Brookfield Infrastructure's 7.2% Yield Investment-Grade Bonds Are On Sale For 68 Cents On The Dollar

2025-01-05 12:42:29 ET

Summary

• I've been buying Brookfield Infrastructure's 5.0% Subordinated Notes due to their significant discount, trading at 68 cents on the dollar.
• The notes offer an asymmetrical investment profile supported by BIP's investment-grade balance sheet, diversified assets, and strong funds from operation generation.
• BIP's $15 billion market cap and "BBB+" Fitch rating underscore its stability and potential for long-term returns.
• The recent price collapse presents a unique buying opportunity driven by market volatility and end-of-year tax loss selling.

I've been buying Brookfield Infrastructure's ( BIP ) ( BIPC ) public trading 5.0% Subordinated Notes ( BIPH ) since the end of December when heavy trading volume, angst over long-term yields, and end-of-year tax loss selling drove a remarkable collapse in the price of the security to a new 1-year low. BIPH was trading hands as low as $16.33 per note. The notes are currently trading at a roughly 32% discount to their $25 per note liquidation value, or for roughly 68 cents on the dollar. I think this security offers investors an extremely asymmetrical investment profile on the back of BIP's investment grade balance sheet, diversified infrastructure asset base, and strong funds from operation profile. ...

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