Advertisement

Brookfield Infrastructure Issues Green Units Worth $200M

Brookfield Infrastructure Partners L.P. BIP recently issued 8 million Class A Series 13 preferred units worth $200 million. These inaugural green preferred units will further enhance the company’s commitment to sustainable investment practices.

Moreover, the unit holders will get a cumulative quarterly distribution of 5.125% per annum. Notably, the units will be listed on the New York Stock Exchange under the symbol BIP PR A.

Motive Behind the Act

Brookfield Infrastructure is making the most of low interest rates. Further, it is utilizing the proceeds to refinance its recently completed and future Eligible Green Projects including the development and redevelopment of such projects. Apart from project allocations, some portion of the proceeds will be used to repay amounts drawn under the utility’s unsecured revolving credit facility.

Current Debt Situation

Currently, the company’s total debt to total capital stands 52.76%, comparing favorably with the industry average of 57.53%. Its times interest earned ratio of 1.74 in the June quarter is lower than 1.97 in the March quarter. Though the ratio decreased in the second quarter,  the same with a value of more than 1 indicates that the utility will be able to meet its near-term debt obligations.

Interest expenses of the partnership at the end of first-half 2020 were $529 million, up from $453 million in the year-ago period. Also, in August, the utility had entered into an agreement to sell $500 million aggregate principal amount of Series 8 medium-term notes to redeem 3.452% Series 2 Notes due Mar 11, 2022. Thus, refinancing of debts will allow the firm to lower its capital-servicing expenses and boost its margins.

Peer Moves

Other companies from the same sector are also capitalizing on this opportunity of near-zero interest rates to incur debt at cheaper rates, repay or refinance their debt obligations and reduce the debt-servicing costs. Recently, NiSource Inc. NI, Bloom Energy Corporation BE and Linde plc LIN among others opted for refinancing their debts.

Zacks Rank & Price Performance

Currently, the stock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past three months, shares of the company have gained 9.6% against the industry’s fall of 3%.

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

See the 5 high-tech stocks now>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
NiSource, Inc (NI) : Free Stock Analysis Report
 
Brookfield Infrastructure Partners LP (BIP) : Free Stock Analysis Report
 
Linde plc (LIN) : Free Stock Analysis Report
 
Bloom Energy Corporation (BE) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research