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TABLE OF CONTENTS Prospectus Supplement
TABLE OF CONTENTS
Table of Contents
Filed pursuant to General
Instruction II.L. of Form F-10
File Nos. 333-249132 and 333-249132-01
A copy of this preliminary prospectus supplement has been filed with the securities regulatory authorities in each of the
provinces of Canada, and with the U.S. Securities and Exchange Commission pursuant to an effective U.S. registration statement, but has not yet become final for the purpose of the sale
of securities. Information contained in this preliminary prospectus supplement may not be complete and may have to be amended. This prospectus supplement is not an offer to sell these securities and
it is not soliciting an offer to buy these securities in any U.S. state where the offer or sale is not permitted.
No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise.
This prospectus supplement together with the short form base shelf prospectus to which it relates dated October 6, 2020, as amended or supplemented, and each document
incorporated by reference in the short form base shelf prospectus, as amended or supplemented, constitutes a public offering of these securities only in those jurisdictions where they may be lawfully
offered for sale and therein only by persons permitted to sell such securities.
Information has been incorporated by reference in this prospectus supplement and the accompanying short form base shelf prospectus to which it relates, as amended or
supplemented, from documents filed with securities commissions or similar authorities in Canada. Copies of the documents incorporated herein by reference may be obtained on
request without charge from the office of the Corporate Secretary of the Company at Suite 300, Brookfield Place, 181 Bay Street, Toronto, Ontario, Canada, M5J 2T3, Telephone:
(416) 363-9491, and are also available electronically at www.sedar.com.
SUBJECT TO COMPLETION, DATED APRIL 7, 2021
PRELIMINARY PROSPECTUS SUPPLEMENT
(To a Short Form Base Shelf Prospectus Dated October 6, 2020)
BROOKFIELD FINANCE INC.
US$ % Notes
due , 2031
Fully and unconditionally guaranteed by Brookfield Asset Management Inc.
Brookfield Finance Inc. ("BFI") is offering US$ aggregate principal amount of
% notes due , 2031 (the "notes"). BFI will pay interest on the notes each and . BFI
will make the first interest payment on the notes on , 2021. Unless BFI redeems the notes earlier, the notes will mature
on , 2031. BFI may redeem some or all of the
notes at any time at the applicable Redemption Price (as defined herein). BFI will be required to make an offer to purchase the notes at a price equal to 101% of their principal amount, plus
accrued and unpaid interest to the date of repurchase upon the occurrence of a Change of Control Triggering Event (as defined herein). BFI may also redeem all of the notes at any time in the
event that certain changes affecting Canadian income taxation occur. The notes will be fully and unconditionally guaranteed as to payment of principal, premium (if any) and interest and certain
other amounts by Brookfield Asset Management Inc. (the "Company" and collectively with its direct and indirect subsidiaries, including
BFI, "Brookfield"). As described under "Use of Proceeds" herein, Brookfield intends to allocate an amount equal to the net proceeds from the sale of the
notes to the financing and/or refinancing of recently completed and future Eligible Green Projects (as defined herein), including the development and redevelopment of such projects.
The notes are a new series of securities with no established trading market. The notes are not and will not be listed on a securities exchange or quotation system and
consequently, there is no market through which the notes may be sold and purchasers may not be able to resell the notes purchased under this prospectus supplement. This may affect the pricing of the
notes in the secondary market, the transparency and availability of trading prices, the liquidity of the notes and the extent of issuer regulation. See "Risk Factors".
Table of Contents
Investing in the notes involves risks. See "Risk Factors" beginning on page S-8.
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Per Note
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Total
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Public Offering Price(1)
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%
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US$
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Underwriting Fees
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%
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US$
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Proceeds to BFI (before expenses)
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%
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US$
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(1)
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The
effective yield of the notes, if held to , 2031, will be %.
Interest
on the notes will accrue from , 2021. The offering price of the notes will be payable in U.S. dollars.
This offering is made by a Canadian issuer that is permitted, under a multijurisdictional disclosure system adopted by the United States and Canada, to prepare this
prospectus supplement and the accompanying base shelf prospectus in accordance with Canadian disclosure requirements. Prospective investors should be aware that such requirements are different from
those of the United States. The financial statements incorporated herein have been prepared in accordance with International Financial Reporting Standards as issued by the International
Accounting Standards Board ("IFRS") and are subject to Canadian auditing and auditor independence standards, and thus may not be comparable to financial statements of
U.S. companies.
Prospective investors should be aware that the acquisition of the notes may have tax consequences both in the United States and in Canada. Such consequences for
investors who are residents in Canada or are residents in, or citizens of, the United States may not be described fully in this prospectus supplement and the accompanying base shelf prospectus.
Prospective investors should consult their own tax advisors with respect to their particular circumstances. Prospective investors should read the risk factors and tax discussion beginning on
pages S-8 and S-27, respectively.
The enforcement by investors of civil liabilities under U.S. federal securities laws may be affected adversely by the fact that BFI and the Company are incorporated
under the laws of the Province of Ontario, that some or all of BFI's and the Company's officers and directors may be residents of Canada, that some or all of the underwriters or experts named in this
prospectus supplement and the accompanying base shelf prospectus may be residents of Canada and that such persons and all or a substantial portion of BFI's and the Company's assets may be located
outside the United States.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC"), ANY U.S. STATE SECURITIES COMMISSION OR ANY CANADIAN
SECURITIES REGULATORY AUTHORITY, NOR HAS THE SEC, ANY U.S. STATE SECURITIES COMMISSION OR ANY CANADIAN SECURITIES REGULATORY AUTHORITY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Citigroup
Global Markets Inc., SMBC Nikko Securities America, Inc., Deutsche Bank Securities Inc., and HSBC Securities (USA) Inc.
(the "underwriters"), as principals, conditionally offer the notes, subject to prior sale, if, as and when issued by BFI and accepted by the
underwriters in accordance with the conditions contained in the underwriting agreement referred to under "Underwriting". This offering will be made in Canada by (i) Citigroup Global Markets
Canada Inc., a broker-dealer affiliate of Citigroup Global Markets Inc., and (ii) HSBC Securities (Canada) Inc., a broker-dealer affiliate of HSBC Securities (USA) Inc. SMBC Nikko
Securities America, Inc. and Deutsche Bank Securities Inc., whom we refer to in this prospectus supplement as underwriters, will not offer the notes offered hereby in Canada. In connection with
this offering, the underwriters may over-allot or effect transactions which stabilize or maintain the market price of the notes at levels other than those which otherwise might prevail on the open
market. Such transactions, if commenced, may be discontinued at any time. In certain circumstances, the underwriters may offer the notes at a price lower than stated above. See "Underwriting".
Delivery
of the notes, in book-entry form only, will be made through The Depository Trust Company on or about , 2021.
BFI's
head and registered office is at Brookfield Place, 181 Bay Street, Suite 300, P.O. Box 762, Toronto, Ontario M5J 2T3.
Joint Book-Running Managers
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Citigroup
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SMBC Nikko
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Deutsche Bank Securities
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HSBC
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Table of Contents
TABLE OF CONTENTS
Prospectus Supplement
Base Shelf Prospectus
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You should rely only on the information contained in or incorporated by reference in this prospectus supplement (the "prospectus
supplement"), together with the accompanying base shelf prospectus dated October 6, 2020 (the "base shelf prospectus"). We have not authorized anyone to provide you with information that
is different. You should not assume that the information contained in this prospectus supplement or the accompanying base shelf prospectus is accurate as of any date other than the date on the front
of this prospectus supplement. This document may only be used where it is legal to sell the notes.
IMPORTANT NOTICE ABOUT INFORMATION IN THIS PROSPECTUS SUPPLEMENT AND
THE ACCOMPANYING BASE SHELF PROSPECTUS
This
document is in two parts. The first is this prospectus supplement, which describes the specific terms of the notes. The second part, the accompanying base shelf prospectus, gives
more general information, some of which may not apply to the notes. Generally, the term "Prospectus" refers to both parts combined.
As
used in this prospectus supplement, unless the context otherwise indicates, references to the "Company" refer to Brookfield Asset
Management Inc. and references to "we", "us",
"our" and "Brookfield" refer to the Company and its direct and indirect subsidiaries,
including BFI.
If
the description of the notes varies between this prospectus supplement and the accompanying base shelf prospectus, you should rely on the information in this prospectus supplement.
DOCUMENTS INCORPORATED BY REFERENCE
This
prospectus supplement is deemed to be incorporated by reference in the accompanying base shelf prospectus solely for the purpose of the notes offered hereunder.
The
following documents, filed with the securities regulatory authorities in each of the provinces and territories of Canada and filed with, or furnished to, the SEC, are specifically
incorporated by reference in, and form an integral part of, this Prospectus:
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(a)
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the Company's annual information form for the
financial year ended December 31, 2020, dated March 23, 2021
(the "AIF");
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(b)
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the Company's audited comparative
consolidated financial statements and the notes thereto for the fiscal years ended December 31, 2020 and 2019, together with the accompanying auditor's
report thereon;
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(c)
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the management's discussion and analysis for
the audited comparative consolidated financial statements referred to in paragraph (b) above
(the "MD&A");
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(d)
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the Company's management information circular,
dated April 27, 2020;
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(e)
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the
template version (as defined in National Instrument 41-101 General
Prospectus Requirements ("NI 41-101")) of the preliminary term sheet for the notes
dated , 2021, filed on
SEDAR on , 2021 and filed with the SEC as Exhibit 99.1 to the Form 6-K filed by the Company
on , 2021 in connection with the issuance of the notes
(the "Preliminary Term Sheet"); and
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(f)
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the
template version of the final term sheet for the notes dated , 2021, filed on SEDAR
on , 2021 and to be filed by the
Company with the SEC as Exhibit 99.1 to a Form 6-K on , 2021 in connection with the issuance of the notes (the "Final Term
Sheet" and, together with the Preliminary Term Sheet, the "Marketing Materials").
The
Marketing Materials are not part of this Prospectus to the extent that the contents of the Marketing Materials have been modified or superseded by a statement contained in this
prospectus supplement.
All
of the Company's documents of the type described in Item 11.1 of Form 44-101F1 Short Form
Prospectus (as defined in NI 41-101), and any "template version" of "marketing materials" (each as defined in
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NI 41-101),
which are required to be filed by the Company or BFI with the securities regulatory authorities in Canada, and filed with the SEC pursuant to Section 13(a), 13(c)
or 15(d) of the United States Securities Exchange Act of 1934, as amended (the "Exchange Act"), after the date of this prospectus
supplement and prior to the termination of this offering shall be deemed to be incorporated by reference in this prospectus supplement.
We
will provide to each person to whom this Prospectus is delivered, a copy of any or all of the information that has been incorporated by reference in this Prospectus, upon written or
oral request, without charge, at the office of the Corporate Secretary of the Company at Suite 300, Brookfield Place, 181 Bay Street, Toronto, Ontario, Canada, M5J 2T3, Telephone:
(416) 363-9491.
Any statement contained in this Prospectus or in a document incorporated or deemed to be incorporated by reference in this Prospectus shall be deemed to be
modified or superseded for the purposes of this Prospectus to the extent that a statement contained in this Prospectus or in any other subsequently filed document that also is or is deemed to be
incorporated by reference in this Prospectus modifies or supersedes that statement. The modifying or superseding statement need not state that it has modified or superseded a prior statement or
include any other information set forth in the document that it modifies or supersedes. The making of a modifying or superseding statement shall not be deemed an admission for any purposes that the
modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is
necessary to make a statement not misleading in light of the circumstances in which it was made. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
This
Prospectus and the documents incorporated by reference herein contain forward looking-information and "forward-looking statements" within the meaning of Canadian and
United States securities laws, including the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements that are predictive in nature, depend
upon or refer to future events or conditions, including, but not limited to, statements that reflect management's expectations regarding the offering and the anticipated use of proceeds thereof, and
the operations, business, financial condition, expected financial results, performance, prospects, opportunities, priorities, targets, goals, ongoing objectives, strategies and outlook of Brookfield,
as well as the outlook for North American and international economies for the current fiscal year and subsequent periods.
The
words "expects," "anticipates," "plans," "believes," "estimates," "seeks," "intends," "targets," "projects," "forecasts" or negative versions thereof and other similar expressions,
or future or conditional verbs such as "may," "will," "should," "would" and "could", which are predictions of or indicate future events, trends or prospects, and which do not relate to historical
matters, identify forward-looking statements. Although Brookfield believes that the anticipated future results, performance or achievements expressed or implied by the forward-looking statements and
information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information. The forward-looking statements and
information involve known and unknown risks, uncertainties and other factors, many of which are beyond Brookfield's control, which may cause the actual results, performance or achievements of
Brookfield to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements and information.
Factors
that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include, but are not limited to: (i) investment
returns that are lower than target; (ii) the impact or unanticipated impact of general economic, political and market factors in the countries in which we do business, including as a result of
COVID-19 and the related global economic shutdown; (iii) the behavior of financial markets, including fluctuations in interest and foreign exchange rates; (iv) global equity and capital
markets and the availability of equity and debt financing and refinancing within these markets; (v) strategic actions including dispositions; (vi) the ability to complete and effectively
integrate acquisitions into existing operations and the ability to attain expected benefits; (vii) changes in accounting policies and methods used to report financial condition (including
uncertainties associated with critical accounting assumptions and estimates); (viii) the ability to appropriately manage human capital; (ix) the effect of applying future accounting
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changes;
(x) business competition; (xi) operational and reputational risks; (xii) technological change; (xiii) changes in government regulation and legislation within the
countries in which we operate; (xiv) governmental investigations; (xv) litigation; (xvi) changes in tax laws; (xvii) ability to collect amounts owed;
(xviii) catastrophic events, such as earthquakes, hurricanes, and pandemics/epidemics; (xix) the possible impact of international conflicts and other developments including terrorist
acts and cyberterrorism; (xx) the introduction, withdrawal, success and timing of business initiatives and strategies; (xxi) the failure of effective disclosure controls and procedures
and internal controls over financial reporting and other risks; (xxii) health, safety and environmental risks; (xxiii) the maintenance of adequate insurance coverage; (xxiv) the
existence of information barriers between certain businesses within our asset management operations; (xxv) risks specific to our business segments, including our real estate, renewable power,
infrastructure, private equity, credit and residential development activities; and (xxvi) other risks and factors detailed in this Prospectus under the heading "Risk Factors" as well as in the
AIF under the heading "Business Environment and Risks" and the MD&A under the heading "Part 6 Business Environment and Risks", each incorporated by
reference in this Prospectus, as well as in other documents filed by Brookfield from time to time with the securities regulators in Canada and the United States.
We
caution that the foregoing list of important factors that may affect future results is not exhaustive. Nonetheless, all of the forward-looking statements contained in this Prospectus
or in documents incorporated by reference herein are qualified by these cautionary statements. When relying on our forward-looking statements, investors and others should carefully consider the
foregoing factors and other uncertainties and
potential events. Except as required by law, Brookfield undertakes no obligation to publicly update or revise any forward-looking statements or information, whether written or oral, that may need to
be updated as a result of new information, future events or otherwise.
CAUTIONARY STATEMENT REGARDING THE USE OF NON-IFRS MEASURES
We disclose a number of financial measures in this Prospectus and the documents incorporated by reference herein that are calculated
and presented using methodologies other than in accordance with IFRS. We utilize these measures in managing the business, including for performance measurement, capital allocation and valuation
purposes, and believe that providing these performance measures on a supplemental basis to our IFRS results is helpful to investors in assessing the overall performance of our businesses. These
financial measures should not be considered as the sole measure of our performance and should not be considered in isolation from, or as a substitute for, similar financial measures calculated in
accordance with IFRS. We caution readers that these non-IFRS financial measures or other financial metrics may differ from the calculations disclosed by other businesses and, as a result, may not be
comparable to similar measures presented by other issuers and entities. Reconciliations of these non-IFRS financial measures to the most directly comparable financial measures calculated and presented
in accordance with IFRS, where applicable, are included in the MD&A, incorporated by reference herein.
PRESENTATION OF FINANCIAL INFORMATION
The Company publishes its consolidated financial statements in United States dollars. In this prospectus supplement, unless otherwise specified or where
the context otherwise requires, all dollar amounts are expressed in United States dollars and references to "US$" and "$" are to United States dollars and references to "Cdn$" are to
Canadian dollars.
The
Company presents its financial statements in accordance with IFRS.
EXCHANGE RATE DATA
The
following table sets forth, for each period indicated, the low and high exchange rates for Canadian dollars expressed in United States dollars, the exchange rate at the end of
such period and the average of such
S-3
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exchange
rates for each day during such period, based on the rate of exchange as reported by the Bank of Canada for the conversion of Canadian dollars into United States dollars:
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Year Ended
December 31,
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2020
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Low
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0.6898
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High
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0.7863
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Period End
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0.7854
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Average
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0.7461
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On ,
2021, the buying rate (as reported by the Bank of Canada) was Cdn$1.00 = US$ .
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Table of Contents
SUMMARY
The Company
Brookfield is a leading global alternative asset manager with US$600 billion in assets under management across real estate,
infrastructure, renewable power, private equity and credit. Brookfield owns and operates long-life assets and businesses, many of which form the backbone of the global economy. Utilizing its global
reach, access to large-scale capital and operational expertise, Brookfield offers a range of alternative investment products to investors around the
world including public and private pension plans, endowments and foundations, sovereign wealth funds, financial institutions,
insurance companies and private wealth investors. The Company's Class A Limited Voting Shares (the "Class A Shares") are listed on
the New York Stock Exchange ("NYSE") and the Toronto Stock Exchange ("TSX") under the symbols
"BAM" and "BAM.A", respectively.
Brookfield Finance Inc.
BFI was incorporated on March 31, 2015 under the Business Corporations Act
(Ontario) and is an indirect wholly-owned subsidiary of the Company. On June 2, 2016, BFI issued US$500 million principal amount of 4.250% notes due June 2, 2026
(the "2026 notes") at a price of 99.036% of their principal amount. On September 14, 2017, BFI issued $550 million principal amount
of 4.700% notes due September 20, 2047 (the "original 2047 notes") at a price of 99.219% of their principal amount. On January 17,
2018, BFI issued (i) $650 million principal amount of 3.900% notes due January 25, 2028 (the "2028 notes") at a price of
99.654% of their principal amount and (ii) an additional $350 million principal amount of 4.700% notes due September 20, 2047 on substantially the same terms as the original 2047
notes (the "additional 2047 notes") at a price of 101.963% of their principal amount. On December 31, 2018, as part of an internal
reorganization, US$750 million principal amount of 4.000% notes due April 1, 2024 (the "2024 notes") issued by Brookfield
Finance LLC ("BFL") on March 10, 2017 at a price of 99.742% of their principal amount were transferred to BFI. BFI will make all payments
on the 2024 notes, including accrued and unpaid interest after December 31, 2018. On January 29, 2019, BFI issued $1 billion principal amount of 4.850% notes due March 29,
2029 at a price of 99.821% of their principal amount (the "2029 notes"). On April 9, 2020, BFI issued $600 million principal amount
of 4.350% notes due April 15, 2030 (the "original 2030 notes") at a price of 99.903% of their principal amount. On April 14, 2020,
BFI issued an additional $150 million principal amount of 4.350% notes due April 15, 2030 on substantially the same terms as the original 2030 notes
(the "additional 2030 notes") at a price of 99.878% of their principal amount. On September 28, 2020, BFI issued $500 million
principal amount of 3.500% notes due March 30, 2051 (the "2051 notes") at a price of 99.313% of their principal amount. On
October 16, 2020, BFI issued $400 million principal amount of 4.625% subordinated notes due October 16, 2080 (the "2080
notes", together with the 2026 notes, the original 2047 notes, the 2028 notes, the additional 2047 notes, the 2024 notes, the 2029 notes, the original 2030 notes, the
additional 2030 notes and the 2051 notes, the "existing notes") at a price of 100% of their principal amount. The existing notes are fully and
unconditionally guaranteed by the Company. BFI has not issued or become an obligor under any other debt securities since its inception.
Recent Developments
On March 31, 2021, the Company entered into an arrangement agreement (the "Arrangement
Agreement") with Brookfield Property Partners L.P. ("BPY") pursuant to which, subject to the terms and conditions of the
Arrangement Agreement, the Company has agreed to acquire all of the outstanding limited partnership units of BPY ("BPY units"), to be completed by way
of an Ontario court-approved plan of arrangement (the "Arrangement") at a value of $18.17 per BPY unit, representing total consideration of
$6.5 billion payable to BPY unitholders other than Brookfield and its affiliates ("public unitholders"). The Arrangement Agreement provides that
each BPY unitholder will have the ability to elect to receive, per BPY unit, $18.17 in cash, 0.3979 of a Class A Share, or 0.7268 of a BPY preferred unit, in each case subject
to pro-ration.
The
Arrangement is subject to, among other things, approval by BPY unitholders representing a majority of BPY units held by public unitholders, in addition to other customary closing
conditions including the approval of the Ontario Superior Court of Justice. There can be no assurance that public unitholders will approve any transaction, that the other conditions to the Arrangement
will be satisfied or satisfied on the anticipated schedule or that the Arrangement will be completed. Subject to the receipt of public unitholder approval and the satisfaction of all closing
conditions, the Arrangement is expected to close in the third quarter of 2021.
