Securities, Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and RBC Capital Markets, LLC acted as joint book-running managers for the offering.

This news release does not constitute an offer to sell or the solicitation of an offer to buy the sub notes described herein, nor shall there be any sale of these sub notes in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

The sub notes were not offered or sold, directly or indirectly, in Canada or to any resident of Canada.

Redemption of Series 15 Preferred Units

Brookfield Renewable intends to redeem all of its outstanding Series 15 Preferred Units (TSX: BEP.PR.O) for cash on April 30, 2024. The redemption price for each Series 15 Preferred Unit will be C$25.00. Holders of Series 15 Preferred Units of record as of April 15, 2024 will receive the previously declared final quarterly distribution of C$0.359375 per Series 15 Preferred Unit.

Brookfield Renewable

Brookfield Renewable operates one of the world’s largest publicly traded platforms for renewable power and sustainable solutions. Our renewable power portfolio consists of hydroelectric, wind, utility-scale solar and distributed energy and storage facilities in North America, South America, Europe and Asia. Our operating capacity totals almost 33,000 megawatts and our development pipeline stands at approximately 155,400 megawatts. Our portfolio of sustainable solutions assets includes our investments in Westinghouse (a leading global nuclear services business) and a utility and independent power producer with operations in the Caribbean and Latin America, as well as both operating assets and a development pipeline of carbon capture and storage capacity, agricultural renewable natural gas and materials recycling.

Investors can access the portfolio either through Brookfield Renewable Partners L.P. (NYSE: BEP; TSX: BEP.UN), a Bermuda-based limited partnership, or Brookfield Renewable Corporation (NYSE, TSX: BEPC), a Canadian corporation. Further information is available at https://bep.brookfield.com. Important information may be disseminated exclusively via the website; investors should consult the site to access this information.

Brookfield Renewable is the flagship listed renewable power and transition company of Brookfield Asset Management, a leading global alternative asset manager with over $900 billion of assets under management.

Contact information:
Media:	Investors:
Simon Maine	Alex Jackson
+44 7398 909 278	+1 416 649-8196
simon.maine@brookfield.com	alexander.jackson@brookfield.com

FAQ

What is the effective coupon rate of the sub notes issued by Brookfield Renewable Partners L.P. and Brookfield Renewable ?

The effective coupon rate of the sub notes is 6.78%.

Where will the sub notes be listed for trading?

The sub notes will be listed on the New York Stock Exchange under the symbol 'BEPJ'.

How will Brookfield Renewable use the net proceeds from the sale of the sub notes?

Brookfield Renewable will use the net proceeds to finance or refinance eligible investments under their 2024 Green Financing Framework.

What is the redemption price for each Series 15 Preferred Unit to be redeemed by Brookfield Renewable?

The redemption price for each Series 15 Preferred Unit will be C$25.00.

What is the total operating capacity of Brookfield Renewable's renewable power portfolio?

Brookfield Renewable's operating capacity totals almost 33,000 megawatts.