Bermuda-based utility partnership
Brookfield Infrastructure Partners L.P.
) announced that it will issue $400 million, 3.455% Series 1,
medium-term notes due October 2017 to refinance its current debt
obligations, recompense outstanding amounts under its credit
facilities and for general corporate purposes. The interest is
payable on a semi-annual basis.
The offering of notes is expected to be completely guaranteed by
Brookfield Infrastructure and its key business wings. Subject to
certain customary conditions, the closing date for the issuance of
notes is set on or around October 10, 2012. The debts were issued
as per the condition laid out in shelf prospectus dated July 12,
Standard& Poor Rating Services has assigned a BBB+ rating to
the notes implying that the partnership has the capability to meet
its financial commitments depending upon current economic
Brookfield's debt-to-equity ratio at the end of the second
quarter 2012 was 73.8%, down from 80.4% at year-end 2011. However,
with the issuance of notes, Brookfield's debt-to-equity ratio is
expected to revert to 80.3%. Interest expenses of the partnership
in the second quarter 2012 were $96 million which could increase in
the following quarters with the currently proposed issuance.
The partnership is relatively new and over the five years of
existence it has consistently issued units and notes for meeting
its liquidity needs. Brookfield Infrastructure recently concluded
refinancing of $1.3 billion, 9.6% maturing bonds to minimize its
debt levels over a span of five years in its North American gas
The partnership's cash in hand as of June 30, 2012, declined by
a sharp 45.3% to $128 million from $153 million as of December 31,
2011. Net debt as of June 30, 2012, was $5,593 million, up from
$5,193 million at the end of June 2011.
The Zacks Consensus Estimates for the third quarter and full
year 2012 are currently pegged at 55 cents per unit and $2.27 per
unit, respectively. In the fourth quarter 2012, the partnership
plans to raise roughly $350 million and $120 million of corporate
debt to finance its debt liabilities related to its natural gas
transmission businesses. One of its peers is Texas-based
Brookfield Infrastructure is primarily engaged in the ownership
and operation of premier utilities, transport and energy, and
timber assets in North and South America, Australasia and Europe.
It operates high quality, long-life assets that generate stable
cash flows and require relatively minimal maintenance capital. The
partnership has a market capitalization of $6.43 billion.
BROOKFIELD INFR (BIP): Free Stock Analysis
CALPINE CORP (CPN): Free Stock Analysis Report
To read this article on Zacks.com click here.