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Brookfield Renewable Partners: A New 5.25% Preferred Units IPO


  • The Brookfield Renewable Partners' new preferred unit, BEP-A, is trading above its par value.
  • BEP is one of the Brookfield Asset Management's subsidiaries.
  • BEP-A has the third highest current yield in the sector.
  • Comparison with all other "BBB-" rated preferred stocks and units that pay a fixed dividend rate.
  • Schedule K-1.
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A new series of Preferred Units, issued by Brookfield Renewable Partners (NYSE:BEP), a subsidiary of Brookfield Asset Management (BAM), is coming to the market. Just several days after another BAM's subsidiary, Brookfield Property Partners issued its Series 3 Preferred Units, BPYPN. In fact, for the last year, from a total of 6 series of preferred units IPOs, 4 belong to BAM's partnerships. In this article, we want to shed light on the newest exchange-traded Preferred Units issued by Brookfield Renewable Partners.

The New Issue

Before we submerge into our brief analysis, here is a link to the 424B5 Filing by Brookfield Renewable Partners LP - the prospectus.

Source: SEC.gov

For a total of 8M units issued, the total gross proceeds to the company are $200M. You can find some relevant information about the new preferred units in the table below:

Source: Author's spreadsheet

Brookfield Renewable Partners L.P. 5.25% Class A Preferred Limited Partnership Units, Series 17 (NYSE: BEP-A) pay a fixed dividend at a rate of 5.25%. The new preferred units carry a 'BBB-' S&P rating and are callable as of 03/31/2025. Currently, the new issue trades a little above its PAR, at a price of $25.12. This translates into a Current Yield of 5.22% and Yield-to-Call of 5.14%.

Here is how the stock's YTC curve looks like right now:

Source: Author's spreadsheet

The Company

Brookfield Renewable Partners operates one of the world's largest publicly-traded renewable power platforms. Its portfolio consists of over 19,000 MW of capacity and 5,274 generating facilities in North America, South America, Europe and Asia. Its investment objective is to deliver long-term annualized total returns of 12%-15%, including annual distribution increases of 5-9% from organic cash flow growth and project development. It has an established track record of creating value by prudently acquiring, building and financing assets, and actively managing its operations.

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This article was written by

Arbitrage Trader profile picture

Arbitrage Trader, aka Denislav Iliev has been day trading for 15+ years and leads a team of 40 analysts. They identify mispriced investments in fixed-income and closed-end funds based on simple-to-understand financial logic.

Denislav leads the investing group Trade With Beta, features of the service include: frequent picks for mispriced preferred stocks and baby bonds, weekly reviews of 1200+ equities, IPO previews, hedging strategies, an actively managed portfolio, and chat for discussion. Learn more.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (8)

Limited stock being chased by endless billions of $$$ seeking renewables. Oil and pipeline companies will be forced private.
Wish it didn’t have a k1. Else I would buy this up as much as possible.
infowarrior76 profile picture
What's wrong with K1?
kbaba profile picture
I bought like a quadruple position of this BEP preferred as a great place to park money in a safe and helpful to all way that's relatively immune from corona virus damage while still getting a decent yield
I may be wrong but I’m visioning a trend that a stock with the word “ renewables “ will do well. Regardless of the quality or profits of the company. The social justice warriors and snowflakes will eat them up. BEP.UN has gone through the roof. The ETF fund managers will follow the trend of course. They will dump fossil fuels and binge on renewables, fundamentals be damned. Play the game, don’t try to change it. Logic be damned. Eventually shale oil will smarten up and be forced to produce good profits and FCF. Right now due to their history they are toxic waste.
GabsterX profile picture
A bit like anything with a .com in its name was going through the roof back in 2000, anything not related to the Internet was toxic and doomed to fail.
craigimass profile picture
Would it be a fair guess to say you were perhaps down on Tesla while it made a 20X gain in value?
The fundamentals are very clear - and I say that as one who has been in the energy field my entire life. My oil and fossil fuels investments have been doing terrible for many years. Renewables are now cheaper than coal or nuclear.
So, perhaps instead of using "Trump Deplorable Words" you could speak English and tell us why millions of people want to buy Teslas and use cheaper renewable power?
Are these people just snowflakes....while "Real Man" get 10MPG in a GM honking SUV?
Logic is hard. But see if you can look up the lifetime costs of hydro and current PV and compare them to Nuclear or Oil. Let us know what logic and reason show, snowflakes aside.
craigimass profile picture
Yep - and if you look at the record, the most valuable companies in the world 20 years after include Apple, Facebook, Google, Amazon and many others RELATED TO THE INTERNET. And look at BRKB (I'm a big holder)....hasn't done so well as before. Therefore your post has been proven correct in basic logic. We are in a knowledge and communications and sustainable new economy. My MLPs in the fossil fuel industry have done so poorly that I won't sell them b/c the yield is so high (but I lost 60% of the capital!).
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