Brookfield Asset Management, a company with an appetite for deals, pulled in $300-million on Tuesday by tapping income-hungry investors.
In the latest corporate debt financing that capitalized on strong individual investor interest in high quality paper, Brookfield was able to double the size of a planned offering of six-year bonds to $300-million. The new debt features a 5.2 per cent interest rate, or 225 basis points over the comparable Government of Canada bond. Federal government debt yields are at record lows, and that's pushing the retail crowd into the corporate bond market.
CIBC World Markets and RBC Dominion Securities led the transaction.
To give investors comfort, single-A-rated Brookfield agreed to buy back this paper at 101 cents on the dollar if its credit rating drops below investment grade after a change in control at the conglomerate.
Brookfield has been an active player in real estate, infrastructure and power since the credit crunch began, as assets can be purchased at bargain prices on any historic measure. Last week, Brookfield unveiled a recapitalization plan for Chicago-based mall owner General Properties Inc. that would see the Canadian company inject $2.63-billion (U.S.).