Brookfield Infrastructure: I'm Still Buying The Investment-Grade Bonds

2025-09-28 04:34:35 ET

Brookfield Infrastructure's ( BIP ) ( BIPC ) fixed-income securities offer both capital gain upside and a healthy yield from an investment-grade balance sheet set to be strengthened by pending Fed rate cuts, albeit with economic headwinds on the horizon. There are five outstanding fixed-income securities spread across two preferred shares and three baby bonds: 5.0% Subordinated Notes due 2081 ( BIPH ), 5.125% Perpetual Subordinated Notes due 2081 ( BIPI ), and 7.25% Subordinated Notes due 2081 ( BIPJ ). The preferreds both issue a Schedule K-1 tax form, which renders them less attractive from a portfolio admin perspective. The tax forms can sometimes be received late, while placing the tax accountability on individual members rather than the business entity. The baby bonds are a mix of perpetual and extremely long-dated maturity securities, which also renders them less attractive to investors who prefer more near-term maturities. Crucially, it also means the value of the bonds is more firmly anchored to long-term U.S. Treasury yields....

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