Q: Issued at $25 and now trading at $12.10 for a yield of over 13%. This seems to imply there is a good chance Brookfield may walk away from these securities? Your thoughts?
Thanks
Thanks
5i Research Answer:
The prefs should be considered higher risk, but we doubt Brookfield will walk. We have numerous questions in the archives on these. There is no legal guarantee, but Brookfield would not walk away lightly. With some bank stocks trading at 7%+ yields, and considering the state of the office market, we would not assume the 13% yield 'assumes' anything. With the back up in interest rates yields across the board have risen. But of course the office space has been one of the hardest hit sectors.