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The Offering
The following is a brief summary of the terms of this offering. For a more complete description of the terms of
the notes, see "Description of the Notes" in this prospectus supplement and "Description of Debt Securities" in the accompanying base shelf prospectus.
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Issuer
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Brookfield Finance Inc.
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Guarantor
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Brookfield Asset Management Inc.
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Guarantee
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The notes will be fully and unconditionally guaranteed as to payment of principal, premium (if any) and interest and
certain other amounts by Brookfield Asset Management Inc.
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Guarantor's Ticker
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BAMACN
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Securities Offered
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US$ principal amount
of % notes due , 2031.
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Format
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SEC registered.
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Issue and Delivery Date
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, 2021.
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Maturity Date
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, 2031.
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Interest Rate
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% per annum.
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Yield
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% per annum if held to maturity.
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Interest Payment Dates
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and of each year, beginning
on , 2021.
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CUSIP/ISIN
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/ .
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Rank
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The notes will rank equally with any existing and any future unsecured, unsubordinated obligations of BFI. BFI has not issued or
become an obligor under any debt securities since its inception other than the existing notes. The notes will be fully and unconditionally guaranteed by the Company and such guarantee will rank equally with the Company's other unsecured,
unsubordinated obligations and will effectively be subordinated to all existing and future liabilities of the Company's subsidiaries (other than BFI, to the extent of any of its indebtedness that is guaranteed by the Company on parity with the
Company's guarantee of the notes offered hereby).
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Redemption
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The notes are redeemable, at any time at BFI's option, at the redemption prices set forth under the heading "Description of the
Notes Redemption and Repurchase". The notes are also redeemable in the event of certain changes affecting Canadian withholding tax, as more fully described under "Description of the Notes Redemption for Changes in
Canadian Withholding Taxes".
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Further Issues
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BFI may from time to time, without the consent of the holders of the notes but with the consent of the Company, create and issue
further notes having the same terms and conditions in all respects as the notes being offered hereby, except for the issue date, the issue price and the first payment of interest thereon. Additional notes issued in this manner will be consolidated
with and will form a single series with the notes being offered hereby; provided that if such additional notes are not fungible with the original notes offered hereby for U.S. federal income
tax purposes, then such additional notes will be issued with a separate CUSIP or ISIN number so that they are distinguishable from the original notes.
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Use of Proceeds
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Brookfield intends to allocate an amount equal to the net proceeds from the sale of the notes to the financing and/or refinancing of recently
completed and future Eligible Green Projects, including the development and redevelopment of such projects. Pending such allocation, the net proceeds will be temporarily used for general corporate purposes, including the early redemption of all or a
portion of the outstanding Cdn$600 million principal amount of 4.54% notes due March 31, 2023 issued by the Company (the "2023 notes"). See "Use of Proceeds".
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Form and Denominations
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The notes will be represented by one or more fully-registered global securities registered in the name of a nominee of The
Depository Trust Company. Beneficial interests in those fully-registered global securities will be in initial denominations of US$2,000 and subsequent multiples of US$1,000. Except as described under "Description of the Notes" in this prospectus
supplement and "Description of Debt Securities" in the accompanying base shelf prospectus, notes in definitive form will not be issued.
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Change of Control
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BFI will be required to make an offer to purchase the notes at a price equal to 101% of their principal amount, plus accrued and
unpaid interest to the date of repurchase upon the occurrence of a Change of Control Triggering Event. See "Description of the Notes Change of Control".
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Certain Covenants
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The Indenture (as defined herein) governing the notes contains covenants that, among other things, restrict the ability of
the Company and/or BFI to:
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create certain liens;
and
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consolidate, merge with a
third party or transfer all or substantially all of its assets.
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These covenants are subject to important exceptions and qualifications which are described under "Description of Debt
Securities" in the accompanying base shelf prospectus and "Description of Notes" in this prospectus supplement.
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Risk Factors
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Investment in the notes involves certain risks. You should carefully consider the information in the "Risk Factors" section of
this prospectus supplement and all other information included in this Prospectus and the documents incorporated by reference in this Prospectus before investing in the notes.
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Governing Law
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New York
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RISK FACTORS
An investment in the notes is subject to a number of risks. Before deciding whether to invest in the notes, investors should consider
carefully the risks set forth below and in the information incorporated by reference in this Prospectus. Specific reference is made to the section entitled
"Part 6 Business Environment and Risks" in the MD&A and the section entitled "Business Environment and Risks" in the AIF, each of which are incorporated
by reference in this prospectus supplement.
The notes are unsecured and will rank equal in right of payment to BFI's existing and future unsecured, unsubordinated indebtedness, and will be effectively subordinated to
any of BFI's future secured indebtedness.
The notes will not be secured by any assets of the Company or BFI. Therefore, holders of secured indebtedness of the Company or BFI
would have a claim on the assets securing such indebtedness that effectively ranks prior to the claim of holders of the notes and would have a claim that ranks equal with the claim of holders of notes
to the extent that such security did not satisfy the secured indebtedness. Furthermore, although covenants given by the Company in various agreements may restrict incurring secured indebtedness, such
indebtedness may, subject to certain conditions, be incurred.
The
notes will rank equal in right of payment to BFI's existing and future unsecured, unsubordinated indebtedness. BFI has issued or became an obligor under (as the case may be)
the existing notes, which are in an aggregate principal amount of US$5,050 million, excluding the subordinated 2080 notes, and will rank equally to the notes offered hereby. In addition, the
notes will be effectively subordinated in right of payment to any of BFI's future secured indebtedness, to the extent of the value of the assets securing such indebtedness. BFI will not be restricted
in its ability to make investments or incur debt.
The
Guarantee Obligations (as defined below) are unsecured and effectively subordinated in right of payment to all of the Company's existing and future secured indebtedness, to
the extent of the value of the assets securing such indebtedness. The indenture for the notes does not restrict the Company's or BFI's ability to incur additional indebtedness, including secured
indebtedness generally, which would have a prior claim on the assets securing that indebtedness. In the event of insolvency, bankruptcy, liquidation, reorganization, dissolution or winding up of the
Company or BFI, their respective assets that serve as collateral for any secured indebtedness would be made available to satisfy their respective obligations to secured creditors before any payments
are made on the notes or the Guarantee Obligations. See "Description of the Notes General".
BFI's reliance on the Company.
BFI may not have assets, property or operations other than the Debt Securities it issues and the investments it makes with the net
proceeds of such Debt Securities. BFI is not and will not be restricted in its ability to make investments or incur debt. The holders of the notes are relying principally on the full and unconditional
guarantee of the notes provided by the Company and the financial position and creditworthiness of the Company in order to receive the repayment of the interest and other amounts owing under and in
respect of the notes. The financial position and creditworthiness of the Company is subject to the risks noted in this Prospectus and in the documents incorporated by reference into this Prospectus.
The Guarantee Obligations are effectively subordinated to all liabilities of the Company's subsidiaries other than BFI.
None of the Company's subsidiaries has guaranteed or otherwise become obligated with respect to the notes, other than BFI. Accordingly,
the Company's right to receive assets from any of its subsidiaries upon such subsidiary's bankruptcy, liquidation or reorganization and the right of holders of the notes to participate in those
assets, is effectively subordinated to claims of that subsidiary's creditors, including trade creditors.
The Company's reliance on its subsidiaries.
The Company conducts a significant amount of its operations through subsidiaries. Although the notes are senior obligations of the
Company (pursuant to its guarantee), they are effectively subordinated to all existing and future liabilities of the Company's consolidated subsidiaries (other than BFI, to the extent of any of its
indebtedness that is guaranteed by the Company on parity with the Company's guarantee of the notes offered
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hereby)
and operating companies. The Indenture does not restrict the ability of the Company's subsidiaries (including BFI) to incur additional indebtedness. As the Company conducts a significant
amount of its operations through subsidiaries, the Company's ability to pay the indebtedness owing by it under or in respect of the guarantee of the notes is dependent on dividends and other
distributions it receives from subsidiaries and major investments. Certain of the instruments governing the indebtedness of the companies in which the Company has an investment may restrict the
ability of such companies to pay dividends or make other payments on investments under certain circumstances.
Foreign currency risks.
The notes are denominated in United States dollars. Securities denominated or payable in foreign currencies may entail
significant risks, and the extent and nature of such risks change continuously. These risks include, without limitation, the possibility of significant fluctuations in the foreign currency market, the
imposition or modification of foreign exchange controls and potential illiquidity in the secondary market. These risks will vary depending on the currency or currencies involved. Prospective
purchasers should consult their own financial and legal advisors as to the risks entailed in an investment in the notes. The notes may not be an appropriate investment for investors who are
unsophisticated with respect to foreign currency transactions.
Interest rate risks.
Prevailing interest rates may affect the market price or value of the notes. The market price or value of the notes may decline as
prevailing interest rates for comparable debt instruments rise, and increase as prevailing interest rates for comparable debt instruments decline.
The notes may be redeemed at any time at BFI's option.
BFI may choose to redeem the notes from time to time, especially when prevailing interest rates are lower than the rate borne by the
notes. If prevailing rates are lower at the time of redemption, a purchaser would not be able to reinvest the redemption proceeds in a comparable security at an effective interest rate as high as the
interest rate on the notes being redeemed. BFI's redemption right also may adversely impact a purchaser's ability to sell notes as the optional redemption date or period approaches and/or may
adversely impact the price at which notes can be sold.
The notes may not be a suitable investment for all investors seeking exposure to green assets.
We intend to allocate an amount equal to the net proceeds from the sale of the notes to the financing and/or refinancing of recently
completed and future Eligible Green Projects, including the development and redevelopment of such projects. However, we will retain broad discretion over the use or allocation of the net proceeds from
the sale of the notes and you may not agree with the ultimate use or allocation of these net proceeds.
Neither
we nor the underwriters can provide any assurance that any Eligible Green Projects will satisfy investor criteria and expectations regarding environmental impact and
sustainability performance. In particular, no assurance is given that the use or allocation of such proceeds for any Eligible Green Projects will satisfy, whether in whole or in part, any present or
future investor expectations or requirements regarding any investment criteria or guidelines with which such investor or its investments are required to comply, whether by any present or future
applicable laws or regulations or by its own bylaws or other governing rules or investment portfolio mandates (in particular with regard to any direct or indirect environmental, sustainability
or social impact of any projects or uses, which are the subject of or related to, the relevant Eligible Green Projects). Adverse environmental or social impacts may occur during the design,
construction and operation of the projects or the projects may become controversial or criticized by activist groups or other stakeholders. In addition, although we intend to limit the use or
allocation of the net proceeds from this offering to Eligible Green Projects, there can be no assurance that one or more Eligible Green Projects that we expect will receive certification, including
LEED, NABERS, BREEAM, IREM (as each is defined herein) or equivalent certifications in respect of development, redevelopment or tenant improvement projects, will actually receive such certification.
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In
addition, we have agreed to certain use of proceeds and reporting requirements as described in "Use of Proceeds"; however, we are not
obligated to comply with such requirements under the terms of the notes.
Changes in our credit ratings may adversely affect the value of the notes.
Our long-term debt is subject to periodic review by independent credit rating agencies. Such ratings are limited in scope, and do not
address all material risks relating to an investment in the notes, but rather reflect only the view of each rating agency at the time the rating is issued. Ratings of the notes are not recommendations
to buy, sell or hold the notes. An explanation of the significance of such rating may be obtained from such rating agency. There can be no assurance that such credit ratings will remain in effect for
any given period of time or that such ratings will not be lowered, suspended or withdrawn entirely by the rating agencies, if, in each rating agency's judgment, circumstances so warrant. Actual or
anticipated changes or downgrades in our credit ratings, including any announcement that our ratings are under further review for a downgrade, are likely to adversely affect the market value of the
notes and could increase our corporate borrowing costs. In this circumstance, no person or entity is obliged to provide any additional support or credit enhancement with respect to the notes.
There is no existing trading market for the notes.
The notes will be a new issue of securities with no established trading market. The notes are not and will not be listed on a
securities exchange or quotation system and consequently there is no market through which the notes may be sold and purchasers may not be able to resell the notes purchased under this Prospectus.
Future trading prices of the notes will depend on many factors, including but not limited to prevailing interest rates, our financial condition and results of operations, the then-current ratings
assigned to the notes and the market for similar securities. Any trading market that develops would be affected by many factors independent of and in addition to the foregoing,
including:
-
-
time remaining to the maturity of the notes;
-
-
outstanding amount of the notes;
-
-
the terms related to the optional redemption of the notes; and
-
-
level, direction and volatility of market interest rates generally.
There
can be no assurance that an active trading market will develop for the notes after the offering or, if developed, that such market will be sustained. This may affect the pricing of the notes in
the secondary market, the transparency and availability of trading prices, the liquidity of the notes and the extent of issuer regulation.
BFI may be unable to repurchase the notes upon a Change of Control Triggering Event.
Upon the occurrence of a Change of Control Triggering Event with respect to the notes, subject to certain conditions, BFI will be
required to make an offer to repurchase all outstanding notes at 101% of their principal amount, plus accrued and unpaid interest. See "Description of the
Notes Change of Control" in this prospectus supplement. The source of funds for such a repurchase will be our available cash or cash generated from our
subsidiaries' operations or other potential sources, including borrowings, sales of assets or sales of equity. We cannot assure you that sufficient funds from such sources will be available at the
time of any Change of Control Triggering Event to make required repurchases of notes tendered. In addition, the terms of certain of our other existing indebtedness provide that certain change of
control events will require us to make an offer to repurchase such outstanding indebtedness. Our future debt instruments may contain similar provisions. It is possible that we will not have sufficient
funds at the time of the Change of Control Triggering Event to complete the required repurchase of the notes and, if applicable, our other indebtedness.
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USE OF PROCEEDS
The net proceeds from this offering, after deducting the underwriters' fees and the estimated expenses of the offering of
US$ , will be US$ .
Brookfield
intends to allocate an amount equal to the net proceeds from the sale of the notes to the financing and/or refinancing of recently completed and future Eligible Green
Projects, including the development and redevelopment of such projects. Pending such allocation, the net proceeds will be temporarily used for general corporate purposes, including the early
redemption of all or a portion of the outstanding 2023 notes.
"Eligible Green Projects" will generally fall into the categories outlined in the table below.
|
|
|
|
|
Area
|
|
Eligible Categories
|
Green Buildings
|
|
(i)
|
|
New class A development properties that have received or are expected to receive LEED Silver(1) or higher, NABERS(2), BREEAM(3), IREM(4) or equivalent
certification;
|
|
|
(ii)
|
|
Existing class A redevelopment properties that have received or are expected to receive LEED, NABERS, BREEAM
or equivalent certification;
|
|
|
(iii)
|
|
Tenant improvements that have received or are expected to receive LEED, NABERS, BREEAM or equivalent
certification; and
|
|
|
(iv)
|
|
Other projects that materially improve the health and safety of occupants or the energy efficiency of, or make
other environmentally beneficial improvements to, a development, redevelopment or existing property, such as smart meters in residential buildings.
|
Renewable Energy
|
|
(i)
|
|
Construction of new solar energy facilities, maintenance, refurbishment or repowering of existing solar energy
facilities and acquisition of solar energy facilities or businesses;
|
|
|
(ii)
|
|
Construction of new wind energy facilities, maintenance, refurbishment or repowering of existing wind energy
facilities and acquisition of wind energy facilities or businesses;
|
|
|
(iii)
|
|
Construction of new run-of-river and other hydroelectricity facilities, refurbishment, modernization, and/or
maintenance of existing hydroelectricity facilities with the purpose of increasing generation efficiency, operational lifespan and/or renewable energy output while maintaining or improving the level of operational safety and acquisition of
hydroelectricity facilities or businesses, including pumped storage assets;
|
|
|
(iv)
|
|
Construction of new biomass facilities(5), maintenance, refurbishment or repowering of existing
biomass facilities and acquisition of biomass facilities or businesses;
|
|
|
(v)
|
|
The purchase of renewable energy pursuant to power purchase agreements or virtual power purchase
agreements;
|
|
|
(vi)
|
|
Expenditures and/or investments related to the transmission or distribution of renewable energy sources;
and
|
|
|
(vii)
|
|
Projects that increase the consumption of (or transition to) renewable energy sources.
|
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|
|
|
|
|
Area
|
|
Eligible Categories
|
Energy Efficiency
|
|
(i)
|
|
Climate change and eco-efficient products, production technologies and processes and energy storage technologies or assets, such
as battery storage assets to solve intermittency, residential battery solutions, waste to energy generation;
|
|
|
(ii)
|
|
Expenditures related to the development or provision of intelligent energy systems or other energy efficiency
improvements, such as technology or "smart" systems that are proven to contribute to reduced energy consumption or mitigate greenhouse gas emissions; and
|
|
|
(iii)
|
|
Expenditures related to data infrastructure initiatives, including network or data transmission and storage
infrastructure, that are proven to contribute to reduced energy consumption and/or increased energy efficiency.
|
Sustainable Water and Waste Management
|
|
(i)
|
|
Investments related to the development of sustainable infrastructure for the production, treatment or
distribution of clean and/or drinking water or the collection and treatment of sewage.
|
Pollution Prevention, Energy Efficiency, and Climate Change Adaption
|
|
(i)
|
|
Investment in, acquisition of or partnership with heavy-emissions companies to facilitate transition towards
"net-zero" through, among other things, upgrading infrastructure and/or technology, or improving operations, to reduce energy consumption and carbon footprint; and
|
|
|
(ii)
|
|
Investments related to the development of Waste to Energy generation assets.
|
Clean Transportation
|
|
(i)
|
|
Investments related to the reduction in locomotive emissions; and
|
|
|
(ii)
|
|
Expenditures related to design, build, recover and reuse of advanced battery technologies for
vehicles.
|
Eco-efficient and/or circular economy adapted products
|
|
(i)
|
|
Investments in resource-efficient packaging and distribution.
|
-
(1)
Leadership
in Energy and Environmental Design ("LEED") is a voluntary, third party building certification
process developed by the U.S. Green Building Council ("USGBC"), a non-profit organization. The USGBC developed the LEED certification process to
(i) evaluate the environmental performance from a whole building perspective over a building's life cycle, (ii) provide a definitive standard for what constitutes a "green building,"
(iii) enhance environmental awareness among architects and building contractors, and (iv) encourage the design and construction of energy efficient, water conserving buildings that use
sustainable or green resources and materials.
(2)
National
Australian Built Environment Rating System ("NABERS") is Australia's leading building performance
rating that can be used to measure a building's energy efficiency, carbon emissions, as well as the water consumed, the waste produced and compare it to similar buildings.
(3)
BREEAM,
which is published by Building Research Establishment Ltd., is an international scheme that provides independent third-party certification of
the assessment of the sustainability performance of individual buildings, communities and infrastructure projects. Assessment and certification can take place at a number of stages in the built
environment life cycle, from design and construction through to operation and refurbishment. In the case of BREEAM, third party certification involves the
checking by impartial experts of the assessment of a building or project by a qualified and licensed BREEAM assessor to
ensure that it meets the quality and performance standards of the scheme.
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-
(4)
-
Institute
of Real Estate Management ("IREM") is an international certification body which provides independent
certifications for existing office, medical office, multifamily, senior housing, and retail properties. Properties are rated on a variety of key environmental and sustainability metrics covering
building management, energy and water usage, recycling, and sustainable sourcing policies.
-
(5)
-
Biomass
generation feedstock will be limited to sources that do not deplete existing terrestrial carbon pools, such as agricultural or forestry residue.
Process for Project Evaluation and Selection
Our Capital Markets and Treasury ("CMT") team will be responsible for determining if an
investment is an Eligible Green Project. The CMT team will verify the suitability and eligibility of such investments in collaboration with internal experts and stakeholders, including our in-house
sustainability team and affiliates of the Company.
Eligibility
of investments will be evaluated based on several criteria, such as financial, technical/operating, market, legal and environmental, social and governance risks. In addition,
our Code of Business Conduct and Ethics sets forth principles to guide behavior and standards that must be adhered to.
Management of Proceeds of the Offering
The net proceeds of the sale of the notes will be deposited into a general account and an amount equal to the net proceeds will be
earmarked for allocation to Eligible Green Projects. The Company has established a register to record on an ongoing basis the allocation of the net proceeds to investments in Eligible
Green Projects.
Reporting
The Company will provide annual updates to investors on its website or in its management's discussion and analysis, which will contain
information on its green bond program, including amounts allocated to Eligible Green Projects and the balance of unallocated proceeds. Where feasible, the Company will incorporate the allocation of
proceeds by eligible category and provide examples of investments being financed with green bonds proceeds until all such proceeds have been allocated. Where feasible, the annual updates will include
qualitative and quantitative impact indicators. The annual updates will be accompanied by a report from an independent accountant. The information found on, or accessible
through, the Company's website is not incorporated into and does not form a part of this Prospectus Supplement.
Green Bond Principles, 2018
The Green Bond Principles are a set of voluntary guidelines for the issuance of green securities developed by a committee made up of
issuers, investors and intermediaries in the green finance market and are intended to promote integrity in the green finance market through guidelines that recommend transparency, disclosure and
reporting. We are in alignment with the four core components of the Green Bond Principles as administered by the International Capital Markets Association (ICMA). The Green Bond Principles, 2018 have
four components: (i) use of proceeds (ii) process for project evaluation and selection, (iii) management of proceeds, and (iv) reporting on the use of proceeds.
