Brookfield Asset Management Inc. (BAM) has announced the redemption price of 8.95% Notes worth the principal amount of C$150 million. These notes will be redeemed on Mar 6, 2013.
These notes, with redemption price of C$1077.62, were scheduled to mature on Jun 2, 2014. The notes are originally priced at C$1,000. Therefore, an earlier redemption would give investors an additional 8% benefit. The total redemption amount will also include accrued and unpaid interest of C$23.37, thereby bringing the total redemption price up to C$1100.99.
Over the past six months, Brookfield has been on a balance sheet restructuring spree. In Jan, the company announced the issuance of medium-term notes worth C$350 million, including C$175 million of a re-opening of notes with a Mar 2023 maturity and C$175 million principal amount of a re-opening of notes maturing in Apr 2019.
Further, in Nov 2012, the company concluded the issuance of 4.85% perpetual Class A Preference Shares, Series 36 worth C$200 million. In Oct 2012, the company announced redemption price of C$350 million worth of 8.95% Notes.
Redemption of notes is a positive step for banks since it helps bring down interest expenses. Further, a reduction in long-term debt will go a long way in improving the overall financials of Brookfield. For the fourth quarter of 2012, interest expenses were $637 million, up 2.7% year over year.
Currently, Brookfield retains Zacks Rank #3 (Hold). Other asset managers that are performing better than Brookfield include AllianceBernstein Holding L.P. (AB), Cohen & Steers Inc. (CNS) and Lazard Ltd. (LAZ). All these carry the Zacks Rank #1 (Strong Buy) status.
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