Q: I would appreciate your thoughts on the above minimum rate reset preferred share. Please confirm the dividend receives the dividend tax credit , the new dividend rate and the security of the dividend. Also do you have any thoughts about why it appears to be trading at a discount to its peers especially when it has just reset at a higher rate. Do you have any concerns about these shares?Thanks Brian
5i Research Answer:
BIP.PR.F should be eligible for the tax credit. We wouldn't be concerned over the stability of the distribution as they would rank higher than the dividends from BIPC and the Brookfield group has been good at managing their capital. The yield is in-line with other BIP prefs, so nothing is jumping out at us in terms of concerns and it has largely been tracking general preferred share market moves over the last six months.