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EARNINGS COVERAGE RATIOS OF THE COMPANY
The Company's borrowing cost requirements for the 12-month period ended December 31, 2020 amounted to
US$ million, after giving effect to (i) the issuance of the notes, (ii) the redemption of
Cdn$ million principal amount of the 2023 notes,
(iii) the issuance by Brookfield Finance I (UK) plc of $200 million principal amount of 4.50% perpetual subordinated notes, (iv) the issuance of the 2080 notes,
(v) the issuance of the 2051 notes, (vi) the issuance of the original 2030 notes and the additional 2030 notes, (vii) the issuance by BFL of $600 million principal amount
of 3.450% notes due April 15, 2050 and (viii) the redemption of Cdn$350 million principal amount of the Company's 5.30% notes due March 1, 2021, as if each such issuance or
redemption had occurred on January 1, 2020 (collectively, the "Adjustments"). Net income attributable to shareholders before borrowing costs and income taxes for the 12 month period
ended December 31, 2020 was US$ million which is approximately times the
Company's borrowing cost requirements for the period, after giving effect to the
Adjustments.
The
earnings coverage ratio set forth above was calculated based on financial information prepared in accordance with IFRS.
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CONSOLIDATED CAPITALIZATION OF THE COMPANY
The following table sets forth the consolidated capitalization of the Company (i) as at December 31, 2020 and
(ii) as at December 31, 2020 as adjusted to give effect to (a) the issuance of the notes hereunder and (b) the redemption of Cdn$ million principal amount of
the 2023 notes. For further disclosures in respect of consolidated capitalization, please see the Company's audited comparative consolidated financial statements and notes thereto for the fiscal year
ended December 31, 2020, which are incorporated by reference in this Prospectus.
|
|
|
|
|
|
|
|
|
|
As at December 31, 2020
|
|
|
|
Actual
|
|
As adjusted
|
|
|
|
(US$ amounts in millions)
|
|
Corporate borrowings
|
|
$
|
9,077
|
|
$
|
|
|
Non-recourse borrowings
|
|
|
|
|
|
|
|
Property-specific mortgages
|
|
|
128,556
|
|
|
128,556
|
|
Subsidiary borrowings
|
|
|
10,768
|
|
|
10,768
|
|
Accounts payable and other
|
|
|
50,682
|
|
|
50,682
|
|
Liabilities associated with assets classified as held for sale
|
|
|
2,359
|
|
|
2,359
|
|
Deferred income tax liabilities
|
|
|
15,913
|
|
|
15,913
|
|
Subsidiary equity obligations
|
|
|
3,699
|
|
|
3,699
|
|
Equity
|
|
|
|
|
|
|
|
Non-controlling interests
|
|
|
86,804
|
|
|
86,804
|
|
Preferred equity
|
|
|
4,145
|
|
|
4,145
|
|
Common equity
|
|
|
31,693
|
|
|
31,693
|
|
|
|
|
|
|
|
Total capitalization
|
|
$
|
343,696
|
|
$
|
|
|
|
|
|
|
|
|
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Table of Contents
DESCRIPTION OF THE NOTES
The following description of the particular terms and provisions of the notes supplements and, to the extent
inconsistent therewith, replaces, the description of the Debt Securities set forth in the accompanying base shelf prospectus under "Description of Debt Securities", to which reference is hereby made.
Other capitalized terms used and not defined in this prospectus supplement have the meanings ascribed to them in the accompanying base shelf prospectus or in the Indenture (as defined
herein).
The
notes will be issued as a separate series of debt securities under a seventh supplemental indenture to be dated as of the date of the issuance of the notes
(the "Seventh Supplemental Indenture") to the base indenture dated as of June 2, 2016 (the "Base
Indenture" and, together with the Seventh Supplemental Indenture, the "Indenture"), between BFI, the Company, as guarantor, and
Computershare Trust Company
of Canada, as trustee (the "Trustee"). For a description of the rights attaching to different series of Debt Securities under the Indenture, see
"Description of Debt Securities" in the accompanying base shelf prospectus. The Indenture is subject to the provisions of the Business Corporations Act
(Ontario). The following statements relating to the notes and the Indenture are summaries and should be read in conjunction with the statements under "Description of Debt Securities" in the
accompanying base shelf prospectus. Such information does not purport to be complete and is qualified in its entirety by reference to all of the provisions of the notes and the Indenture, including
the definition of certain terms therein. It is the Indenture, and not these statements, that governs the rights of holders of the notes.
General
The notes will be senior unsecured obligations of BFI and will initially be limited to US$ aggregate principal
amount,
all of which will be issued under the Seventh Supplemental Indenture. The notes will mature on , 2031. The
notes will bear interest at the rate of % per annum from
, 2021, or from the most recent interest payment date to which interest has been paid or provided for,
payable semi-annually in arrears on and of each
year, commencing on , 2021, to the Persons in whose name the notes are registered at the close of business
on the preceding or , as the case may be. The
notes will bear interest on overdue principal and premium, if any, and, to the extent permitted by law, overdue interest at % per annum plus 1%.
The
notes will be fully and unconditionally guaranteed by the Company.
Interest
on the notes will be computed on the basis of a 360-day year of twelve 30-day months. In any case where any interest payment date is not a Business Day, payment will be made on
the next succeeding Business Day, whether or not such date is a Business Day in Toronto, Ontario, unless such date is not a Business Day in New York, New York.
"Business Day" means each weekday which is not a day on which banking institutions in the Place of Payment (as defined below) are authorized or
obligated by law or executive order to close.
Computershare
Trust Company, N.A. will initially act as Paying Agent for the notes. Principal of, and premium, if any, and interest on, the notes will be payable at the Place of Payment, provided that at the option
of BFI, payment of interest on the notes may be made by check mailed to the address of the Person entitled thereto as it
appears in the Security Register or by wire transfer to an account maintained by the Person entitled thereto as specified in the Security Register. The notes may be presented for registration of
transfer and exchange at the corporate trust office of the Trustee and the Place of Payment.
The
Company conducts a significant proportion of its operating activities through subsidiaries. Although the Guarantee Obligations (as defined herein) are senior obligations of
the Company, they are effectively subordinated to all existing and future liabilities of the Company's consolidated subsidiaries and operating companies, other than BFI, to the extent of any of its
indebtedness that is guaranteed by the Company on parity with the Company's guarantee of the notes offered hereby. The Indenture does not restrict the ability of the Company's subsidiaries to incur
additional indebtedness. As the Company conducts a significant
proportion of its operating activities through subsidiaries, the Company's ability to service its indebtedness is dependent on dividends and other payments made on its investments. Certain of the
instruments governing the indebtedness of the companies in which the Company has an investment may restrict the ability of such companies to pay dividends or make other payments on investments under
certain circumstances. Dividends paid in kind are
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excluded
so long as they are retained in the same form as received and are legally and beneficially owned by the Company and/or one or more designated Affiliates of the Company.
The
Indenture does not limit the aggregate principal amount of Debt Securities which may be issued thereunder, and Debt Securities may be issued thereunder from time to time in one or
more series up to the aggregate principal amount from time to time authorized by BFI for each series. All Debt Securities issued by BFI will be fully and unconditionally guaranteed by
the Company.
Reopening of the Notes
BFI may from time to time, without the consent of the holders of the notes but with the consent of the Company, create and issue
further notes having the same terms and conditions in all respects as the notes being offered hereby, except for the issue date, the issue price and the first payment of interest thereon. Additional
notes issued in this manner will be consolidated with and will form a single series with the notes being offered hereby; provided that if such
additional notes are not fungible with the original notes offered hereby for U.S. federal income tax purposes, then such additional notes will be issued with a separate CUSIP or ISIN number so
that they are distinguishable from the notes offered hereby.
Redemption and Repurchase
The notes will be redeemable at BFI's option (A) in whole or in part, at any time and from time to time and/or (B) in
whole on or after , 2031 (the date that is three months prior to the maturity date), in each case on
payment of the applicable Redemption Price (as defined herein). If
less than all of the notes are to be redeemed pursuant to (A), the notes so redeemed will be cancelled and will not be re-issued.
In
connection with such optional redemption, the following defined terms apply:
"Adjusted Treasury Rate" means, with respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to
maturity (computed as of the second Business Day immediately preceding that redemption date) of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for that redemption date.
"Comparable Treasury Issue" means the United States Treasury security selected by the Independent Investment Banker that would be
utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of
the notes.
"Comparable Treasury Price" means, with respect to any redemption date, (i) the average of four Reference Treasury Dealer
Quotations for that redemption date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations, or (ii) if the Independent Investment Banker obtains fewer than four
such Reference Treasury Dealer Quotations, the average of all such quotations.
"Independent Investment Banker" means one of the Reference Treasury Dealers appointed by BFI to act as the "Independent Investment
Banker".
"Redemption Price" means in the case of (A) above, the greater of (i) 100% of the principal amount of the notes to be
redeemed, and (ii) the sum of the present values of the Remaining Scheduled Payments discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve
30-day months) at the Adjusted Treasury Rate plus basis points, and in the case of (B) above, 100% of the principal amount of the notes to be redeemed,
together with, in each
case, accrued and unpaid interest on the principal amount of the notes to be redeemed to the date of redemption.
"Reference Treasury Dealer" means each of Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and HSBC Securities
(USA) Inc. and their respective successors, each a recognized investment banking firm that is a primary U.S. Government securities dealer in New York City
(a "Primary Treasury Dealer"); provided, however, that if any of the foregoing shall cease to be
a Primary Treasury Dealer, BFI shall substitute therefor another nationally recognized investment banking firm that is a Primary Treasury Dealer to be a Reference Treasury Dealer.
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"Reference Treasury Dealer Quotations" means, with respect to any redemption date, the average, as determined by the Independent
Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker
by the Reference Treasury Dealers at 3:30 p.m., New York City time, on the third Business Day preceding that redemption date.
"Remaining Scheduled Payments" means, with respect to each note to be redeemed, the remaining scheduled payments of the principal thereof
and interest thereon that would have been due after the related redemption date but for such redemption; provided, however, that, if that redemption
date is not an interest payment date with respect to such note, the amount of the next succeeding scheduled interest payment thereon will be reduced by the amount of interest accrued thereon to that
redemption date.
Notice
of any redemption will be delivered at least 15 days but not more than 60 days before the redemption date to each holder of the notes to be redeemed. On and after
any redemption date, interest will cease to accrue on the notes or any portion thereof called for redemption. On or before any redemption date, BFI shall deposit with the Paying Agent (or the
Trustee) money sufficient to pay the Redemption Price of the notes to be redeemed on such date. If less than all the notes are to be redeemed, the notes to be redeemed shall be selected by the Trustee
at BFI's direction by such method as BFI and the Trustee shall designate. The Redemption Price shall be calculated by the Independent Investment Banker and BFI, the Trustee and any Paying Agent for
the notes shall be entitled to rely on such calculation.
Affiliate Purchase on Maturity
Notwithstanding the other provisions of the Indenture, BFI may, by providing notice to the Trustee at least two Business Days prior to
the Maturity, elect to have one or more Affiliates of BFI or the Company purchase all, but not less than all, of the notes so to be redeemed or repaid at a price equal to the Redemption Price
(excluding accrued and unpaid interest), in the case of notes called for redemption, or the principal amount, in the case of notes coming due at the Stated Maturity (in each case, the
"Repayment Price"); provided that any accrued and unpaid interest thereon will be paid by BFI. Upon
payment therefor of an amount equal to the Repayment Price, and payment by BFI of accrued interest and premium, if any, such notes shall be transferred to such Affiliate in accordance with the
transfer provisions of the Indenture and such notes shall not become due and payable on Maturity, provided that such Affiliate shall not be permitted to vote such notes in any matter unless 100% of
the notes entitled to be voted in respect of such matter are held by BFI, the Company or their Affiliates. Should such Affiliate and BFI, if applicable, fail to make full payment of the Repayment
Price and accrued interest and premium, if any, on Maturity, then such notes shall become due and payable as otherwise provided for in the Indenture.
Change of Control
If a Change of Control Triggering Event occurs, unless BFI has exercised its right to redeem all of the notes as described above, BFI
will be required to make an offer to repurchase all of each holder's notes (or the portion thereof not subject to redemption, if BFI has exercised its right to redeem the notes in part)
pursuant to the offer described below (the "Change of Control Offer") on the terms set forth in the notes. In the Change of Control Offer, BFI
will be required to offer payment in cash equal to 101% of the aggregate principal amount of notes repurchased plus accrued and unpaid interest, if any, on the notes repurchased
(the "Change of Control Payment"), to the date of purchase.
Within
30 days following any Change of Control Triggering Event, BFI will be required to deliver a notice to holders of notes, with a copy to the Trustee, describing the
transaction or transactions that constitute the Change of Control Triggering Event and offering to repurchase the notes on the date specified in the notice, which date will be no earlier than
30 days and no later than 60 days from the date such notice is delivered (the "Change of Control Payment Date"), pursuant to the
procedures required by the notes and described in such notice. BFI must comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the notes as a result of a Change of Control Triggering Event. To the extent that the provisions
of any securities laws or regulations conflict with the Change of Control (as defined herein) provisions of the notes,
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BFI
will be required to comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control provisions of the notes by virtue
of such conflicts.
On
the Change of Control Payment Date, BFI will be required, to the extent lawful, to:
-
-
accept for payment all notes or portions of notes properly tendered pursuant to the Change of Control Offer;
-
-
deposit with the Paying Agent or the Trustee an amount equal to the Change of Control Payment in respect of all notes or
portions of notes properly tendered; and
-
-
deliver or cause to be delivered to the Trustee the notes properly accepted together with an Officers' Certificate stating
the aggregate principal amount of notes or portions of notes being purchased by BFI.
The
Paying Agent will be required to promptly deliver to each holder who properly tendered notes, the purchase price for such notes, and the Trustee will be required to promptly
authenticate and deliver (or cause to be delivered) to each such holder a new note equal in principal amount to any unpurchased portion of the notes surrendered, if any; provided that each new
note will be in a principal amount of US$2,000 or a multiple of US$1,000 in excess thereof.
BFI
will not be required to make a Change of Control Offer upon a Change of Control Triggering Event if another Person makes such an offer in the manner, at the times and otherwise in
compliance with the requirements for an offer made by BFI and such other Person purchases all notes properly tendered and not withdrawn under its offer.
For
purposes of the foregoing discussion of a repurchase at the option of holders, the following definitions are applicable:
"Below Investment Grade Rating Event" means that on any day within the 60-day period (which shall be extended during an Extension Period)
after the earlier of (1) the occurrence of a Change of Control or (2) the first public notice of the occurrence of a Change of Control or the intention by the Company to effect a Change
of Control, the notes are rated below an Investment Grade Rating by at least three out of four of the Rating Agencies if there are four Rating Agencies or all of the Rating Agencies if there are fewer
than four Rating Agencies. Notwithstanding the foregoing, a Below Investment Grade Rating Event otherwise arising by virtue of a particular reduction or reductions in rating shall not be deemed to
have occurred in respect of a particular Change of Control (and thus shall not be deemed a Below Investment Grade Rating Event for purposes of the definition of Change of Control Triggering
Event hereunder) if the Rating Agencies making the reduction(s) in rating to which this definition would otherwise apply do not announce or publicly confirm or inform the Trustee in writing at its
request that the reduction(s) were the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or
not the applicable Change of Control shall have occurred at the time of the ratings event) (the "Change of Control Event"). For the purpose of
this definition, an "Extension Period" shall occur and continue for so long as the aggregate of (i) the number of Rating Agencies that have placed the notes on publicly announced consideration
for possible downgrade during the initial 60-day period as a result, in whole or in part, of the applicable Change of Control Event and (ii) the number of Rating Agencies that have downgraded
the notes to below an Investment Grade Rating as a result, in whole or in part, of the applicable Change of Control Event during either the initial 60-day period or the Extension Period provided for
in clause (i) would be sufficient to result in a Change of Control Triggering Event should one or more of the Rating Agencies that have placed the notes on publicly announced consideration for
possible downgrade subsequently downgrade the notes to below an Investment Grade Rating. The Extension Period shall terminate on the earlier of (A) the date on which the Rating Agencies that
placed the notes on publicly announced consideration for possible downgrade within the initial 60-day period referred to in subclause (i) of this definition make their determinations with
respect to the impact of the Change of Control Event on the rating of the notes, and (B) the date on which two of the Rating Agencies (if there are four Rating Agencies) or one of the
Rating Agencies (if there are fewer than four Rating Agencies) has confirmed
that the notes will not be downgraded or are not subject to consideration for a possible downgrade to below an Investment Grade Rating as a result of the applicable Change of Control Event.
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"Change of Control" means the consummation of any transaction including, without limitation, any merger, amalgamation, arrangement or
consolidation the result of which is that any person or group of related persons, other than any one or more of the Company, the Company's Subsidiaries, the Company's or any of its Subsidiaries'
employee benefit plans, or Management and/or any entity or group of entities controlled by Management (provided that upon the consummation of a transaction by Management and/or an entity or group of
entities controlled by Management, the Company's Class A Shares or other Voting Stock into which the Company's Class A Shares are reclassified, consolidated, exchanged or changed
continue to be listed and posted for trading on a national securities exchange in the United States, Canada or Europe), becomes the beneficial owner (as defined in Rules 13d-3
and 13d-5 under the Exchange Act), directly or indirectly, of (i) more than 50% of the voting power of each class of the Company's Voting Stock (or other Voting Stock into which
the Company's Voting Stock is reclassified, consolidated, exchanged or changed in connection with such transaction) measured by voting power rather than number of shares, or (ii) Voting Stock
sufficient to enable it to elect a majority of the members of the Company's board of directors. For the purposes of this provision, "person" and "group" have the meanings they have in
Sections 13(d) and 14(d) of the Exchange Act.
For
the purposes of the Indenture, a Person will be deemed to be controlled by Management if the individuals comprising Management are the beneficial owners, directly or indirectly, of,
in aggregate, (i) more than 50% of the voting power of such Person's voting stock measured by voting power rather than number of shares or (ii) such Person's voting stock sufficient to
enable them to elect a majority of the members of such Person's board of directors (or similar body).
"Change of Control Triggering Event" means the occurrence of both a Change of Control and a Below Investment Grade Rating Event.
"Investment Grade Rating" means a rating equal to or higher than Baa3 (or the equivalent) by Moody's, BBB-
(or the equivalent) by S&P, BBB- (or the equivalent) by Fitch and BBB(low) (or the equivalent) by DBRS.
"Management" means any one or more of the Company's directors, officers or employees (or directors, officers or employees of any
one or more of the Company's Subsidiaries) immediately prior to the consummation of any transaction that would constitute a Change of Control, acting individually or together.
"Rating Agencies" means (1) each of Moody's, S&P, Fitch and DBRS and (2) if any of the foregoing Rating Agencies ceases to
rate the notes or fails to make a rating of the notes publicly available for reasons outside
of BFI or the Company's control, a "nationally recognized statistical rating organization" within the meaning of Section 3(a)(62) under the Exchange Act, selected by BFI (as certified by
a resolution of the board of directors of BFI) as a replacement agency for Moody's, S&P, Fitch or DBRS, or some or all of them, as the case may be.
"Voting Stock" of any Person means Capital Stock of such Person which ordinarily has voting power for the election of directors
(or persons performing similar functions) of such Person, whether at all times or only so long as no senior class of securities has such voting power by reason of any contingency.
The
failure by BFI to comply with the obligations described under " Change of Control" will constitute an event of default with respect to the notes.
The
Change of Control Triggering Event feature of the notes may in certain circumstances make more difficult or discourage a sale or takeover of the Company and, thus, the removal of
incumbent management. Subject to the limitations discussed below, we could, in the future, enter into certain transactions, including acquisitions, refinancings or other recapitalizations, that would
not constitute a Change of Control under the notes, but that could increase the amount of indebtedness outstanding at such time or otherwise affect our capital structure or credit ratings on the
notes. Restrictions on our ability to incur liens are contained in the covenants as described in this prospectus supplement under
" Covenants Negative Pledge".
