Brookfield Infrastructure (BIP) Offers Notes to Refinance Debt
Brookfield Infrastructure Partners L.P. BIP completes the public offering of subordinated notes worth $250 million with fixed coupon rates of 5% due May 24, 2081. It plans to use the net proceeds for redeeming its Class A preferred units Series 5, which were supposed to be redeemed on Sep 30, 2021 along with the remaining portion kept aside for general corporate purposes.
These notes were issued by the firm’s indirect wholly-owned subsidiary Brookfield Infrastructure Finance ULC.
Current Debt Situation
Currently, the firm’s total debt to total capital stands at 49.89%, comparing favorably with the industry average of 57.14%. As of Mar 31, 2021, the utility’s liquidity amounted to $4 billion. Its times interest earned (TIE) ratio of 2.19 in the March quarter is higher than 2.01 in the December quarter. Improving TIE ratio indicates that the firm has adequate financial flexibility to meet its debt obligations.
Prior to this, in September, the utility had issued 8 million Class A Series 13 preferred units worth $200 million to further enhance its commitment toward sustainable investment practices. Thus, refinancing of debts will allow the firm to lower its capital-servicing expenses and boost its margins.
Zacks Rank & Price Performance
Currently, the stock carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past year, shares of the company have gained 32.5%, outperforming the industry’s 12.5% rise.
Stocks to Consider
Utilities like MGE Energy Inc. MGEE, CMS Energy Corporation CMS and Hawaiian Electric Industries, Inc. HE are all carrying a Zacks Rank#2 (Buy) at present.
MGE Energy delivered an earnings surprise of 3.83% in the last four quarters, on average. It has a long-term (three-five years) earnings growth rate of 5.94%.
CMS Energy pulled off an earnings surprise of 6.84% in the trailing four quarters, on average. It has a long-term earnings growth rate of 6.52%.
Hawaiian Electric Industries has a long-term earnings growth rate of 7.10%. The Zacks Consensus Estimate for the company’s 2021 earnings has moved 8.8% north in the past 60 days.
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