Author Topic: BAM - Brookfield Asset Management  (Read 510811 times)

petec

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Re: BAM - Brookfield Asset Management
« Reply #1590 on: June 28, 2020, 10:30:43 AM »
$60B in the war chest, but they simultaneously arent paying some of their mortgages and begging lenders for forbearance, while showing no mercy and demanding their tenants pay their rents..... I really dont like these guys as people, but I guess its about making money, eh?

The war chest is primarily investor money in new funds. It can’t be used to pay mortgages on assets held in old funds. If you look at where the assets are owned, you don’t see much cash. They need tenant income to service mortgages.
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villainx

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Re: BAM - Brookfield Asset Management
« Reply #1591 on: June 29, 2020, 12:49:20 PM »

ValueMaven

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Re: BAM - Brookfield Asset Management
« Reply #1592 on: June 30, 2020, 05:14:14 AM »
Decent interview actually.  Appears to be on the same day Flatt interviewed with Reuters.  Flatt has been making his media rounds again lately.  Interesting commentary on the ADNOC deal recently.  I still find it interesting that: BAM hasnt issued a PR on this deal re: size for investors + co-invest levels and IRR expected on the transaction. 

BTW: comment on $60B of cash - its hard to say how much cash b/c of the sub's BAM can issue equity if needed....last figure I saw was: $12B of corp credit lines on BAM + subs, plus another $5B in cash and liquid holdings at the parent...plus another $50B of investor capital

This is a great quote from Flatt on 3/23 (market bottom):It is very easy to invest in the markets when times are good, but it is in times of market decline that following the tenets of value investing matters most. We encourage you to follow them. We know this is a very stressful time for everyone. Please know that we are watching out for your capital.

thepupil

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Re: BAM - Brookfield Asset Management
« Reply #1593 on: July 02, 2020, 05:23:51 AM »
https://seekingalpha.com/news/3588199-brookfield-property-soars-13-on-plan-to-buy-back-890m-of-units

Seeking alpha is labeling this as a buyback, but it is actually a tender offer where BAM and institutional partners are buying BPY from public holders at a premium.

I find it interesting for a number of reasons:

BAM doubling (tripling?) down on BPY’s office and highly levered retail.

The institutional buyers are acknowledging that the undisturbed price was too cheap and/or illiquid So they’re having to tender rather than buy in the open market. It also helps that the GP (Brookfield) probably game up with the transaction and pitched it rather than the institutional buyer thinking of doing this on their own.

Will be curious to see if other real estate companies follow suit? Will Blackstone get tired of owning 2-3% of the companies it bought and make a tender for a larger stake, for example.

Also, yesterday, the ratings agencies mostly affirmed the NYC REITs credit ratings (but changed outlook to negative). They downgraded BPY a notch though.

Quote
Moody's downgrades Brookfield Property REIT's CFR to Ba3; negative outlook
New York, July 01, 2020 -- Moody's Investors Service, ("Moody's") downgraded the ratings of Brookfield Property REIT Inc. ("BPYU"), including its Corporate Family Rating to Ba3 from Ba2 and its senior secured bank credit facility and senior secured notes to B1 from Ba3. The REIT's Speculative Grade Liquidity rating remains unchanged at SGL-4. The rating outlook is negative. This concludes the review for downgrade on Brookfield that was initiated on April 2, 2020.
The downgrade reflects Brookfield's elevated leverage entering the pandemic and the high likelihood of weakening operating income in the next four to six quarters such that its net debt/EBITDA will be sustained well above the downgrade trigger of 11.5x on a pro-rata JV basis. Moody's also expects Brookfield to face significant hurdles in order to refinance its large amount of mortgage debt maturities this year while its covenant compliance cushion remains very modest.


Quote
The Company will fund the Offer by drawing on an equity commitment (the “equity commitment”) it has received from Brookfield Asset Management Inc. (“BAM”) for up to $1 billion. BAM’s equity commitment will be funded as to 50% from cash on hand and the remainder from managed accounts on behalf of certain of its institutional clients. The equity commitment can be called upon by the Company until December 31, 2020 in exchange for the issuance of Units and/or Redeemable/Exchangeable Partnership Units of the Company’s subsidiary, Brookfield Property L.P., at a price per unit equal to the price to be paid by the Company in the applicable buyback.

“This offer will provide unitholders who desire liquidity an opportunity to sell their stock at a premium to the market price, while preserving BPY’s liquidity,” said Brian Kingston, Chief Executive Officer. “BAM is providing support for the offer by agreeing to fund the bid in exchange for an additional equity interest in our business.”

The equity commitment has been approved by the board of directors of the Company’s general partner upon the recommendation of a special committee comprised of all the independent directors.

BAM currently owns 55% of the outstanding Units (calculated on a fully exchanged basis, including Redeemable/Exchangeable Partnership Units of Brookfield Property L.P.). If the Offer results in 74,166,670 Units being purchased and cancelled by our Company, BAM and its affiliates will hold an aggregate of 593,915,513 Units and Redeemable/Exchangeable Units, or approximately 63% of our business on a fully exchanged basis. The issuance of Units and Redeemable/Exchangeable Units is subject to approval by Nasdaq and the Toronto Stock Exchange.
« Last Edit: July 02, 2020, 05:33:58 AM by thepupil »

Spekulatius

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Re: BAM - Brookfield Asset Management
« Reply #1594 on: July 02, 2020, 01:51:41 PM »
The more BAM owns of BPY, the larger the discount to NAV is going to get, which makes a buyout a necessity. Then they are paying the management fees from their left pocket into their right.

This thing is so highly levered with underwater assets that are impaired to a significant extend (Retail, Office) that really wonder what the end game is going to look like.
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villainx

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Re: BAM - Brookfield Asset Management
« Reply #1595 on: July 03, 2020, 11:15:15 AM »
BAM ownership of its subs was meant to go down, but it's been steadily rising. 

BPY purchase makes its dividend safer?