Company Additional Amounts
All payments made by BFI or the Company under or with respect to the notes will be made free and clear of, and without withholding or
deduction for or on account of, any present or future tax, duty, levy, impost, assessment or other governmental charge imposed or levied by or on behalf of the Government of Canada or of
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any
province or territory thereof or therein or by any authority or agency therein or thereof having power to tax (hereinafter "Taxes"), unless BFI or
the Company (as applicable) is required to withhold or deduct Taxes by law or by the interpretation or administration thereof. If BFI or the Company is so required to withhold or deduct any
amount for or on account of Taxes from any payment made by it under or with respect to the notes and the notes are not redeemed in accordance with the provisions described under
" Redemption for Changes in Canadian Withholding Taxes", BFI or the Company (as applicable) will pay such additional amounts ("Company
Additional Amounts") as may be necessary so that the net amount received (including Company Additional Amounts) by each Holder (including, as
applicable, the beneficial owners in respect of any such Holder) after such withholding or deduction will not be less than the amount the Holder (including, as applicable, the beneficial owners in
respect of any such Holder) would have received if such Taxes had not been withheld or deducted; provided that no Company Additional Amounts will be payable with respect to: (a) any payment to
a Holder or beneficial owner who is liable for such Taxes in respect of such note (i) by reason of such Holder or beneficial owner, or any other person entitled to payments on the note, being a
person with whom BFI or the Company does not deal at arm's length (within the meaning of the Income Tax Act (Canada)
(the "Tax Act")), (ii) by reason of the existence of any present or former connection between such Holder or beneficial owner
(or between a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of power over, such Holder or beneficial owner, if such Holder or beneficial owner is an estate, trust,
partnership, limited liability company or corporation) and Canada or any province or territory thereof or therein other than the mere ownership, or receiving payments under or enforcing any rights in
respect of such note as a non-resident or deemed non-resident of Canada or any province or territory thereof or therein, or (iii) by reason of such Holder or beneficial owner being a "specified
shareholder" of BFI or not dealing at arm's length with a "specified shareholder" of BFI as defined in subsection 18(5) of the Tax Act or as a consequence of the payment being deemed to
be a dividend pursuant to subsection 214(16) or 214(17) of the Tax Act; (b) any Tax that is levied or collected other than by withholding from payments on or in respect of
the notes; (c) any note presented for payment (where presentation is required) more than 30 days after the later of (i) the date on which such payment first becomes due or
(ii) if the full amount of the monies payable has not been paid to the Holders of the notes on or prior to such date, the date on which the full amount of such monies has been paid to the
Holders of the notes, except to the extent that the Holder of the notes would have been entitled to such Company Additional Amounts on presentation of the same for payment on the last day of such
period of 30 days; (d) any estate, inheritance, gift, sales, transfer, excise or personal property Tax or any similar Tax; (e) any Tax imposed as a result of the failure of a
Holder or beneficial owner to comply with certification, identification, declaration, filing or similar reporting requirements concerning the nationality, residence, identity or connection with Canada
or any province or territory thereof or therein of such Holder or beneficial owner, if such compliance is required by statute or by regulation, as a precondition to reduction of, or exemption, from
such Tax; (f) any (i) withholding or deduction imposed pursuant to Sections 1471 to 1474 of the U.S. Internal Revenue Code of 1986, as amended
("FATCA"), or any successor version thereof, or any similar legislation imposed by any other governmental authority, or (ii) Tax or penalty
arising from the Holder's or beneficial owner's failure to properly comply with the Holder's or beneficial owner's obligations imposed under the Canada-United States Enhanced Tax Information
Exchange Agreement Implementation Act (Canada) or any treaty, law or regulation or other official guidance enacted by Canada implementing FATCA or an intergovernmental agreement with respect to FATCA
or any similar legislation imposed by any other governmental authority, including, for greater certainty, Part XVIII and Part XIX of the Tax Act; or (g) any combination of
the foregoing clauses (a) to (f).
BFI
or the Company (as applicable) will also (1) make such withholding or deduction and (2) remit the full amount deducted or withheld by it to the relevant
authority in accordance with applicable law. BFI or the Company (as applicable) will furnish to the Holders of the notes, within 30 days after the date the payment of any Taxes by it is
due pursuant to applicable law, certified copies of tax receipts evidencing such payment by it. BFI and the Company will indemnify and hold harmless each Holder (including, as applicable, the
beneficial owners in respect of any such Holder) and, upon written request, will reimburse each such Holder (including, as applicable, the beneficial owners in respect of any such Holder) for the
amount of (i) any Taxes (other than any Taxes for which Company Additional Amounts would not be payable pursuant to clauses (a) through (g) above) levied or imposed and paid by
such Holder (including, as applicable, the beneficial owners in respect of any such Holder) as a result of payments made under or with respect to the notes which have not been withheld or
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deducted
and remitted by BFI or the Company (as applicable) in accordance with applicable law, (ii) any liability (including penalties, interest and expenses) arising therefrom or with
respect thereto, and (iii) any Taxes (other than any Taxes for which Company Additional Amounts would not be payable pursuant to clauses (a) through (g) above) imposed with
respect to any reimbursement under clause (i) or (ii) above, but excluding any such Taxes on such Holder's (including, as applicable, the beneficial owners in respect of any such
Holder's) net income.
Whenever
in the Indenture there is mentioned, in any context, the payment of principal (and premium, if any), Redemption Price, Purchase Price, Change of Control Payment, interest
or any other amount payable under or with respect to any note, such mention shall be deemed to include mention of the payment of Company Additional Amounts to the extent that, in such context, Company
Additional Amounts are, were or would be payable in respect thereof.
Co-Obligors and/or Additional Guarantors
Without the consent of any Holders, BFI, when authorized by a resolution of the board of directors of BFI, the Company and the Trustee,
may enter into an indenture supplemental to the Indenture in respect of the notes, in form satisfactory to the Trustee, for the purpose of adding as a co-obligor (whether as an additional issuer or
guarantor) of the notes, an Affiliate of BFI or the Company (each, a "Co-Obligor"); provided that any such Co-Obligor shall be organized or formed under
the laws of (1) any state of the United States, (2) Canada or any province or territory thereof, (3) the United Kingdom, (4) Australia or (5) any
country that is a member of the European Union. Any such supplemental indenture entered into for the purpose of adding a Co-Obligor formed under any jurisdiction other than a state of the
United States (each, a "Non-U.S. Co-Obligor") shall include a provision for (i) the payment of additional amounts in the form
substantially similar to that described in " Company Additional Amounts", with such modifications as the Company and such Non-U.S. Co-Obligor reasonably determine are
customary and appropriate for U.S. and Canadian bondholders to address then-applicable (or potentially applicable future) taxes, duties, levies, imposts, assessments or other governmental
charges imposed or levied by or on behalf of the applicable governmental authority in respect of payments made by such Non-U.S. Co-Obligor under or with respect to the notes, including any
exceptions thereto as the Company and such Non-U.S. Co-Obligor shall reasonably determine would be customary and appropriate for U.S. and Canadian bondholders and (ii) the right of any
issuer to redeem the notes at 100% of the aggregate principal amount thereof plus accrued interest thereon in the event that additional amounts become payable by a Non-U.S. Co-Obligor in
respect of the notes as a result of any change in law or official position regarding the application or interpretation of any law that is announced or becomes effective after the date of such
supplemental indenture.
Any
such Co-Obligor shall be jointly and severally liable with BFI or the Company (as applicable) to pay the principal, premium, if any, and interest on the notes. BFI would only
add a Co-Obligor if BFI determines that adding a Co-Obligor would not result in a deemed sale or exchange of the notes by any holder for
U.S. federal income tax purposes under applicable Treasury Regulations or a disposition of the notes by any holder for Canadian federal income tax purposes.
Redemption for Changes in Canadian Withholding Taxes
The notes will be subject to redemption as a whole, but not in part, at the option of BFI at any time at 100% of the principal amount,
together with accrued and unpaid interest thereon to the redemption date, in the event BFI shall have received an opinion from independent tax counsel experienced in such matters to the effect that
BFI has become, or would become, obligated to pay, on the next date on which any amount would be payable with respect to the notes, any Additional Amounts (as defined herein) as a result of a
change in the laws of Canada or any political subdivision or taxing authority thereof or therein (including any regulations promulgated thereunder), or any change in any official position regarding
the application or interpretation of such laws or regulations, which change is announced or becomes effective on or after the date of the Seventh Supplemental Indenture.
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Events of Default
Notwithstanding the information contained in the accompanying base shelf prospectus, each of the following will constitute an Event of
Default under the Indenture with respect to the notes: (a) failure to pay principal of, or any premium on, the notes when due; (b) failure to pay any interest on the notes when due,
which failure continues for 30 days; (c) default in the payment of principal and interest on the notes required to be purchased pursuant to an offer to purchase made pursuant to the
terms of the notes; (d) failure to deposit any sinking fund payment, when due, in respect of the notes; (e) failure to perform any other covenant of BFI or the Company in the Indenture
(other than a covenant included in the Indenture solely for the benefit of a series of notes other than the notes offered hereby), which failure continues for 60 days after written notice has
been given by the Trustee or the holders of at least 25% in aggregate principal amount of outstanding notes, as provided in the Indenture; (f) the Company's Guarantee Obligations shall, for any
reason, cease to be, or the Company shall assert in writing to the Trustee or the holders thereof that such guarantee is not in full force and effect and enforceable against the Company in accordance
with its terms; (g) default by the Company in the payment of principal of, premium, if any, or interest on, any obligation for borrowed money indebtedness (other than an obligation payable on
demand or maturing less than 12 months from the creation or issue thereof) in an outstanding principal amount in excess of 5% of Consolidated Net Worth in the aggregate at the time of default,
or any failure in the performance of any other covenant of the Company contained in any instrument under which such obligations are created or issued, provided that in each such case all cure periods
relating to such default have expired and the holders of such borrowed money indebtedness or a trustee for such holders (if any)
declares such indebtedness to be due and payable prior to its stated maturity, and provided further that if any such default is waived at any time by such holders or trustee in accordance with the
terms of such instrument, then the Event of Default under the Indenture shall be deemed to be waived without further action on the part of the Trustee or the holders; (h) certain events of
bankruptcy, insolvency or reorganization affecting the Company or BFI; and (i) the failure by BFI to comply with the obligations described herein under " Change
of Control".
Covenants
The following covenants shall apply to the notes:
Neither BFI, nor the Company will create any Lien (as defined herein) on any of its property or assets to secure any
indebtedness for borrowed money without in any such case effectively providing that the notes, in the case of BFI, and the Guarantee Obligations, in case of the Company (together with, if BFI or the
Company, as applicable, shall so determine, any other indebtedness of BFI or the Company, as applicable, which is not subordinate to the notes or the Guarantee Obligations, as applicable), shall be
secured equally and ratably with (or prior to) such secured indebtedness, so long as such secured indebtedness shall be so secured; provided,
however, that the foregoing restrictions shall not apply to:
-
(a)
-
Liens
on any property or assets existing at the time of acquisition thereof (including acquisition through merger or consolidation) to secure, or securing,
the payment of all or any part of the purchase price, cost of improvement or construction cost thereof or securing any indebtedness incurred prior to, at the time of or within 120 days after,
the acquisition of such property or assets or the completion of any such improvement or construction, whichever is later, for the purpose of financing all or any part of the purchase price, cost of
improvement or construction cost thereof or to secure, or securing, the repayment of money borrowed to pay, in whole or in part, such purchase price, cost of improvement or construction cost or any
vendor's privilege or lien on such property securing all or any part of such purchase price, cost of improvement or construction cost, including title retention agreements and leases in the nature of
title retention agreements (provided such Liens are limited to such property or assets and to improvements on such property);
-
(b)
-
Liens
arising by operation of law;
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-
(c)
-
any
other Lien arising in connection with indebtedness if, after giving effect to such Lien and any other Lien created pursuant to this
paragraph (c), the aggregate principal amount of indebtedness secured thereby would not exceed 5% of Consolidated Net Worth; and
-
(d)
-
any
extension, renewal, substitution or replacement (or successive extensions, renewals, substitutions or replacements), as a whole or in part, of
any of the Liens referred to in paragraphs (a) and (b) above or any indebtedness secured thereby; provided that such extension, renewal,
substitution or replacement Lien shall be limited to all or any part of substantially the same property or assets that secured the Lien extended, renewed, substituted or replaced (plus improvements on
such property) and the principal amount of indebtedness secured by such Lien at such time is not increased.
BFI shall at all times remain a Subsidiary of the Company.
Certain Definitions
Set forth below is a summary of certain of the defined terms used in the Indenture. Reference is made to the Indenture for the full
definition of all defined terms.
"Affiliate" of any Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common
control with such Person. For the purposes of this definition, "control", when used with respect to any Person, means the power to influence the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Capital Stock" of any Person means any and all shares, units, interests, participations or other equivalents (however designated) of
corporate stock or other equity participations, including partnership interests, whether general or limited, of such Person.
"Consolidated Net Worth" means the consolidated equity of the Company and its Subsidiaries determined on a consolidated basis in
accordance with generally accepted accounting principles (including all preferred equity and all equity securities that are classified as liabilities for purposes of generally accepted accounting
principles but are convertible, either at the option of the issuer or the holder of such securities, into equity and are not redeemable at the sole option of the holder for consideration other than
equity), plus, without duplication, Qualifying Subordinated Debt and Deferred Credits.
"Deferred Credits" means the deferred credits of the Company and its Subsidiaries determined on a consolidated basis in accordance with
generally accepted accounting principles.
"Guarantee Obligations" means the guarantee obligations of the Company pursuant to Article 5 of the Indenture but solely in respect
of the notes.
"Holder" means a Person in whose name a note is registered in the security register in respect of the notes.
"Lien" means, with respect to any property or asset, any mortgage, charge, hypothecation, pledge, encumbrance on, or other security
interest in, such property or asset.
"Qualifying Subordinated Debt" means Debt of the Company and its Subsidiaries which by its terms provides that the payment of principal of
(and premium, if any) and interest on and all other payment obligations in respect of such Debt shall be subordinate to the prior payment in full of the Company's obligations in respect of the
notes to at least the extent that no payment of principal of (or premium, if any) or interest on or otherwise due in respect of such Debt may be made for so long as there exists any default in
the payment of principal (or premium, if any) or interest on the notes.
"Subsidiary" of any Person means (i) a corporation 50% or more of the combined voting power of the outstanding Voting Stock of
which is owned, directly or indirectly, by such Person or by one or more other Subsidiaries of such Person or by such Person and one or more Subsidiaries thereof, or (ii) any other Person
(other than a corporation) in which such Person, or one or more other Subsidiaries of such Person or such
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Person
and one or more other Subsidiaries thereof, directly or indirectly, has at least a majority ownership and power to direct the policies, management and affairs thereof.
The Trustee and the Paying Agent
The address of the Trustee is 100 University Avenue, 11th Floor, Toronto, Ontario M5J 2Yl. The
"Place of Payment" for the notes will be at the address of the Paying Agent, currently located at 6200 S. Quebec St., Greenwood Village,
Colorado 80111.
Book-Entry System
Each of the notes will be represented by one or more global notes (collectively, the "Global
Notes") registered in the name of The Depository Trust Company, or its nominee, as Depositary (the "Depositary"). The
provisions set forth under "Description of Debt Securities Registered Global Securities" in the accompanying base shelf prospectus will be applicable to the
notes. Accordingly, beneficial interests in the notes will be shown on, and transfers thereof will be effected only through, records maintained by the Depositary and its Participants
(as defined herein). Except as described under "Description of Debt Securities Registered Global Securities" in the accompanying base shelf prospectus,
owners of beneficial interests in the Global Notes will not be entitled to receive notes in definitive form and will not be considered holders of notes under the Indenture.
The
Depositary has advised BFI, the Company and the underwriters as follows: the Depositary is a limited-purpose trust company organized under the New York Banking Law, a "banking
organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code
and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. The Depositary holds and provides asset servicing for over
3.5 million issues of U.S. and non-U.S. equity, corporate and municipal debt issues, and money market instruments (from over 100 countries) that the Depositary's participants
("Direct Participants") deposit with the Depositary. The Depositary also facilitates the post-trade settlement among Direct Participants of sales and
other securities transactions in deposited securities through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical
movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other
organizations. The Depositary is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company
for the Depositary, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the
users of its regulated subsidiaries. Access to the Depositary's system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and
clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect
Participants", and together with Direct Participant, "Participants"). The Depositary has a Standard & Poor's rating of
AA+. The Depositary's Rules applicable to its Participants are on file with the SEC. More information about the Depositary can be found at www.dtcc.com
and www.dtc.org.
Principal
and interest payments on the notes registered in the name of the Depositary's nominee will be made in immediately available funds to the Depositary's nominee as the registered
owner of the Global Notes. Under the terms of the Indenture, BFI and the Trustee will treat the persons in whose names the notes are registered as the owners of such notes for the purpose of receiving
payment of principal and interest on such notes and for all other purposes whatsoever. Therefore, neither BFI, the Company, the Trustee nor any Paying Agent for the notes has any direct responsibility
or liability for the payment of principal or interest on the notes to owners of beneficial interests in the Global Notes. The Depositary has advised BFI, the Company and the Trustee that its current
practice is, upon receipt of any payment of principal or interest, to credit the accounts of Participants on the payment date with such payment in amounts proportionate to their respective beneficial
interests in the principal amount of the Global Notes as shown in the records of the Depositary, unless the Depositary has reason to believe that it will not receive payment on the payment date.
Payments by Direct Participants and Indirect Participants to owners of beneficial interests in the Global Notes will be governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered in "street name", and will be the responsibility of the Direct Participants or Indirect Participants, and not of the
Depositary, the Trustee, BFI or the Company, subject to any statutory
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requirements
as may be in effect from time to time. Payment of principal and interest to the Depositary is the responsibility of BFI or the Trustee, disbursement of such payments to Participants shall
be the responsibility of the Depositary, and the disbursement of such payments to the owners of beneficial interests in the Global Notes shall be the responsibility of Participants.
BFI
understands that, under existing industry practice, if BFI were to request any action by the Holders or if an owner of a beneficial interest in the Global Notes were to desire to
take any action that the Depositary, as the registered owner of the Global Notes, is entitled to take, the Depositary would authorize Participants to take such action, and that Participants would, in
turn, authorize beneficial owners owning through them to take such action or would otherwise act upon the instructions of such beneficial owners.
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CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
In the opinion of Torys LLP, counsel to BFI, and Goodmans LLP, Canadian counsel to the underwriters, the following is a
general summary of the principal Canadian federal income tax considerations generally applicable under the Tax Act to a beneficial owner of notes (including entitlement to all payments
thereunder) acquired hereunder who, at all relevant times, for the purposes of the Tax Act, deals at arm's length and is not affiliated with the underwriters, BFI and the Company
(a "Note Holder").
This
summary is not applicable to a Note Holder (i) that is a "financial institution" (as defined in the Tax Act for purposes of the "mark-to-market" property
rules), (ii) an interest in which is a "tax shelter investment" (as defined in the Tax Act), (iii) that has elected to report its "Canadian tax results" (as defined
in the Tax Act) in a functional currency in accordance with the provisions of the Tax Act or (iv) that enters into or will enter
into a "derivative forward agreement" (as defined in the Tax Act) in respect of the notes. Such Note Holders should consult their own tax advisors having regard to their particular
circumstances. This summary does not address the split income rules in Section 120.4 of the Tax Act. Note Holders should consult their own tax advisors in that regard.
This
summary is based on the facts set out in this prospectus supplement, the current provisions of the Tax Act and the regulations thereunder
(the "Regulations") in force at the date of this prospectus supplement, all specific proposals to amend the Tax Act and the Regulations
publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof and counsel's understanding of the current administrative policies or assessment practices published in
writing by the Canada Revenue Agency (the "CRA") prior to the date hereof. There can be no assurance that the proposed amendments will be
implemented in their current form or at all. This summary does not otherwise take into account or anticipate any changes of law or practice, whether by judicial, governmental or legislative decision
or action or changes in the administrative policies or assessment practices of the CRA, nor does it take into account tax legislation or considerations of any province, territory or foreign
jurisdiction, which may differ significantly from those discussed herein.
This
summary assumes that no Affiliate of BFI or the Company will be added as a Co-Obligor under the notes. Note Holders should consult with their own tax advisors with respect to the
tax consequences to them of the addition of a Co-Obligor under the notes.
This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to any particular Note Holder and no
representations with respect to the income tax consequences to any particular Note Holder are made. This summary is not exhaustive of all Canadian federal income tax considerations. Accordingly,
prospective investors in notes should consult their own tax advisors with respect to their own particular circumstances.
For
purposes of the Tax Act, all amounts, including interest, adjusted cost base and proceeds of disposition, must be expressed in Canadian dollars. For purposes of the
Tax Act, amounts denominated in U.S. dollars generally must be converted into Canadian dollars using the appropriate exchange rate determined in accordance with the detailed rules in the
Tax Act in that regard.
The following portion of the summary is generally applicable to a Note Holder who, at all relevant times, for the purposes of the
Tax Act, is or is deemed to be resident in Canada, and holds the notes as capital property (a "Resident Note Holder"). Generally, the
notes will be considered to be capital property to a Resident Note Holder provided that the Resident Note Holder does not hold the notes in the course of carrying on a business of buying and selling
securities and has not acquired them in one or more transactions considered to be an adventure or concern in the nature of trade. Certain Resident Note Holders whose notes might not otherwise qualify
as capital property may be entitled to have the notes, and all other "Canadian securities" (as defined in the Tax Act) owned by the Resident Note Holder in the year and in each
subsequent taxation year, deemed to be capital property by making an irrevocable election
permitted by subsection 39(4) of the Tax Act. Such Resident Note Holders should consult their own tax advisors as to whether this election is available and advisable, having regard to
their own particular circumstances.
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A Resident Note Holder that is a corporation, partnership, unit trust or any trust of which a corporation or partnership is a
beneficiary will be required to include in computing its income for a taxation year any interest (or amount that is considered for the purposes of the Tax Act to be interest) on a note
that accrues (or is deemed to accrue) to the Resident Note Holder to the end of the particular taxation year or that becomes receivable by or is received by the Resident Note Holder before the
end of that taxation year, except to the extent that such amount was otherwise included in the Resident Note Holder's income for a preceding taxation year.
