Brookfield Infrastructure Completes 60-Year Subordinated Note Offering
Brookfield Infrastructure Partners (NYSE: BIP; TSX: BIP.UN) announced the successful closing of a $150 million public offering of fixed rate subordinated notes due May 31, 2084, with a coupon of 7.25%.
An over-allotment option allows for an additional $22.5 million in notes for 30 days from the offering date. Listing under the symbol BIPJ, the proceeds will go towards refinancing existing debt and general corporate purposes.
Joint book-running managers for the offering included Wells Fargo, BofA Securities, J.P. Morgan, Morgan Stanley, RBC Capital Markets, and UBS. The notes were issued by Brookfield Infrastructure Finance ULC and guaranteed on a subordinated basis by Brookfield Infrastructure and its subsidiaries.
- $150 million raised through the issuance of subordinated notes.
- Over-allotment option could increase proceeds by an additional $22.5 million.
- Fixed coupon rate of 7.25% which might attract investors looking for stable returns.
- Proceeds aimed at refinancing existing indebtedness, potentially reducing interest expenses.
- The notes are guaranteed by Brookfield Infrastructure and its subsidiaries, providing additional security to investors.
- Listing on the NYSE under the symbol BIPJ enhances visibility and liquidity.
- Long maturity date of 60 years may discourage some investors.
- Subordinated nature of the notes means higher risk in case of default compared to senior debt.
- Potential dilution risk if the over-allotment option is exercised.
- Use of proceeds for general corporate purposes may not directly lead to immediate business growth.
Insights
Brookfield Infrastructure’s recent completion of a
This move is strategic in terms of debt management. Utilizing the proceeds to refinance existing indebtedness can potentially lower overall interest expenses, especially if the existing debt carries a higher interest rate. Additionally, the use of funds for general corporate purposes provides flexibility to Brookfield Infrastructure to invest in new projects, enhance current operations, or maintain liquidity.
The involvement of major financial institutions like Wells Fargo, BofA, J.P. Morgan, Morgan Stanley, RBC and UBS as joint book-running managers also adds credibility and indicates strong institutional support for Brookfield’s financial health.
Retail investors should consider the long-term implications of such an offering. While the notes offer attractive yields, the 60-year maturity period means investors need to think about the long-term stability and performance of Brookfield Infrastructure. Given Brookfield’s robust market position and diversified portfolio, this offering could be seen as a vote of confidence by the company in its future prospects.
Analyzing the market context of Brookfield Infrastructure’s note issuance, it is clear that this offering is aligned with current trends in capital markets where there is a demand for high-yield investments. The
From a market perspective, issuing subordinated notes is a way to diversify funding sources, especially considering the lengthy maturity period of 60 years. This duration helps in locking in the current interest rate, which might be beneficial if future interest rates rise. The over-allotment option of an additional
For retail investors, understanding the market reception to such offerings can be crucial. High demand for these notes could signal positive market sentiment towards Brookfield Infrastructure. However, investors should be cautious of the long-term nature of the investment and consider their own risk tolerance and investment horizon.
All amounts in U.S. dollars
BROOKFIELD, NEWS, May 31, 2024 (GLOBE NEWSWIRE) -- Brookfield Infrastructure Partners L.P. (NYSE: BIP; TSX: BIP.UN) (“Brookfield Infrastructure”) today announced the closing of a public offering of
The notes, which have a coupon of
The notes were issued by Brookfield Infrastructure Finance ULC (the “issuer”), an indirect wholly-owned subsidiary of Brookfield Infrastructure, and are guaranteed on a subordinated basis by Brookfield Infrastructure and certain of its other subsidiaries.
Wells Fargo Securities, LLC, BofA Securities, Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC and UBS Securities 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 securities described herein, nor shall there be any sale of these securities 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 securities were not offered or sold, directly or indirectly, in Canada or to any resident of Canada.
About Brookfield Infrastructure
Brookfield Infrastructure is a leading global infrastructure company that owns and operates high-quality, long-life assets in the utilities, transport, midstream and data sectors across the Americas, Asia Pacific and Europe. We are focused on assets that have contracted and regulated revenues that generate predictable and stable cash flows. Investors can access its portfolio either through Brookfield Infrastructure Partners L.P. (NYSE: BIP; TSX: BIP.UN), a Bermuda-based limited partnership, or Brookfield Infrastructure Corporation (NYSE, TSX: BIPC), a Canadian corporation.
Brookfield Infrastructure is the flagship listed infrastructure company of Brookfield Asset Management, a global alternative asset manager with over
Contact Information
| Media: | Investor Relations: |
| Simon Maine Managing Director, Corporate Communications Tel: +44 739 890 9278 Email: simon.maine@brookfield.com | Stephen Fukuda Senior Vice President, Corporate Development & Investor Relations Tel: +1 (416) 956-5129 Email: stephen.fukuda@brookfield.com |
Cautionary Statement Regarding Forward-looking Statements
This news release may contain forward-looking statements and information within the meaning of applicable securities laws. The words “will” and “intends”, derivatives thereof and other expressions which are predictions of or indicate future events, trends or prospects and which do not relate to historical matters, identify forward-looking statements. Forward-looking statements in this news release include statements regarding the offering and the use of proceeds therefrom. Although Brookfield Infrastructure believes that these forward-looking statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on them, or any other forward-looking statements or information in this news release. The future performance and prospects of Brookfield Infrastructure are subject to a number of known and unknown risks and uncertainties. Factors that could cause actual results of Brookfield Infrastructure to differ materially from those contemplated or implied by the statements in this news release are described in the documents filed by Brookfield Infrastructure with the securities regulators in Canada and the United States including under “Risk Factors” in Brookfield Infrastructure’s most recent Annual Report on Form 20-F and other risks and factors that are described therein. Except as required by law, Brookfield Infrastructure undertakes no obligation to publicly update or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise.
FAQ
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