Brookfield Infrastructure: Investment Grade Securities For 64 Cents On The Dollar

2025-05-04 11:50:00 ET

Summary

• Brookfield Infrastructure grew its per unit FFO by 4 cents over its year-ago comp during its fiscal 2025 first quarter.
• Long-term contracted cash flows, inflation indexation, and broad geographic and infrastructure asset diversification help render BIP relatively recession-resistant.
• FFO per unit could still see growth through 2025, even if the US dips into a technical recession with the company currently paying out a 5.55% dividend yield.

Brookfield Infrastructure Partners ( BIP ) ( BIPC ) has five outstanding fixed-income securities that have all sold off moderately on the back of the spike in credit spreads seen in the aftermath of the rolling drumbeat of tariffs enacted this year. The two preferreds, the 5.125% Series 13 Preferreds ( BIP.PR.A ) and the 5.00% Series 14 Preferreds ( BIP.PR.B ), are down by roughly 5% over the last 1-year. Critically, unlike the SPY, they've yet to fully recover to their level prior to April 02, 2025, "Liberation Day" reciprocal tariffs. The Series 13, which is structured as a partnership and issues a K-1 form, is now trading for $16.65 per unit, around a 33% discount to their $25 per unit liquidation value or for 67 cents on the dollar. The Series 14 is trading for 64 cents on the dollar. The bonds are trading at a range of discounts with the steepest being the 5.0% Subordinated Notes due 2081 ( BIPH ) which are trading at a 35% discount....

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