Any
other Resident Note Holder, including an individual and a trust (other than a unit trust) of which neither a corporation nor a partnership is a beneficiary, will be required to
include in income for a taxation year any amount received or receivable by such Resident Note Holder in that taxation year (depending upon the method regularly followed by the Resident Note Holder in
computing its income) as interest (or amount that is considered for the purposes of the Tax Act to be interest) on a note, except to the extent that the interest was included in the
Resident Note Holder's income for a preceding taxation year.
The
notes may be issued at a discount from their face value. In such circumstances, a Resident Note Holder may be required to include an amount equal to such discount in computing
income, either in accordance with the deemed interest accrual rules contained in the Tax Act and Regulations or in the taxation year in which an amount in respect of the discount is received or
receivable by the Resident Note Holder. Resident Note Holders should consult their own tax advisors in these circumstances, as the treatment of the discount may vary with the facts and circumstances
giving rise to the discount.
Any
premium paid by BFI to a Resident Note Holder because of the redemption or purchase for cancellation by it of a note before maturity generally will be deemed to be interest received
at that time by the Resident Note Holder to the extent that such premium can reasonably be considered to relate to, and does not exceed the value at the time of the redemption of or purchase for
cancellation, the interest that would have been paid or payable by BFI on the note for a taxation year ending after the redemption or purchase for cancellation.
A
Resident Note Holder that is a "Canadian-controlled private corporation" (as defined in the Tax Act) throughout the relevant taxation year may be liable to pay an
additional refundable tax on certain investment income, including amounts of interest.
On a disposition or deemed disposition of a note, whether on redemption, purchase for cancellation or otherwise, a Resident Note Holder
generally will be required to include in its income the amount of interest accrued (or deemed to accrue) to the Resident Note Holder on the note from the date of the last interest payment to
the date of disposition, except to the extent that such amount has otherwise been included in the Resident Note Holder's income for the taxation year or a previous taxation year. A Resident Note
Holder may also be required to include in computing income the amount of any discount received or receivable by such Resident Note Holder. A Resident Note Holder that receives repayment in full of the
outstanding principal amount of a note upon maturity will be considered to have disposed of the note for proceeds of disposition equal to such outstanding principal amount. In general, a disposition
or deemed disposition of a note will give rise to a capital gain (or capital loss) to the extent that the proceeds of disposition, net of any accrued interest and any other amount included in
computing income and any reasonable costs of disposition, exceed (or are exceeded by) the adjusted cost base of the note to the Resident Note Holder immediately before the disposition.
One-half
of the amount of any capital gain (a "taxable capital gain") realized by a Resident Note Holder in a taxation year
generally must be included in the Resident Note Holder's income for that year, and one-half of the amount of any capital loss (an "allowable capital
loss") realized by a Resident Note Holder in a taxation year must be deducted from taxable capital gains realized by the Resident Note Holder in that year. Allowable capital
losses in excess of taxable capital gains may be carried back and deducted in any of the three preceding taxation years or carried forward and deducted in any subsequent taxation year against net
taxable capital gains realized in such years to the extent and under the circumstances described in the Tax Act.
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A
Resident Note Holder that is a "Canadian-controlled private corporation" (as defined in the Tax Act) throughout the relevant taxation year may be liable to pay an
additional refundable tax on certain investment income, including in respect of taxable capital gains.
Resident
Note Holders that are individuals (other than certain trusts) may be subject to the alternative minimum tax provisions of the Tax Act in respect of realized capital
gains. Such Resident Note Holders should consult their own tax advisors.
The following portion of the summary is generally applicable to a Note Holder who, at all relevant times, for purposes of the
Tax Act, is not, and is not deemed to be, a resident of Canada, does not use or hold and is not deemed to use or hold the notes in or in the course of carrying on business in Canada, deals at
arm's length with any person resident in Canada to whom the Note Holder disposes of a note and is not a "specified shareholder" (as defined in subsection 18(5) of the Tax Act) of
BFI or a person who does not deal at arm's length with such specified shareholder (a "Non-Resident Note Holder"). Special rules, which are not
discussed below, may apply to a non-resident of Canada that is an insurer which carries on business in Canada and elsewhere. This portion of the summary assumes that no interest paid on the notes will
be in respect of a debt or other obligation to pay an amount to a person with whom BFI or the Company does not deal at arm's length within the meaning of the Tax Act.
Amounts
which are, or are deemed to be, interest for purposes of the Tax Act paid or credited by BFI or the Company on the notes to a Non-Resident Note Holder that deals at arm's
length with BFI or the Company at the time such interest is paid or credited will not be subject to non-resident withholding tax and no non-resident withholding tax will apply to the proceeds received
by a Non-Resident Note Holder on a disposition of a note, including a redemption, payment on maturity or repurchase.
Generally,
no other tax on income or gains under the Tax Act will be payable by a Non-Resident Note Holder on interest, principal, premium, bonus or penalty on a note or on the
proceeds received by a Non-Resident Note Holder on the disposition of a note, including a redemption, payment on maturity or repurchase.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of certain U.S. federal income tax considerations relating to the purchase, ownership, and
disposition of a note by a U.S. Holder (as defined herein) that purchases such note pursuant to this offering at the price set forth on the cover of this prospectus supplement. This
summary is based on the Internal Revenue Code of 1986, as amended (the "Code"), administrative pronouncements, published rulings, judicial
decisions, existing Treasury Regulations promulgated under the Code and interpretations of the foregoing, as in effect on the date hereof, all of which are subject to change (possibly with retroactive
effect) and differing interpretations. This summary
discusses only notes held as capital assets within the meaning of Section 1221 of the Code (generally, property held for investment purposes). This summary is intended for general information
purposes only and does not discuss all of the tax consequences that may be relevant based on the particular circumstances of a U.S. Holder or to U.S. Holders subject to special tax
rules, such as banks or other financial institutions, tax-exempt organizations, insurance companies, regulated investment companies, real estate investment trusts or other common trust funds,
partnerships or other pass-through entities (and any investors thereof), certain former citizens or long-term residents of the United States, dealers or traders in securities or foreign
currency, U.S. Holders subject to the alternative minimum tax, U.S. Holders whose functional currency is not United States dollars, persons subject to special tax accounting rules
under Section 451(b) of the Code, or persons that hold notes that are a hedge or that are hedged against currency risks or that are part of a straddle or conversion transaction. In addition,
this summary does not address any aspects of other U.S. federal tax laws, such as estate and gift tax laws or the Medicare contribution tax on net investment income, or any applicable state,
local or non-U.S. tax laws.
For
purposes of this summary, a "U.S. Holder" is a beneficial owner of a note that, for U.S. federal income tax purposes, is
(i) a citizen or individual resident of the United States; (ii) a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, that is
created in or organized under the laws of the United States, any State thereof, or the District of Columbia; (iii) an estate the income of which is includible in gross income for
U.S. federal income tax purposes regardless of its source; or (iv) a trust if (A) a U.S. court is able to exercise primary supervision of the administration of the trust
and one or more U.S. persons have the authority to control all substantial decisions of the trust or (B) the trust has made a valid election to be treated as a U.S. person under
applicable Treasury Regulations.
If a partnership, or other entity or arrangement treated as a partnership for U.S. federal income tax purposes, owns a note, the tax treatment of a partner
in the partnership will depend upon the status of the partner and the activities of the partnership. Partners in a partnership that owns a note are urged to consult their own tax advisers as to the
particular U.S. federal income tax consequences applicable to them.
This
summary does not constitute, and should not be considered as, legal or tax advice to holders of notes. Prospective investors are urged to consult their own tax advisers with regard
to the application of the tax considerations discussed below to their particular situations as well as the application of any state, local, non-U.S. or other tax laws, including gift and estate
tax laws.
BFI will be required to make an offer to purchase the notes at a price equal to 101% of their principal amount, plus accrued and unpaid
interest to the date of repurchase upon the occurrence of a Change of Control Triggering Event. It is possible that BFI's offer to repurchase the notes at a premium could implicate the Treasury
Regulations relating to "contingent payment debt instruments." If the notes were characterized as contingent payment debt instruments, U.S. Holders might, among other things, be required to
accrue interest income at a rate higher than the stated interest on the notes and to treat any gain recognized on the sale, exchange, retirement, redemption or other taxable disposition of a note as
ordinary income rather than as capital gain.
BFI
intends to take the position that the likelihood of such repurchase of the notes at a premium is remote or incidental, and thus that the notes should not be treated as contingent
payment debt instruments. BFI's determination that such a contingency is remote or incidental is binding on a U.S. Holder, unless the U.S. Holder discloses a contrary position in the
manner required by applicable Treasury Regulations. BFI's
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determination,
however, is not binding on the U.S. Internal Revenue Service ("IRS"), and the IRS could challenge this determination.
The
remainder of this summary assumes that BFI's determination that such a contingency is remote or incidental is correct. U.S. Holders are urged to consult their own tax advisers
regarding the possible application of the special rules related to contingent payment debt instruments.
Interest (including Company Additional Amounts and any taxes withheld on payments of interest, if any) on a note generally will be
taxable to a U.S. Holder as ordinary income at the time received or accrued, in accordance with the holder's method of accounting for U.S. federal income tax purposes.
Interest
and Company Additional Amounts paid by BFI on the notes generally will constitute income from sources outside the United States for the purpose of calculating the foreign
tax credit allowable to a U.S. Holder. For U.S. foreign tax credit purposes, interest and Company Additional Amounts paid by BFI generally will constitute "passive category income." The
rules relating to foreign tax credits are complex, and U.S. Holders are urged to consult their own tax advisers regarding the availability of a foreign tax credit under their particular
circumstances.
It is expected, and this summary assumes, that the notes will not be issued with original issue discount
("OID"). If, however, the stated redemption price of a note were to exceed its issue price by more than a de minimis amount, then a U.S. Holder
would be required to treat such excess amount as OID, which would be treated for U.S. federal income tax purposes as accruing over the term of the note
as interest income. Thus, a U.S. Holder would be required to include OID in income in advance of the receipt of the cash to which such OID is attributable. The U.S. Holder's adjusted tax
basis in a note would be increased by the amount of any OID included in the U.S. Holder's gross income. In compliance with Treasury Regulations, if BFI determines that the notes have OID, then
BFI will provide certain information to the IRS and U.S. Holders that is relevant to determining the amount of OID in each accrual period.
Sale, Exchange, Redemption or Other Taxable Disposition of Notes
Upon the sale, exchange, redemption or other taxable disposition of a note, a U.S. Holder generally will recognize gain or loss,
if any, for U.S. federal income tax purposes, equal to the difference between (i) the amount realized on such sale or other taxable disposition (other than amounts received that are
attributable to accrued but unpaid interest, which will be taxed as interest to the extent not previously included in income, as described above) and (ii) the U.S. Holder's adjusted tax
basis in the note. A U.S. Holder's adjusted tax basis in a note generally will be the amount paid for the note, reduced by the amount of any payments on the note other than interest.
Gain
or loss recognized by a U.S. Holder on a sale or other taxable disposition of the notes generally will constitute capital gain or loss and will be long-term capital gain or
loss if the notes were held by the U.S. Holder for more than one year. For non-corporate U.S. Holders, the net amount of long-term capital gain generally will be subject to taxation at
reduced rates. A U.S. Holder's ability to offset capital losses against ordinary income is limited. Gains recognized by a U.S. Holder on a sale or other taxable disposition of the notes
generally will be treated as U.S.-source income for U.S. foreign tax credit purposes.
In general, information reporting will apply to payments of interest on a note and payments of the proceeds from a sale or other
taxable disposition of a note made to U.S. Holders other than certain exempt recipients (such as corporations). In addition, a U.S. Holder may be subject to backup withholding tax on
such payments if the U.S. Holder does not provide a taxpayer identification number, fails to certify that the holder is not subject to backup withholding tax, or otherwise fails to comply with
applicable backup withholding tax rules. Any amounts withheld under the backup withholding rules will be allowed as a credit against a U.S. Holder's
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U.S. federal
income tax liability, provided that the required information is timely furnished to the IRS. Certain U.S. Holders that own "specified foreign financial assets" with an
aggregate value exceeding certain
United States dollar thresholds may be required to include certain information with respect to such assets with their U.S. federal income tax returns. U.S. Holders are urged to
consult their own tax advisers regarding the foregoing requirements with respect to the notes.
BFI intends to comply with certain due diligence and reporting obligations under an intergovernmental agreement between Canada and the
United States relating to FATCA, as implemented by the Tax Act and applicable Canadian regulations. As a result, holders of the notes may be required to provide certain identifying
information to BFI or an intermediary, and this information may be reported to the CRA and, ultimately, the IRS. Each prospective investor is urged to consult its own tax adviser regarding the
implications under FATCA for an investment in notes.
The preceding discussion of certain U.S. federal income tax consequences is for general information only and is not tax advice. Accordingly,
U.S. Holders are urged to consult their own tax advisers as to the particular tax consequences to them of purchasing, owning and disposing of notes, including the applicability and effect of
any federal, state, local or non-U.S. tax laws and of any proposed changes in applicable law.
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UNDERWRITING
Under the terms and subject to the conditions contained in an underwriting agreement
dated , 2021, BFI has agreed to
sell to the underwriters named below, for whom Citigroup Global Markets Inc., SMBC Nikko Securities America, Inc., Deutsche Bank Securities Inc. and HSBC Securities (USA) Inc. are acting
as representatives (the "Representatives"), the following respective principal amounts of notes:
|
|
|
|
|
Underwriter
|
|
Principal Amount
of Notes
(US$)
|
|
Citigroup Global Markets Inc.
|
|
$
|
|
|
SMBC Nikko Securities America, Inc.
|
|
|
|
|
Deutsche Bank Securities Inc.
|
|
|
|
|
HSBC Securities (USA) Inc.
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
|
|
|
|
|
|
The
offering price of US$ (less the underwriters' fees of
US$ ) will be payable in cash to BFI against delivery on or
about , 2021.
The
underwriting agreement provides that the underwriters are obligated to purchase all of the notes if any are purchased. The underwriting agreement also provides that if an underwriter
defaults, the purchase commitments of the non-defaulting underwriters may be increased or the offering of the notes may be terminated.
The
obligations of the underwriters under the underwriting agreement are several and may be terminated at their discretion upon the occurrence of certain stated events. Such events
include, but are not limited to: (i) the suspension of the trading in the Class A Shares by the SEC, any Canadian securities regulatory authority, the NYSE or the TSX or the suspension
or limitation of trading in securities generally on the NYSE or on the TSX or the establishment of minimum prices on either of such exchanges; (ii) the declaration of a banking moratorium
either by U.S. federal, New York State or Canadian authorities; and (iii) the occurrence of any outbreak or the escalation of hostilities, the declaration by the U.S. or Canada of
a national emergency or war, or other calamity or crisis the effect of which on financial markets is such as to make it, in the sole judgment of the Representatives, impractical or inadvisable to
proceed with the offering or delivery of the notes as contemplated by this Prospectus. The distribution price of the notes was determined by negotiation between BFI, the Company and the underwriters.
The
offering of the notes is being made in all the provinces of Canada and in the United States pursuant to a multijurisdictional disclosure system adopted by the
United States. The notes will be offered in the United States and Canada through the underwriters either directly or through their respective U.S. or Canadian broker-dealer affiliates or
agents, as applicable. No sales will be effected in any province of Canada by any underwriter not duly registered as a securities dealer under the laws of such province, other than sales effected
pursuant to the exemptions from the registration requirements under the laws of such province. This offering will be made in Canada by (i) Citigroup Global Markets Canada Inc., a
broker-dealer affiliate of Citigroup Global Markets Inc., and (ii) HSBC Securities (Canada) Inc., a broker-dealer affiliate of HSBC Securities (USA) Inc. SMBC Nikko Securities
America, Inc. and Deutsche Bank Securities Inc., whom we refer to in this prospectus supplement as underwriters, will not offer the notes offered hereby in Canada.
The
underwriters propose to offer the notes initially at the public offering price on the cover page of this prospectus supplement and to selling group members at that price less a
selling concession of % of the principal amount per note. The underwriters and selling group members may
allow a discount of % of the principal amount per note on sales
to other brokers/dealers. After the initial public offering, the underwriters may change the public offering price and concession and discount to brokers/dealers.
After
a reasonable effort has been made to sell all of the notes at the offering price on the cover page of this prospectus supplement, the underwriters may subsequently reduce and
thereafter change, from time to time, the price at which the notes are offered, provided that the notes are not at any time offered at a price greater than the offering price on the cover page of this
prospectus supplement. The compensation realized by the
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underwriters
will be decreased by the amount that the aggregate price paid by purchasers for the notes is less than the gross proceeds paid by the underwriters to BFI.
The
following table shows the underwriting fees and commissions that we are to pay to the underwriters in connection with this offering (expressed as a percentage of the principal amount
of the notes).
BFI
estimates that its "out of pocket" expenses for this offering, including filing fees, printing fees and legal and accounting expenses, but not the underwriting fees and commissions,
will be US$ .
The
notes are a new issue of securities with no established trading market and will not be listed on any national securities exchange. One or more of the underwriters intends to make a
secondary market for the notes. However, they are not obligated to do so and may discontinue making a secondary market for the notes at any time without notice. No assurance can be given as to how
liquid the trading market for the notes will be. See "Risk Factors."
In
connection with the offering of the notes, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of the notes. Specifically, the
underwriters may sell a greater principal amount of notes than they are required to purchase in connection with the offering of the notes, creating a syndicate short position. In addition, the
underwriters may bid for, and purchase, notes in the open market to cover syndicate short positions or to stabilize the price of the notes. Finally, the underwriting syndicate may reclaim selling
concessions allowed for distributing the notes in the offering of the notes, if the syndicate repurchases previously distributed notes in syndicate covering transactions, stabilization transactions or
otherwise. Any of these activities may stabilize or maintain the market price of the notes above independent market levels. None of BFI, the Company or any of the underwriters make any representations
or predictions as to the direction or magnitude of any effect that the transactions described above may have on the price of the notes. The underwriters are not required to engage in any of these
transactions and may end any of them at any time.
The
underwriters also may impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the
underwriters have repurchased notes sold by or for the account of such other underwriter in stabilizing or short-covering transactions.
In
the underwriting agreement, BFI and the Company have agreed that they will not, without the prior written consent of the Representatives, offer, sell, contract to sell, pledge, or
otherwise dispose of (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by BFI, the Company or any affiliate of BFI, the Company or any person in privity with BFI, the Company or any affiliate of BFI or the Company),
directly or indirectly, including the filing (or participation in the filing) of a registration statement with the SEC in respect of, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, any debt securities issued or guaranteed by BFI or the Company (other than the notes) or
publicly announce an intention to effect any such transaction, until the closing of the offering of the notes. For the avoidance of doubt, this provision shall not prohibit the incurrence of
indebtedness by Brookfield under any commercial paper program or under Brookfield's revolving credit facilities in effect on the date of the underwriting agreement. BFI and the Company have agreed to
indemnify the several underwriters against certain
liabilities, including liabilities under the U.S. Securities Act of 1933, as amended, or contribute to payments that each underwriter may be required to make in respect thereof.
The
notes offered by this Prospectus may not be offered or sold, directly or indirectly, nor may this Prospectus or any other offering material or advertisements in connection with the
offer and sale of any such notes be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that
jurisdiction. Persons into whose possession this Prospectus comes are advised to inform themselves about and to observe any restrictions relating to the offering and the
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distribution
of this Prospectus. This Prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any notes offered by this Prospectus in any jurisdiction in which such an
offer or a solicitation is unlawful.
Certain
of the underwriters and their affiliates have provided in the past to us and our affiliates and may provide from time to time in the future certain commercial banking, financial
advisory, investment banking and other services for us and our affiliates in the ordinary course of their business, for which they have received and may continue to receive customary fees and
commissions.
In
addition, from time to time, certain of the underwriters and their affiliates may effect transactions for their own account or the account of customers, and hold on behalf of
themselves or their customers, long or short positions in our debt or equity securities or loans, and may do so in the future. Certain of the underwriters or their affiliates that have a lending
relationship with us routinely hedge their exposure to us consistent with their customary risk management policies. Typically, such underwriters and their affiliates would hedge such exposure by
entering into transactions which consist of either the purchase of credit default swaps or the creation of short positions in our securities, including potentially the notes offered hereby. Any such
credit default swaps or short positions could adversely affect the future trading price of the notes offered hereby. In addition, in the ordinary course of their business activities, the underwriters
and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank
loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities or instruments of ours or our affiliates. The underwriters and
their affiliates may also make investment recommendations or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients
that they acquire, long or short positions in such securities and instruments.
We
expect that delivery of the notes will be made against payment therefore on or about the closing date specified on the cover page of this prospectus supplement, which will be the third business day
following the date of pricing of the notes (this settlement cycle being referred to as "T+3"). Under
Rule 15c6-1 of the Exchange Act, trades in the secondary market generally are required to settle in two business days, unless the parties to any such trade expressly agree otherwise.
Accordingly, purchasers who wish to trade the notes
prior to their delivery hereunder will be required, by virtue of the fact that the notes initially will settle in T+3, to specify an alternate settlement cycle at the time of any such trade to prevent
a failed settlement. Purchasers of notes who wish to make such trades should consult their own advisor.
Notice to Prospective Investors in the European Economic Area
The notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made
available to any retail investor in the European Economic Area ("EEA") For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in
point (11) of Article 4(1) of Directive 2014/65/EU (as amended, "MiFID II"); or (ii) a customer within the meaning of Directive (EU) 2016/97 (as amended, the
"Insurance Distribution Directive"), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified
investor as defined in Regulation (EU) 2017/1129 (as amended, the "Prospectus Regulation"). Consequently, no key information document required by Regulation (EU) No 1286/2014
(as amended, the "PRIIPs Regulation") for offering or selling the notes or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the
notes or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation. This Prospectus has been prepared on the basis that any offer of notes in any
Member State of the EEA will be made pursuant to an exemption under the Prospectus Regulation from the requirement to publish a prospectus for offers of notes. This Prospectus is not a prospectus for
the purposes of the Prospectus Regulation.
In
connection with the offering, Citigroup Global Markets Inc., SMBC Nikko Securities America, Inc., Deutsche Bank Securities Inc., and HSBC Securities (USA) Inc. are not
acting for anyone other than BFI and will not be responsible to anyone other than BFI for providing the protections afforded to their clients nor for providing advice in relation to
the offering.
The
above selling restriction is in addition to any other selling restrictions set out below.
S-35
Table of Contents
Notice to Prospective Investors in the United Kingdom
The notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made
available to any retail investor in the United Kingdom ("UK"). For these purposes, a retail investor means a person who is one (or more) of (i) a retail client, as defined in
point (8) of Article 2 of Regulation (EU) 2017/565 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 ("EUWA"); or (ii) a customer
within the meaning of the provisions of the Financial Services and Markets Act 2000 (as amended, the "FSMA") and any rules or regulations made under the FSMA to implement Directive (EU)
2016/97, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) 600/2014 as it forms part of domestic law by virtue of
the EUWA; or (iii) not a qualified investor as defined in Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the EUWA (the "UK Prospectus Regulation").
Consequently, no key information document required by Regulation (EU) 1286/2014 as it forms part of domestic law by virtue of the EUWA (the "UK PRIIPs Regulation") for offering or selling the
notes or otherwise making them available to retail investors in the UK has been prepared and therefore offering or selling the notes or otherwise making them available to any retail investor in the UK
may be unlawful under the UK PRIIPs Regulation. This Prospectus has been prepared on the basis that any offer of notes in the UK will be made pursuant to an exemption under the UK Prospectus
Regulation and the FSMA from the requirement to publish a prospectus for offers of notes. This Prospectus is not a prospectus for the purposes of the UK Prospectus Regulation or the FSMA.
Notice to Prospective Investors in Switzerland
The notes may not be publicly offered, directly or indirectly, in Switzerland within the meaning of the Swiss Financial Services Act
("FinSA") and no application has or will be made to admit the notes to trading on any trading venue (exchange or multilateral trading facility) in
Switzerland. Neither this offering memorandum nor any other offering or marketing material relating to the notes constitutes a prospectus pursuant to the FinSA, and neither this offering memorandum
nor any other offering or marketing material relating to the notes may be publicly distributed or otherwise made publicly available in Switzerland.
Notice to Prospective Investors in Hong Kong
No underwriter nor any of their affiliates (i) have offered or sold, or will offer or sell, in Hong Kong, by means of any
document, the notes other than (a) to "professional investors" as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance or
(b) in other circumstances which do not result in the document being a "prospectus" as defined
in the Companies Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance or (ii) have issued or had in its possession for
the purposes of issue, or will issue or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the notes that is
directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to
notes that are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" as defined in the Securities and Futures Ordinance and any rules made under that
Ordinance. The contents of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. If you are in any doubt about
any of the contents of this document, you should obtain independent professional advice.
Notice to Prospective Investors in Japan
The notes have not been and will not be registered under the Financial Instruments and Exchange Act of Japan, Act No. 25 of
1948, as amended (the "FIEA") and the underwriters will not offer or sell any of the notes directly or indirectly in Japan or to, or for the
benefit of, any Japanese person or to others, for re-offering or re-sale directly or indirectly in Japan or to any Japanese person, except in each case pursuant to an exemption from the registration
requirements of, and otherwise in compliance with, FIEA and any other applicable laws and regulations of Japan. For purposes of this paragraph, "Japanese person" means any person resident in Japan,
including any corporation or other entity organized under the laws of Japan.
S-36
Table of Contents
Notice to Prospective Investors in Singapore
This prospectus supplement has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this
prospectus supplement and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the notes may not be circulated or distributed, nor may
the notes be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional
investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the "SFA"), (ii) to a relevant person, or any person pursuant to
Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other
applicable provision of the SFA. Where the notes are subscribed or purchased under Section 275 by a relevant person which is: (i) a corporation (which is not an accredited investor) the
sole business of which is to hold investments and the entire share capital of which is owned by one or more
individuals, each of whom is an accredited investor; or (ii) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an
accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries' rights and interest in that trust shall not be transferable for 6 months
after that corporation or that trust has acquired the notes under Section 275 except: (1) to an institutional investor under Section 274 of the SFA or to a relevant person, or any
person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA; (2) where no consideration is given for the transfer; or
(3) by operation of law. Singapore Securities and Futures Act Product Classification Solely for the purposes of its
obligations pursuant to sections 309B(1)(a) and 309B(1)(c) of the SFA, BFI has determined, and hereby notifies all relevant persons (as defined in Section 309A of the SFA)
that the notes are "prescribed capital markets products" (as defined in the Securities and Futures (Capital Markets Products) Regulations 2018) and "Excluded Investment Products"
(as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).
PRIOR SALES
No debt securities have been issued by BFI during the 12 months preceding the date of this prospectus supplement except for:
(i) the issuance of the original 2030 notes at a price of 99.903% of their principal amount; (ii) the issuance of the additional 2030 notes at a price of 99.878% of their principal
amount; (iii) the issuance of the 2051 notes at 99.313% of their principal amount; and (iv) the issuance of the 2080 notes at a price of 100% of their principal amount.
LEGAL MATTERS
The validity of the notes being offered hereby will be passed upon for the Company and BFI by Torys LLP of Toronto, Ontario, and
New York, New York, with respect to certain matters of Canadian law and of United States law, and for the underwriters by Skadden, Arps, Slate, Meagher & Flom LLP of
Toronto, Ontario, with respect to certain matters of United States law and Goodmans LLP of Toronto, Ontario, with respect to certain matters of Canadian law. As at April 6, 2021,
the partners and associates of each of Torys LLP and Goodmans LLP owned beneficially as a group, directly or indirectly, less than 1% of our outstanding shares.
ELIGIBILITY FOR INVESTMENT
In the opinion of Torys LLP and Goodmans LLP, the notes, if acquired on the date hereof, would at that time be "qualified
investments" under the Tax Act and the Regulations for a trust governed by a registered retirement savings plan ("RRSP"), registered retirement
income fund ("RRIF"), registered education savings plan ("RESP"), registered disability savings plan
("RDSP"), tax-free savings account ("TFSA") or deferred profit sharing plan, other than a deferred
profit sharing plan to which
contributions are made by BFI or by an employer with which BFI does not deal at arm's length for purposes of the Tax Act.
Notwithstanding
the foregoing, a holder of a TFSA or an RDSP, a subscriber of an RESP or an annuitant under an RRSP or RRIF, as the case may be, will be subject to a penalty tax if the
notes are a "prohibited investment" (as defined in the Tax Act) for the TFSA, RDSP, RESP, RRSP or RRIF. The notes generally will not be a "prohibited investment" on the date hereof if
the holder of the TFSA or RDSP, the subscriber of the RESP or the annuitant under the RRSP or RRIF, as applicable: (i) deals at arm's length for the purposes of the Tax Act with BFI and
(ii) does not have a "significant interest" (as defined in the Tax Act for purposes of the "prohibited investment" rules) in BFI. Investors who intend to hold the notes in a TFSA,
RDSP, RESP, RRSP or RRIF should consult their own tax advisors regarding the application of the foregoing "prohibited investment" rules having regard to their particular circumstances.
S-37
Base Shelf Prospectus
This short form base shelf prospectus has been filed under legislation in each of the provinces of Canada that permits certain
information about these securities to be determined after this prospectus has become final and that permits the omission from this prospectus of that information. The legislation requires the delivery
to purchasers of a prospectus supplement containing the omitted information within a specified period of time after agreeing to purchase any of these
securities.
A registration statement relating to these securities has been filed with the U.S. Securities and Exchange Commission,
and the prospectus contained herein is not complete and may be changed. These securities may not be offered or sold prior to the time the registration statement becomes effective. This prospectus
shall not constitute an offer to sell in any U.S. state where the offer or sale is not permitted.
No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. This short form base shelf prospectus constitutes a
public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities. Information has been incorporated by reference
in this prospectus from documents filed with securities commissions or similar authorities in Canada. Copies of the documents incorporated herein by reference may be obtained on request without charge from the office of
the Corporate Secretary of the Company at Suite 300, Brookfield Place,
181 Bay Street, Toronto, Ontario, Canada, M5J 2T3, Telephone: (416) 363-9491, and are also available electronically at the Canadian Securities Administrators' Website at
www.sedar.com.
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New Issue
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October 6, 2020
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SHORT FORM BASE SHELF PROSPECTUS
US$3,500,000,000
BROOKFIELD ASSET
MANAGEMENT INC.
Debt Securities
Class A Preference Shares
Class A Limited Voting Shares
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BROOKFIELD FINANCE INC.
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BROOKFIELD FINANCE II INC.
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BROOKFIELD FINANCE LLC
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Debt Securities
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Debt Securities
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Debt Securities
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BROOKFIELD FINANCE II LLC
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BROOKFIELD FINANCE (AUSTRALIA) PTY LTD
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BROOKFIELD FINANCE I (UK) PLC
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Preferred Shares
(representing limited liability
company interests)
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Debt Securities
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Debt Securities
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During the 25-month period that this short form base shelf prospectus, including any amendments hereto (this "Prospectus"), remains
effective, (i) each of Brookfield Asset Management Inc. (the "Company" or "BAM"),
Brookfield Finance Inc. ("BFI"), Brookfield Finance LLC (the "US LLC Issuer"),
Brookfield Finance II Inc. ("BFI II"), Brookfield Finance (Australia) Pty Ltd (the "AUS
Issuer") and Brookfield Finance I (UK) PLC (the "UK Issuer," and together with BFI, the US LLC Issuer, BFI II
and the AUS Issuer, the "Finance Debt Issuers") may from time to time offer and issue senior or subordinated, as applicable, unsecured debt securities
(the "BAM Debt Securities", "BFI Debt Securities", "US LLC Debt
Securities", "BFI II Debt Securities", "AUS Issuer Debt Securities" and
"UK Issuer Debt Securities" respectively, and collectively the "Debt Securities"), (ii) the Company
may from time to time offer and issue Class A Preference Shares (the "BAM Preference Shares") and Class A Limited Voting Shares
(the "Class A Shares") and (iii) Brookfield Finance II LLC (the "US Pref
Issuer") (collectively with BAM, BFI, the US LLC Issuer, BFI II, the AUS Issuer and the UK Issuer, the "Issuers" and each an
"Issuer") may from time to time offer and issue preferred shares representing limited liability company interests (the "US
Preferred Shares", and together with the BAM Preference Shares, the "Preference Securities", and the Preference Securities,
Class A Shares and Debt Securities collectively referred to herein as the "Securities"). Each of the BFI Debt Securities, US LLC Debt
Securities, BFI II Debt Securities, AUS Issuer Debt Securities and UK Issuer Debt Securities will be fully and unconditionally guaranteed as to payment of principal, premium (if any) and
interest and certain other amounts by the Company, and the US Preferred Shares will be fully and unconditionally guaranteed as to the payment of distributions when due, the payment of amounts due on
redemption, and the payment of amounts due on the liquidation, dissolution or winding-up of the US Pref Issuer, in each case by the Company.
The Company, BFI and BFI II are permitted, under a multijurisdictional disclosure system adopted by the United States and Canada, to prepare this Prospectus in accordance
with the Canadian disclosure requirements. Prospective investors should be aware that such requirements are different from those of the United States. The financial statements included or
incorporated herein have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and thus may not be comparable to
financial statements of U.S. companies.
Prospective investors should be aware that the acquisition of the Securities may have tax consequences both in the United States and in Canada. Such consequences for
investors who are residents in Canada or are residents in, or citizens of, the United States may not be described fully herein or in a Prospectus Supplement (as defined below).
Prospective investors should consult their own tax advisors with respect to their particular circumstances.
The enforcement by investors of civil liabilities under the U.S. federal securities laws may be affected adversely by the fact that the Company, BFI, BFI II, the AUS
Issuer and the UK Issuer are incorporated or organized under the laws of a foreign jurisdiction outside of the United States and that some or all of their officers and directors may be
residents of a foreign jurisdiction outside of the United States, that some or all of the underwriters or experts named or to be named in the registration statement may be residents of a
foreign jurisdiction outside of the United States and that all or a substantial portion of the assets of the Issuers and such persons may be located outside the
United States.
See "Cautionary Note Regarding Forward-Looking Information" and "Risk Factors" beginning on pages iii and 2 for a discussion of certain risks that you should
consider in connection with an investment in these Securities.
THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION"), ANY U.S. STATE SECURITIES COMMISSION, OR ANY
CANADIAN REGULATORY AUTHORITY, NOR HAS THE COMMISSION, ANY U.S. STATE SECURITIES COMMISSION OR ANY CANADIAN SECURITIES REGULATORY AUTHORITY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Collectively,
the Issuers may offer and issue Securities either separately or together, in one or more offerings in an aggregate principal amount of up to US$3,500,000,000 (or the equivalent in
other currencies or currency units). Securities of any series may be offered in such amount and with such terms as may be determined in light of market conditions. The specific terms of the Securities
in respect of which this Prospectus is being delivered will be set forth in one or more prospectus supplements (each a "Prospectus Supplement") to be
delivered to purchasers together with this Prospectus, and may include, where applicable (i) in the case of Debt Securities, the specific designation, aggregate principal amount, denomination
(which may be in United States dollars, in any other currency or in units based on or relating to foreign currencies), maturity, interest rate (which may be fixed or variable) and time of
payment of interest, if any, any terms for redemption at the option of the Issuer or the holders, any terms for sinking fund payments, any listing on a securities exchange, the initial public offering
price (or the manner of determination thereof if offered on a non-fixed price basis), any exchange or conversion terms and any other specific terms, (ii) in the case of the BAM
Preference Shares, the designation of the particular class, series, aggregate principal amount, the number of shares offered, the issue price, the dividend rate, the dividend payment dates, any terms
for redemption at the option of the Company or the holder, any exchange or conversion terms and any other specific terms, (iii) in the case of Class A Shares, the number of shares
offered, the issue price and any other specific terms, and (iv) in the case of the US Preferred Shares, the designation of the particular class, series, aggregate principal amount, the number
of shares representing limited liability company interests offered, the issue price, the distribution rate, the distribution payment dates, any terms for redemption at the option of the US Pref Issuer
or the holder, any exchange or conversion terms and any other specific terms. Each such Prospectus Supplement will be incorporated by reference into this Prospectus for the purposes of securities
legislation as of the date of each such Prospectus Supplement and only for the purposes of the distribution of the Securities to which such Prospectus Supplement pertains. The Issuers have filed an
undertaking with the securities regulatory authorities in each of the provinces of Canada that they will not distribute, under this Prospectus, Securities that, at the time of distribution, are novel
without pre-clearing the disclosure to be contained in the Prospectus Supplement, pertaining to the distribution of such Securities, with the applicable regulator.
The
Company's, BFI's and BFI II's head and registered offices are at Suite 300, Brookfield Place, 181 Bay Street, P.O. Box 762, Toronto, Ontario, M5J 2T3. The
US LLC Issuer's and the US Pref Issuer's head and registered office is at Brookfield Place, 250 Vesey Street, 15th Floor, New York, New York, United States
10281-1023. The AUS Issuer's registered and head office is Level 22, 135 King Street, Sydney, NSW, Australia 2000. The UK Issuer's registered and head office is Level 25
One Canada Square, London, United Kingdom, E14 5AA.
The
Issuers may sell the Securities to or through underwriters or dealers or directly to investors or through agents. The Prospectus Supplement relating to each series of offered Securities will
identify each person who may be deemed to be an underwriter or agent with respect to such series and will set forth the terms of the offering of such series, including, to the extent applicable, the
initial public offering price, the proceeds to the applicable Issuer, the underwriting commissions or agent commissions, as applicable, and any other concessions to be allowed or reallowed to dealers.
The managing underwriter or underwriters with respect to each series sold to or through underwriters will be named in the related Prospectus Supplement.
In
connection with any underwritten offering of Securities, the underwriters or agents may over-allot or effect transactions which stabilize or maintain the market price of the Securities offered at a
level above that which might otherwise prevail in the open market. Such transactions, if commenced, may be discontinued at any time. See "Plan of Distribution".
The
outstanding BAM Preference Shares, Series 2, Series 4, Series 8, Series 9, Series 13, Series 17, Series 18, Series 24, Series 25,
Series 26, Series 28, Series 30, Series 32, Series 34, Series 36, Series 37, Series 38, Series 40, Series 42, Series 44,
Series 46 and Series 48 are listed on the Toronto Stock Exchange. The outstanding Class A Shares are listed for trading on the New York and Toronto stock exchanges.
The
US LLC Issuer, the US Pref Issuer, the AUS Issuer, the UK Issuer, certain directors of each of the Company, the AUS Issuer and the UK Issuer and certain managers of the US LLC Issuer
and the US Pref Issuer (collectively, the "Non-Residents") are incorporated, continued or otherwise organized under the laws of a non-Canadian
jurisdiction or reside outside of Canada, as applicable. Although each of the Non-Residents has appointed the Company, Suite 300, Brookfield Place, 181 Bay Street, Toronto, Ontario,
Canada, M5J 2T3, as its agent for service of process in Ontario, it may not be possible for investors to enforce judgments obtained in Canada against any person or company that is incorporated,
continued or otherwise organized under the laws of a non-Canadian jurisdiction or resides outside of Canada, even if the Non-Resident has appointed an agent for service of process. See "Agent for
Service of Process".
There is no market through which the Debt Securities or the Preference Securities may be sold and purchasers may not be able to resell Debt Securities or Preference Securities
purchased under this Prospectus. This may affect the pricing of the Debt Securities or the Preference Securities in the secondary market, the transparency and availability of trading prices, the
liquidity of the Debt Securities or the Preference Securities, and the extent of issuer regulation. See "Risk Factors".
TABLE OF CONTENTS
In
this Prospectus, unless the context otherwise indicates, references to the "Company" refer to Brookfield Asset Management Inc.
and references to "we", "us", "our" and
"Brookfield" refer to the Company and its direct and indirect subsidiaries including BFI, the US LLC Issuer, BFI II, the AUS Issuer, the UK
Issuer and the US Pref Issuer. All dollar amounts set forth in this Prospectus and any Prospectus Supplement are in U.S. dollars, except where otherwise indicated.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents, filed with the securities regulatory authorities in each of the provinces and territories of Canada, and filed
with, or furnished to, the Commission, are specifically incorporated by reference in this Prospectus:
i
Any
documents of the Company, and if applicable, the Finance Debt Issuers and the US Pref Issuer, of the type described in item 11.1 of
Form 44-101F1 Short Form Prospectus, and any "template version" of "marketing materials" (each as defined
in National Instrument 41-101 General Prospectus Requirements
("NI 41-101")), that are required to be filed by the Company, and if applicable, the Finance Debt Issuers and the US Pref Issuer with the
applicable securities regulatory authorities in Canada, after the date of this Prospectus and prior to the termination of the applicable offering of Securities shall be deemed to be incorporated by
reference into this Prospectus. Each annual report on Form 40-F filed by the Company will be incorporated by reference into this Prospectus and the U.S. registration statement on
Forms F-10 and F-3 of which it forms a part (the "Registration Statement"). In addition, any report on Form 6-K filed
by the Company with the Commission after the date of this Prospectus shall be deemed to be incorporated by reference into this Prospectus and the Registration Statement if and to the extent expressly
provided in such report. The Company's reports on Form 6-K and its annual report on Form 40-F are available at the Commission's website
at www.sec.gov.
Any statement contained in this Prospectus or in a document incorporated or deemed to be incorporated by reference in this Prospectus shall be deemed to be
modified or superseded for the purposes of this Prospectus to the extent that a statement contained in this Prospectus or in any other subsequently filed
document that also is or is deemed to be incorporated by reference in this Prospectus modifies or supersedes that statement. The modifying or superseding statement need not state that it has modified
or superseded a prior statement or includes any other information set forth in the document that it modifies or supersedes. The making of a modifying or superseding statement shall not be deemed an
admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is
required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made. Any statement so modified or superseded shall not be deemed, except as
so modified or superseded, to constitute a part of this Prospectus.
Upon
a new annual information form and new interim or annual financial statements being filed with and, where required, accepted by the applicable securities regulatory authorities
during the currency of this Prospectus, the previous annual information form, the previous interim or annual financial statements and all material change reports filed prior to the commencement of the
then current fiscal year will be deemed no longer to be incorporated by reference into this Prospectus for purposes of future offers and sales of Securities hereunder. Upon a new management
information circular in connection with an annual meeting being filed with the applicable securities regulatory authorities during the currency of this Prospectus, the management information circular
filed in connection with the previous annual meeting (unless such management information circular also related to a special meeting) will be deemed no longer to be incorporated by reference in this
Prospectus for purposes of future offers and sales of Securities hereunder.
A
Prospectus Supplement containing the specific terms of an offering of Securities will be delivered to purchasers of such Securities together with this Prospectus and will be deemed to
be incorporated into this Prospectus as of the date of such Prospectus Supplement but only for purposes of the offering of Securities covered by that Prospectus Supplement.
Prospective
investors should rely only on the information incorporated by reference or contained in this Prospectus or any Prospectus Supplement and on the other information included in
the Registration Statement relating to the Securities and of which this Prospectus is a part. The Issuers have not authorized anyone to provide different or additional information.
Copies
of the documents incorporated herein by reference may be obtained on request without charge from the office of the Corporate Secretary of the Company at Suite 300,
Brookfield Place, 181 Bay Street, Toronto, Ontario, Canada, M5J 2T3 telephone: (416) 363-9491, and are also available electronically on System for Electronic Document Analysis and
Retrieval ("SEDAR") at www.sedar.com.
ii
AVAILABLE INFORMATION
The Issuers have filed the Registration Statement with the Commission under the United States Securities Act of 1933, as amended
(the "Securities Act"). This Prospectus does not contain all of the information set forth in such Registration Statement, to which reference is
made for further information.
The
Company is subject to the informational requirements of the United States Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and, in accordance therewith, files reports and other information with the Commission. Under a multijurisdictional disclosure system adopted by the United States
and Canada, such reports and other information may be prepared in accordance with the disclosure requirements of Canada, which requirements are different from those of the United States. The
Commission maintains an Internet site (http://www.sec.gov) that makes available reports and other information that the Company files or furnishes electronically with it.
The Company's Internet site can be found at http://bam.brookfield.com. The information on our website is not incorporated by reference into this Prospectus and should not
be considered a part of this Prospectus, and the reference to our website in this Prospectus is an inactive textual reference only.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
This Prospectus and the documents incorporated by reference herein contain forward-looking information and other "forward-looking
statements" within the meaning of Canadian and United States securities laws, including the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include
statements that are predictive in nature, depend upon or refer to future events or conditions, including, but not limited to, statements that reflect management's expectations regarding the
operations, business, financial condition, expected financial results, performance, prospects, opportunities, priorities, targets, goals, ongoing objectives, strategies and outlook of Brookfield, as
well as the outlook for North American and international economies for the current fiscal year and subsequent periods.
The
words "expects," "likely", "anticipates," "plans," "believes," "estimates," "seeks," "intends," "targets," "projects," "forecasts" or negative versions thereof and other similar
expressions, or future or conditional verbs such as "may," "will," "should," "would" and "could", which are predictions of or indicate future events, trends or prospects, and which do not relate to
historical matters, identify forward-looking statements. Although Brookfield believes that the anticipated future results, performance or achievements expressed or implied by the forward-looking
statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information because they involve known
and unknown risks, uncertainties and other factors, many of which are beyond Brookfield's control, including the ongoing and developing novel coronavirus pandemic
("COVID-19") and the global economic shutdown, which may cause the actual results, performance or achievements of Brookfield to differ materially from
anticipated future results, performance or achievement expressed or implied by such forward-looking statements and information.
Factors
that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include, but are not limited to: investment returns that are
lower than target; the impact or unanticipated impact of general economic, political and market factors in the countries in which we do business or may do business, including as a result of COVID-19
and the global economic shutdown; changes in government regulation and legislation within the countries in which we operate and our failure to comply with regulatory requirements; governmental
investigations; the behaviour of financial markets, including fluctuations in interest and foreign exchange rates; the ability to transfer financial commitments entered into in support of our asset
management franchise; global equity and capital markets and the availability of equity and debt financing and refinancing within these markets; strategic actions including dispositions; the ability to
complete and effectively integrate acquisitions into existing operations and the ability to attain expected benefits; the ability to appropriately manage human capital; changes in tax laws; changes in
accounting policies and methods used to report financial condition (including uncertainties associated with critical accounting assumptions and estimates); the introduction, withdrawal, success and
timing of business initiatives and strategies; the failure of effective disclosure controls and procedures and internal controls over financial reporting; the effect of applying future accounting
changes; business competition; operational and reputational risks; health, safety and environmental risks; technological change; catastrophic events, such as earthquakes, hurricanes, and
iii
pandemics/epidemics,
including COVID-19; the failure of our information technology systems; litigation; the possible impact of international conflicts and other developments including terrorist acts
and cyberterrorism; the maintenance of adequate insurance coverage; the ability to collect amounts owed; the existence of information barriers between certain businesses within our asset management
operations; risks specific to our business segments, including our real estate, renewable power, infrastructure, private equity, credit and residential development activities; and other risks and
factors detailed in this Prospectus under the heading "Risk Factors" as well as in the AIF under the heading "Business Environment and Risks" and the MD&A under the heading
"Part 6 Business Environment and Risks" and the risks included in the Interim MD&A, each incorporated by reference in this Prospectus, as well as in
other documents filed by the Issuers from time to time with the securities regulators in Canada and the United States.
We
caution that the foregoing list of important factors that may affect future results is not exhaustive. Nonetheless, all of the forward-looking statements contained in this Prospectus
or in documents incorporated by reference herein are qualified by these cautionary statements. When relying on our forward-looking statements, investors and others should carefully consider the
foregoing factors and other uncertainties and potential events. Except as required by law, the Issuers undertake no obligation to publicly update or revise any forward-looking statements or
information, whether written or oral, that may need to be updated as a result of new information, future events or otherwise.
iv
SUMMARY
The Company
The Company is a global alternative asset manager with approximately US$550 billion in assets under management across real
estate, infrastructure, renewable power, private equity and credit. Brookfield offers a range of public and private investment products and services which leverage its expertise and experience. The
Company's Class A Shares are co-listed on the New York Stock Exchange and the Toronto Stock Exchange under the symbols "BAM" and "BAM.A", respectively.
Brookfield Finance Inc.
BFI was incorporated on March 31, 2015 under the Business Corporations Act
(Ontario) and is an indirect 100% owned subsidiary of the Company. BFI has issued or become an obligor under approximately US$4.9 billion of unsecured debt securities
(the "Existing Debt Securities") as of the date hereof. The Existing Debt Securities are fully and unconditionally guaranteed by
the Company.
Brookfield Finance LLC
The US LLC Issuer was formed on February 6, 2017 under the Delaware Limited Liability Company
Act and is an indirect 100% owned subsidiary of the Company. The US LLC Issuer has no significant assets or liabilities, no subsidiaries and no ongoing business
operations of its own, other than the issuance of US LLC Debt Securities and the investments it makes with the net proceeds of such US LLC Debt Securities. Any debt securities issued by
the US LLC Issuer are fully and unconditionally guaranteed by the Company. On March 10, 2017, the US LLC Issuer issued US$750 million of 4.00% notes due in 2024
(the "2024 Notes"). On December 31, 2018, as part of an internal reorganization, the 2024 Notes were transferred to BFI. On
February 21, 2020, the US LLC Issuer issued US$600 million of 3.50% notes due in 2050.
BFI II
BFI II was incorporated on September 24, 2020 under the Business Corporations
Act (Ontario) and is a direct 100% owned subsidiary of the Company. BFI II has no significant assets or liabilities, no subsidiaries and no ongoing business operations of
its own.
The AUS Issuer
The AUS Issuer was incorporated on September 24, 2020 under the Corporations Act 2001 (Commonwealth of Australia) and is an
indirect 100% owned subsidiary of the Company. The AUS Issuer has no significant assets or liabilities, no subsidiaries and no ongoing business operations of its own.
The UK Issuer
The UK Issuer was incorporated on September 25, 2020 under the UK Companies Act 2006 and is an indirect 100% owned subsidiary of
the Company. The registered number of the UK Issuer is 12904555. The UK Issuer has no significant assets or liabilities, no subsidiaries and no ongoing business operations of its own.
The US Pref Issuer
The US Pref Issuer was formed on September 24, 2020 under the Delaware Limited Liability Company
Act and is an indirect 100% owned subsidiary of the Company. The US Pref Issuer has no significant assets or liabilities, no subsidiaries and no ongoing business operations of
its own.
1
The Offering
The Securities described herein may be offered from time to time in one or more offerings utilizing a "shelf" process under Canadian
and U.S. securities laws. Under this shelf process, this Prospectus provides you with a general description of the Securities that we may offer. Each time we sell Securities, we will provide a
Prospectus Supplement that will contain specific information about the terms of that offering. The Prospectus Supplement may also add, update or change information contained in this Prospectus. You
should read both this Prospectus and any Prospectus Supplement together with additional information described under the heading "Available Information."
RISK FACTORS
An investment in the Securities is subject to a number of risks. Before deciding whether to invest in the Securities, investors should
consider carefully the risks described in the relevant Prospectus Supplement and the information incorporated by reference in this Prospectus (including subsequently filed documents incorporated by
reference). Specific reference is made to the section entitled "Part 6 Business Environment and Risks" in the MD&A, the section entitled "Business
Environment and Risks" in the AIF and the risks included in the Interim MD&A, each of which is incorporated by reference in this Prospectus.
For
further details concerning the impact of COVID-19 on the Company, please see "Part 6 Business Environment and Risks" in the MD&A and
the discussion included in the sections entitled "Part 2 Review of Consolidated Financial Results Overview" and
"Part 5 Accounting Policies and Internal Controls Accounting Policies, Estimates and
Judgements COVID-19" in the Interim MD&A. The Company continues to closely monitor developments associated with COVID-19 and the related global impact. No new
material facts in relation to the Company with regard to COVID-19 have occurred since the date of the Interim MD&A.
CONSOLIDATING SUMMARY FINANCIAL INFORMATION AND SUPPLEMENTAL INFORMATION
The following consolidating summary financial information is provided in compliance with the requirements of item 13.2 of
National Instrument 44-101F1 Short Form Prospectus.
The
tables below present summarized financial information for the years ended December 31, 2019 and 2018 and the three and six months ended June 30, 2020 and 2019 for
(i) the Company, (ii) BFI, (iii) the US LLC Issuer, (iv) BFI II, (v) the AUS Issuer, (vi) the UK Issuer, (vii) the US Pref Issuer,
(viii) the Company's subsidiaries, other than the Finance Debt Issuers and the US Pref Issuer, on a combined basis, (ix) consolidating adjustments, and (x) the Company and all of
its subsidiaries on a consolidated basis, in each case for the periods indicated. Such summary financial information is intended to provide investors with meaningful and comparable financial
information about the Company and its subsidiaries. This summarized financial information should be read in conjunction with the Company's audited consolidated financial statements as of
December 31, 2019 and 2018 and the Company's unaudited interim condensed and consolidated financial statements as at and for the three and six months ended June 30, 2020 and for the
three and six months ended June 30, 2019 which are incorporated by reference into this Prospectus.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AS AT AND FOR THE THREE MONTHS ENDED JUN. 30, 2020
(MILLIONS)
|
|
The
Company(1)
|
|
BFI
|
|
US LLC
Issuer
|
|
BFI II
|
|
AUS
Issuer
|
|
UK
Issuer
|
|
US
Pref
Issuer
|
|
Subsidiaries
of the
Company
Other than
the Finance
Debt Issuers
and the US
Pref Issuer(2)
|
|
Consolidating
Adjustments(3)
|
|
The
Company
Consolidated
|
|
Revenues
|
|
$
|
(8
|
)
|
$
|
138
|
|
$
|
8
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
13,943
|
|
$
|
(1,252
|
)
|
$
|
12,829
|
|
Net (loss) income attributable to shareholders
|
|
|
(656
|
)
|
|
87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
667
|
|
|
(754
|
)
|
|
(656
|
)
|
Total assets
|
|
|
68,118
|
|
|
6,109
|
|
|
600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
330,774
|
|
|
(89,166
|
)
|
|
316,435
|
|
Total liabilities
|
|
|
36,048
|
|
|
4,611
|
|
|
596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
196,896
|
|
|
(32,782
|
)
|
|
205,369
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AS AT DEC. 31, 2019 AND FOR THE THREE MONTHS ENDED JUN. 30, 2019
(MILLIONS)
|
|
The
Company(1)
|
|
BFI
|
|
US LLC
Issuer
|
|
BFI II
|
|
AUS
Issuer
|
|
UK
Issuer
|
|
US
Pref
Issuer
|
|
Subsidiaries
of the
Company
Other than
the Finance Debt
Issuers and
the US Pref Issuers(2)
|
|
Consolidating
Adjustments(3)
|
|
The
Company
Consolidated
|
|
Revenues
|
|
$
|
|
|
$
|
38
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
18,179
|
|
$
|
(1,293
|
)
|
$
|
16,924
|
|
Net (loss) income attributable to shareholders
|
|
|
399
|
|
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
641
|
|
|
(671
|
)
|
|
399
|
|
Total assets
|
|
|
70,976
|
|
|
5,389
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
335,218
|
|
|
(87,614
|
)
|
|
323,969
|
|
Total liabilities
|
|
|
35,963
|
|
|
3,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
197,825
|
|
|
(30,659
|
)
|
|
207,123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOR THE SIX MONTHS ENDED JUN. 30, 2020
(MILLIONS)
|
|
The
Company(1)
|
|
BFI
|
|
US LLC
Issuer
|
|
BFI II
|
|
AUS
Issuer
|
|
UK
Issuer
|
|
US
Pref
Issuer
|
|
Subsidiaries
of the
Company
Other than
the Finance Debt and
the US Pref Issuer(2)
|
|
Consolidating
Adjustments(3)
|
|
The
Company
Consolidated
|
|
Revenues
|
|
$
|
430
|
|
$
|
176
|
|
$
|
12
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
32,015
|
|
$
|
(3,218
|
)
|
$
|
29,415
|
|
Net (loss) income attributable to shareholders
|
|
|
(949
|
)
|
|
82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,090
|
|
|
(2,172
|
)
|
|
(949
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOR THE SIX MONTHS ENDED JUN. 30, 2019
(MILLIONS)
|
|
The
Company(1)
|
|
BFI
|
|
US LLC
Issuer
|
|
BFI II
|
|
AUS
Issuer
|
|
UK
Issuer
|
|
US
Pref
Issuer
|
|
Subsidiaries
of the
Company
Other than
the Finance Debt Issuers and
the US Pref Issuer(2)
|
|
Consolidating
Adjustments(3)
|
|
The
Company
Consolidated
|
|
Revenues
|
|
$
|
(21
|
)
|
$
|
72
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
35,358
|
|
$
|
(3,277
|
)
|
$
|
32,132
|
|
Net (loss) income attributable to shareholders
|
|
|
1,014
|
|
|
34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,985
|
|
|
(2,019
|
)
|
|
1,014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AS AT AND FOR THE YEAR ENDED DEC 31, 2019 (MILLIONS)
|
|
The Company(1)
|
|
BFI
|
|
US LLC
Issuer
|
|
BFI II
|
|
AUS
Issuer
|
|
UK
Issuer
|
|
US
Pref
Issuer
|
|
Subsidiaries
of the
Company
Other than
the Finance
Debt Issuers
and the US
Pref Issuer(2)
|
|
Consolidating
Adjustments(3)
|
|
The Company
Consolidated
|
|
Revenues
|
|
$
|
104
|
|
$
|
148
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
73,415
|
|
$
|
(5,841
|
)
|
$
|
67,826
|
|
Net (loss) income attributable to shareholders
|
|
|
2,807
|
|
|
40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,578
|
|
|
(3,618
|
)
|
|
2,807
|
|
Total assets
|
|
|
70,976
|
|
|
5,389
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
335,218
|
|
|
(87,614
|
)
|
|
323,969
|
|
Total liabilities
|
|
|
35,963
|
|
|
3,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
197,825
|
|
|
(30,659
|
)
|
|
207,123
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AS AT AND FOR THE YEAR ENDED DEC 31, 2018 (MILLIONS)
|
|
The Company(1)
|
|
BFI
|
|
US LLC
Issuer
|
|
BFI II
|
|
AUS
Issuer
|
|
UK
Issuer
|
|
US
Pref
Issuer
|
|
Subsidiaries
of the
Company
Other than
the Finance
Debt Issuers
and the US
Pref Issuer(2)
|
|
Consolidating
Adjustments(3)
|
|
The Company
Consolidated
|
|
Revenues
|
|
$
|
810
|
|
$
|
43
|
|
$
|
53
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
63,147
|
|
$
|
(7,282
|
)
|
$
|
56,771
|
|
Net (loss) income attributable to shareholders
|
|
|
3,584
|
|
|
(46
|
)
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,651
|
|
|
(4,604
|
)
|
|
3,584
|
|
Total assets
|
|
|
59,105
|
|
|
4,330
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
274,830
|
|
|
(81,997
|
)
|
|
256,281
|
|
Total liabilities
|
|
|
29,290
|
|
|
2,909
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
156,656
|
|
|
(29,730
|
)
|
|
159,131
|
|
-
(1)
-
This
column accounts for investments in all subsidiaries of the Company under the equity method.
-
(2)
-
This
column accounts for investments in all subsidiaries of the Company other than the Finance Debt Issuers and the US Pref Issers, on a
combined basis.
-
(3)
-
This
column includes the necessary amounts to present the Company on a consolidated basis.
The Company has elected to comply with Rule 13-01 of Regulation S-X, as adopted by the Commission on March 2, 2020 and set
forth in SEC Release No. 33-10762 (the "Adopting Release") in advance of the effective date of January 4, 2021. As permitted by the
Adopting Release, the Company is omitting financial disclosures with respect to the US LLC Issuer, the AUS Issuer, the UK Issuer and the US Pref Issuer because such subsidiaries have no
significant assets or liabilities, no subsidiaries, no ongoing business operations of their own, are direct or indirect wholly-owned subsidiaries of the Company, and the Company will fully and
unconditionally guarantee the debt or preferred securities issued by each such finance subsidiary issuer. Please see "Description of Debt Securities General"
and "Description of the US Pref Issuer Preferred Shares Guarantee" for additional information about the guarantees.
USE OF PROCEEDS
Unless otherwise indicated in a Prospectus Supplement, the net proceeds from the sale of Securities by the Issuers will be used for
general corporate purposes.
DESCRIPTION OF CAPITAL STRUCTURE OF THE ISSUERS
The Company's authorized share capital consists of an unlimited number of preference shares designated as Class A Preference
Shares, issuable in series, an unlimited number of preference shares designated as Class AA Preference Shares, issuable in series, an unlimited number of Class A Shares,
and 85,120 Class B Limited Voting Shares ("Class B Shares"). As of the date of this Prospectus, the Company had 10,457,685 Class A Preference Shares, Series 2;
3,995,910 Class A Preference Shares, Series 4; 2,476,185 Class A Preference Shares, Series 8; 5,515,981 Class A Preference Shares, Series 9; 9,640,096
Class A Preference Shares, Series 13; 2,000,000 Class A Preference Shares, Series 15; 7,840,204 Class A Preference Shares, Series 17; 7,866,749 Class A
Preference Shares, Series 18; 9,278,894 Class A Preference Shares, Series 24; 1,529,133 Class A Preference Shares, Series 25; 9,770,928 Class A Preference
Shares, Series 26; 9,233,927 Class A Preference Shares, Series 28; 9,787,090 Class A Preference Shares, Series 30; 11,750,299 Class A Preference Shares,
Series 32; 9,876,735 Class A Preference Shares, Series 34; 7,842,909 Class A Preference Shares, Series 36; 7,830,091 Class A Preference Shares,
Series 37; 7,906,132 Class A Preference Shares, Series 38; 11,841,025 Class A Preference Shares, Series 40; 11,887,500 Class A Preference Shares,
Series 42; 9,831,929 Class A Preference Shares, Series 44; 11,740,797 Class A Preference Shares, Series 46; 11,885,972 Class A Preference Shares,
Series 48; 1,575,004,153 Class A Shares; and 85,120 Class B Shares issued and outstanding.
BFI's
authorized share capital consists of an unlimited number of common shares, an unlimited number of preference shares designated as Class A Preference Shares, issuable in
series, and an unlimited number of preference shares designated as Class B Preference Shares, issuable in series. As of the date of this Prospectus, BFI had 389,181 common shares; 6,400,000
Class A Preference Shares, Series 1; and 54,262,400 Class B Preference Shares, Series 1 issued and outstanding.
4
The
US LLC Issuer's authorized share capital consists of an unlimited number of common shares representing limited liability company interests. As of the date of this Prospectus,
101 common shares of the US LLC Issuer are issued and outstanding.
BFI
II's authorized share capital consists of an unlimited number of common shares. As of the date of this Prospectus, 100 common shares of BFI II are issued and outstanding.
The
AUS Issuer's authorized share capital consists of an unlimited number of ordinary shares. As of the date of this Prospectus, 10 ordinary shares of the AUS Issuer are issued
and outstanding.
The
UK Issuer's share capital consists of ordinary shares. As of the date of this Prospectus, 50,000 ordinary shares of the UK Issuer are issued and outstanding.
The
US Pref Issuer's authorized share capital consists of an unlimited number of common shares and preferred shares representing limited liability company interests. As of the date of
this Prospectus, 100 common shares representing limited liability company interests of the US Pref Issuer are issued and outstanding.
DESCRIPTION OF THE BAM PREFERENCE SHARES
The following description sets forth certain general terms and provisions of the BAM Preference Shares. The particular terms and
provisions of a series of BAM Preference Shares offered by a Prospectus Supplement, and the extent to which the general terms and provisions described below may apply thereto, will be described in
such Prospectus Supplement.
Series
The BAM Preference Shares may be issued from time to time in one or more series. The board of directors of the Company will fix the
number of shares in each series and the provisions attached to each series before issue.
Priority
The BAM Preference Shares rank senior to the Class AA Preference Shares, the Class A Shares, the Class B Shares
and other shares ranking junior to the BAM Preference Shares with respect to priority in the payment of dividends and in the distribution of assets in the event of the liquidation, dissolution or
winding-up of the Company, whether voluntary or involuntary, or in the event of any other distribution of assets of the Company among its shareholders for the purpose of winding-up its affairs. Each
series of BAM Preference Shares ranks on a parity with every other series of BAM Preference Shares with respect to priority in the payment of dividends and in the distribution of assets in the event
of the liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, or in the event of any other distribution of assets of the Company among its shareholders for the
purpose of winding-up its affairs.
Shareholder Approvals
The Company shall not delete or vary any preference, right, condition, restriction, limitation or prohibition attaching to the BAM
Preference Shares as a class or create preference shares ranking in priority to or on parity with the BAM Preference Shares except by special resolution passed by at least 662/3% of the
votes cast at a meeting of the holders of the BAM Preference Shares duly called for that purpose, in accordance with the provisions of the articles of the Company. Each holder of BAM Preference Shares
entitled to vote at a class meeting of holders of BAM Preference Shares, or at a joint meeting of the holders of two or more series of BAM Preference Shares, has one vote in respect of each C$25.00 of
the issue price of each BAM Preference Share held by such holder.
5
DESCRIPTION OF THE CLASS A SHARES
The following description sets forth certain general terms and provisions of the Class A Shares. The particular terms and
provisions of Class A Shares offered by a Prospectus Supplement, and the extent to which the general terms and provisions described below may apply thereto, will be described in such Prospectus
Supplement.
Dividend Rights and Rights Upon Dissolution or Winding-Up
The Class A Shares rank on parity with the Class B Shares and rank after the BAM Preference Shares, the Class AA
Preference Shares and any other senior-ranking shares outstanding from time to time with respect to the payment of dividends (if, as and when declared by the board of directors of the Company) and
return of capital on the liquidation, dissolution or winding-up of the Company or any other distribution of the assets of the Company among its shareholders for the purpose of winding up
its affairs.
Voting Rights
Except as set out below under " Election of Directors", each holder of a Class A Share and
Class B Shares is entitled to notice of, and to attend and vote at, all meetings of the Company's shareholders (except meetings at which only holders of another specified class or series of
shares are entitled to vote) and is entitled to cast one vote per share held, which results in the Class A Shares and Class B Shares each controlling 50% of the aggregate voting rights
of the Company. Subject to applicable law and in addition to any other required shareholder approvals, all matters approved by shareholders (other than the election of directors), must be approved by:
(i) a majority or, in the case of matters that require approval by a special resolution of shareholders, at least 662/3%, of the votes cast by holders of Class A Shares
who vote in respect of the resolution or special resolution, as the case may be, and (ii) a majority or, in the case of matters that require approval by a special resolution of shareholders, at
least 662/3%, of the votes cast by holders of Class B Shares who vote in respect of the resolution or special resolution, as the case may be.
Election of Directors
In the election of directors, holders of Class A Shares, together, in certain circumstances, with the holders of certain series
of BAM Preference Shares, are entitled to elect one-half of the board of directors of the Company, provided that if the holders of BAM Preference Shares, Series 2 become entitled to elect two
or three directors, as the case may be, the numbers of directors to be elected by holders of Class A Shares, together, in certain circumstances with the holders of BAM Preference Shares, shall
be reduced by the number of directors to be elected by holders of BAM Preference Shares, Series 2. Holders of Class B Shares are entitled to elect the other one-half of the board of
directors of the Company.
Each
holder of Class A Shares has the right to cast a number of votes equal to the number of Class A Shares held by the holder multiplied by the number of directors to be
elected by the holder and the holders of shares of the classes or series of shares entitled to vote with the holder of Class A Shares in the election of directors. A holder of Class A
Shares may cast all such votes in favour of one candidate or distribute such votes among its candidates in any manner the holder of Class A Shares sees fit. Where a holder of Class A
Shares has voted for more than one candidate without specifying the distribution of votes among such candidates, the holder of Class A Shares will be deemed to have divided the holder's votes
equally among the candidates for whom the holder of Class A Shares voted.
DESCRIPTION OF THE US PREF ISSUER PREFERRED SHARES
The US Pref Issuer's limited liability company agreement authorizes its board of managers to establish one or more series of US
Preferred Shares representing limited liability company interests of the US Pref Issuer. The US Pref Issuer's board of managers is able to determine, with respect to any series of US Preferred Shares,
the terms and rights of that series, including:
-
-
the designation of the series;
-
-
the number of preferred shares representing limited liability company interests of the series;
6
-
-
whether distributions, if any, will be cumulative or non-cumulative and the distribution rate of the series;
-
-
the dates at which distributions, if any, will be payable;
-
-
the redemption rights and price or prices, if any, for preferred shares representing limited liability company interests
of the series;
-
-
the terms and amounts of any sinking fund provided for the purchase or redemption of the preferred shares representing
limited liability company interests of the series;
-
-
the amounts payable on preferred shares representing limited liability company interests of the series in the event of our
liquidation or dissolution;
-
-
whether the preferred shares representing limited liability company interests of the series will be convertible into or
exchangeable for interests of any other class or series or any other security of our company or any other entity;
-
-
restrictions on the issuance of preferred shares representing limited liability company interests of the series or of any
shares representing limited liability company interests of any other class or series; and
-
-
the voting rights, if any, of the holders of the preferred shares representing limited liability interests of
the series.
Guarantee
All US Preferred Shares issued by the US Pref Issuer will be fully and unconditionally guaranteed by the Company. Set forth below is a
summary of information concerning the preferred share guarantees that the Company will execute and deliver for the benefit of the holders of any series of preferred shares representing limited
liability company interests offered by the US Pref Issuer. A prospectus supplement will contain more specific information about the terms of the preferred share guarantee.
Pursuant
to each preferred share guarantee, the Company will agree to pay in full, to the holders of US Preferred Shares issued by the US Pref Issuer, the guarantee payments, except to
the extent paid by the US Pref Issuer, as and when due, regardless of any defense, right of set-off or counterclaim which the US Pref Issuer may have or assert. The following payments, without
duplication, with respect to US Preferred Shares, to the extent not paid by the US Pref Issuer, will be subject to the preferred share guarantee:
-
-
any accumulated and unpaid distributions (as described in the applicable share designation) that have been declared
by the board of managers of the US Pref Issuer to be paid on the US Preferred Shares out of funds legally available for such distributions;
-
-
any redemption price (as described in the applicable share designation), plus all accrued and unpaid distributions
to the date of redemption with respect to any US Preferred Shares called for redemption by the US Pref Issuer or otherwise required to be redeemed by the terms of the applicable share
designation; and
-
-
upon a voluntary or involuntary dissolution, winding-up or liquidation of the US Pref Issuer, the aggregate stated
liquidation preference and all accumulated and unpaid distributions, whether or not declared, without regard to whether the US Pref Issuer has sufficient assets to make full payment as required
on liquidation.
The
Company's obligation to make a guarantee payment may be satisfied by direct payment of the required amounts by the Company to the holders of US Preferred Shares or by causing the US
Pref Issuer to pay the amounts to the holders. Each preferred share guarantee will be subordinated to all of the debt of the Company that is not stated to be pari passu or subordinate to the
guarantees and will rank senior to the Class A Shares.
7
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions of the Debt Securities. The particular terms and provisions
of the series of Debt Securities offered by a Prospectus Supplement, and the extent to which the general terms and provisions described below may apply thereto, will be described in such Prospectus
Supplement.
The
BAM Debt Securities will be issued under an indenture dated as of September 20, 1995, as amended, restated, supplemented or replaced from time to time
(the "BAM Indenture"), between the Company, as issuer, and Computershare Trust Company of Canada (formerly, Montreal Trust Company of Canada)
("Computershare Canada"), as trustee (the "BAM Trustee"). The BFI Debt Securities will be issued
under an indenture dated as of June 2, 2016, as amended, restated, supplemented or replaced from time to time, between BFI, as issuer, the Company, as guarantor, and Computershare Canada, as
trustee (the "Existing BFI Indenture"), or pursuant to a separate subordinated indenture that the Company and BFI may enter into
(the "New BFI Indenture" and together with the Existing BFI Indenture, the "BFI
Indentures") with Computershare Canada or another trustee named therein (the "BFI Trustee"). The US LLC Debt
Securities will be issued under an indenture dated as of February 21, 2020, as amended, restated, supplemented or replaced from time to time (the "US LLC
Indenture"), between the US LLC Issuer, as issuer, the Company, as guarantor, Computershare Trust Company, N.A., as U.S. trustee
("Computershare U.S."), and Computershare Canada, as Canadian trustee, (the "US LLC
Trustees"). The BFI II Debt Securities will be issued pursuant to an indenture (the "BFI II Indenture") to be entered
into among BFI II, as issuer, the Company, as guarantor, and Computershare Canada or such other trustee named in the indenture, as trustee (the "BFI II
Trustee"). The AUS Issuer Debt Securities will be issued pursuant to an indenture (the "AUS Issuer Indenture") to be
entered into among the AUS Issuer, as issuer, the Company, as guarantor, and Computershare Canada as Canadian trustee and Computershare U.S. as U.S. trustee, or such other trustees named
in the indenture (together, the "AUS Issuer Trustees"). The UK Issuer Debt Securities will be issued pursuant to an indenture
(the "UK Issuer Indenture" and together with the New BFI Indenture, the US LLC Indenture, the BFI II Indenture, and the AUS Issuer
Indenture, the "2020 Indentures") to be entered into among the UK Issuer, as issuer, the Company, as guarantor, and Computershare Canada as Canadian
trustee and Computershare U.S. as U.S. trustee, or such other trustees named in the indenture (together, the "UK Issuer Trustees"). We
refer to the BAM Indenture, the Existing BFI Indenture and the 2020 Indentures as the "Indentures". The Debt Securities may be issued under such other
indentures as the Company, the applicable Finance Debt Issuer and the applicable trustee may enter into in the future. The indenture under which any Debt Securities are issued will be specified in the
applicable Prospectus Supplement.
The
BAM Indenture, the BFI Indentures and the BFI II Indenture are subject to the provisions of the Business Corporations Act (Ontario)
and, consequently, are exempt from the operation of certain provisions of the Trust Indenture Act of 1939 pursuant to Rule 4d-9 thereunder. The
US LLC Indenture, the AUS Issuer Indenture and the UK Issuer Indenture are subject to the Trust Indenture Act of 1939. Executed copies or forms
of the Indentures will or have been filed with the Commission as exhibits to the Registration Statement. Each Indenture is or will also be available on each Issuer's respective SEDAR profile at
www.sedar.com.
The
following statements with respect to the Indentures and the Debt Securities issued or to be issued thereunder are brief summaries of certain provisions of the Indentures and do not
purport to be complete; such statements are subject to the detailed referenced provisions of the applicable Indenture, including the definition of capitalized terms used under this caption. Wherever a
particular section or defined term of an Indenture is referred to, the statement is qualified in its entirety by such section or term. References to the
"Issuer" and "Indenture Securities" refer to the Company and each Finance Debt Issuer, as issuer, and
the Debt Securities issued or to be issued by it under the Indentures. References to the "Trustee" or
"Trustees" and any particular Indenture or Debt Securities refer to the BAM Trustee, the BFI Trustee, the US LLC Trustees, the BFI II Trustee,
the AUS Issuer Trustees or the UK Issuer Trustees as trustee or trustees under the applicable Indenture.
8
General
The Indentures do not limit the aggregate principal amount of Indenture Securities (which may include debentures, notes and other
unsecured evidences of indebtedness) which may be issued thereunder, and Indenture Securities may be issued under each Indenture from time to time in one or more series and may be denominated and
payable in foreign currencies or units based on or relating
to foreign currencies, including European currency units, pounds sterling and Australian dollars. Special Canadian and United States federal income tax considerations applicable to any
Indenture Securities so denominated will be described in the Prospectus Supplement relating thereto. Unless otherwise indicated in the applicable Prospectus Supplement, each Indenture permits the
Company and each Finance Debt Issuer to increase the principal amount of any series of Indenture Securities previously issued by it and to issue such increased principal amount. (Section 301 of
the BAM Indenture, and Section 3.1 of the Existing BFI Indenture and the 2020 Indentures) In the case of additional Debt Securities of a series under the US LLC Indenture, the AUS Issuer
Indenture and the UK Issuer Indenture, issued after the date of original issuance of Debt Securities of such series, if they are not fungible with the original Debt Securities of such series for
U.S. federal income tax purposes, then such additional Debt Securities will be issued with a separate CUSIP or ISIN number so that they are distinguishable from the original Debt Securities of
such series.
All
Debt Securities issued by BFI, the US LLC Issuer, BFI II, the AUS Issuer and the UK Issuer will be fully and unconditionally guaranteed by the Company.
The
applicable Prospectus Supplement will set forth the following terms relating to the particular offered Debt Securities: (1) the specific designation of the offered Debt
Securities and the Indenture under which they are issued; (2) any limit on the aggregate principal amount of the offered Debt Securities; (3) the date or dates, if any, on which the
offered Debt Securities will mature and the portion (if less than all of the principal amount) of the offered Debt Securities to be payable upon declaration of acceleration of maturity;
(4) the rate or rates per annum (which may be fixed or variable) at which the offered Debt Securities will bear interest, if any, the date or dates from which any such interest will accrue and
on which any such interest will be payable and the Regular Record Dates for any interest payable on the offered Debt Securities which are in registered form ("Registered Debt
Securities"); (5) any mandatory or optional redemption or sinking fund provisions, including the period or periods within which the price or prices at which and the
terms and conditions upon which the offered Debt Securities may be redeemed or purchased at the option of the Issuer or otherwise; (6) whether the offered Debt Securities will be issuable in
registered form or bearer form or both and, if issuable in bearer form, the restrictions as to the offer, sale and delivery of the offered Debt Securities in bearer form and as to exchanges between
registered and bearer form; (7) whether the offered Debt Securities will be issuable in the form of one or more registered global securities ("Registered Global
Securities") and, if so, the identity of the Depositary for such Registered Global Securities; (8) the denominations in which any of the offered Debt Securities will be
issuable if in other than denominations of $1,000 and any multiple thereof; (9) each office or agency where the principal of, and any premium and interest on, the offered Debt Securities will
be payable and each office or agency where the offered Debt Securities may be presented for registration of transfer or exchange; (10) if other than U.S. dollars, the foreign currency or
the units based on or relating to foreign currencies in which the offered Debt Securities are denominated and/or in which the payment of the principal of, and any premium and interest on, the offered
Debt Securities will or may be payable; (11) any applicable terms or conditions related to the addition of any co-obligor or additional guarantor in respect of any or all series of Debt
Securities; and (12) any other terms of the offered Debt Securities, including any applicable subordination provisions, exchange or conversion terms, covenants and additional Events of Default.
Special Canadian and United States federal income tax considerations applicable to the offered Debt Securities, the amount of principal thereof and any premium and interest thereon will be
described in the Prospectus Supplement relating thereto. Unless otherwise indicated in the applicable Prospectus Supplement, no Indenture affords the Holders the right to tender Indenture Securities
to the Issuer for repurchase, or provides for any increase in the rate or rates of interest per annum at which the Indenture Securities will bear interest, in the event the Company or any Finance Debt
Issuer should become involved in a highly leveraged transaction or in the event of a change in control of the Company or any Finance Debt Issuer. (Section 301 of the BAM Indenture, and
Section 3.1 of the Existing BFI Indenture and the 2020 Indentures.)
9
Indenture
Securities may be issued bearing no interest or interest at a rate below the prevailing market rate at the time of issuance, to be offered and sold at a discount below their
stated principal amount. The Canadian and United States federal income tax consequences and other special considerations applicable to any such discounted Indenture Securities or other
Indenture Securities offered and sold at par which are treated as having been issued at a discount for Canadian and/or United States federal income tax purposes will be described in the
Prospectus Supplement relating thereto. (Section 301 of the BAM Indenture, and Section 3.1 of the Existing BFI Indenture and the 2020 Indentures.)
The
Indenture Securities will be direct unsecured obligations of the Company and the Finance Debt Issuers and will be unsecured senior or subordinated, as applicable, indebtedness of
each of them as described in the applicable Prospectus Supplement. (Section 301 of the BAM Indenture, and Section 3.1 of the Existing BFI Indenture and the 2020 Indentures.)
The
Company's guarantee of the Indenture Securities issued by the Finance Debt Issuers will be unsecured senior or subordinated, as applicable, indebtedness of the Company, including the
Company's obligations under the Indenture Securities issued under the BAM Indenture.
The
guarantees will be unsecured general obligations of the Company and will rank equal in right of payment with, or junior to, other unsecured and senior or subordinated debt (other
than subordinated debt that has been further subordinated in accordance with its terms), as applicable, of the Company. The Debt Securities and the guarantees will be effectively subordinated to any
secured indebtedness of the applicable Issuer or to the Company to the extent of the value of the assets securing such indebtedness. The guarantee by the Company of the Indenture Securities will
guarantee the due and punctual payment of the principal of, premium, if any, and interest on the Indenture Securities issued by the applicable Issuer, when and as the same shall become due and
payable, whether at maturity, upon redemption, by acceleration or otherwise.
Form, Denomination, Exchange and Transfer
Unless otherwise indicated in the applicable Prospectus Supplement, Indenture Securities will be issued only in fully registered form
without coupons and in denominations of $1,000 or any integral multiple thereof. (Section 302 of the BAM Indenture, and Section 3.2 of the Existing BFI Indenture and 2020 Indentures.)
Indenture Securities may be presented for exchange and Registered Debt Securities may be presented for registration of transfer in the manner, at the places and, subject to the restrictions set forth
in the applicable Indenture and in the applicable Prospectus Supplement, without service charge, but upon payment of any taxes or the governmental charges due in connection therewith. Each Issuer has
or will
appoint, as applicable, their respective Trustees as Security Registrars under each Indenture. (Section 305 of the BAM Indenture, and Section 3.5 of the Existing BFI Indenture and 2020
Indentures.)
Payment
Unless otherwise indicated in the applicable Prospectus Supplement, payment of the principal of, and any premium and interest on,
Registered Debt Securities (other than a Registered Global Security) will be made at the office or agency of the applicable Trustee, in its capacity as paying agent, in Toronto, Canada (in the
case of the BAM Indenture) or New York, New York (in the case of the Existing BFI Indenture and the 2020 Indentures), except that, at the option of the particular Issuer, payment
of any interest may be made (i) by check mailed to the address of the Person entitled thereto at such address as shall appear in the applicable Security Register or (ii) by wire transfer
to an account maintained by the Person entitled thereto as specified in the applicable Security Register. (Sections 305, 307, and 1002 of the BAM Indenture, and Sections 3.5, 3.7
and 11.2 of the Existing BFI Indenture and the 2020 Indentures.) Unless otherwise indicated in the applicable Prospectus Supplement, payment of any interest due on Registered Debt Securities
will be made to the Persons in whose name such Registered Debt Securities are registered at the close of business on the Regular Record Date for such interest payment. (Section 307 of the BAM
Indenture, and Section 3.7 of the Existing BFI Indenture and 2020 Indentures.)
10
Registered Global Securities
The Registered Debt Securities of a particular series may be issued in the form of one or more Registered Global Securities which will
be registered in the name of, and deposited with, one or more Depositories or nominees, each of which will be identified in the Prospectus Supplement relating to such series. Unless and until
exchanged, in whole or in part, for Indenture Securities in definitive registered form, a Registered Global Security may not be transferred except as a whole by the Depositary for such Registered
Global Security to a nominee of such Depositary, by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by such Depositary or any such nominee to a successor of
such Depositary or a nominee of such successor. (Section 305 of the BAM Indenture, and Section 3.5 of the Existing BFI Indenture and 2020 Indenture.)
The
specific terms of the depositary arrangement with respect to any portion of a particular series of Indenture Securities to be represented by a Registered Global Security will be
described in the Prospectus
Supplement relating to such series. We anticipate that the following provisions will apply to all depositary arrangements.
Upon
the issuance of a Registered Global Security, the Depositary therefor or its nominee will credit, on its book entry and registration system, the respective principal amounts of the
Indenture Securities represented by such Registered Global Security to the accounts of such persons having accounts with such Depositary or its nominee
("participants") as shall be designated by the underwriters, investment dealers or agents participating in the distribution of such Indenture Securities
or by the particular Issuer if such Indenture Securities are offered and sold directly by the Issuer. Ownership of beneficial interests in a Registered Global Security will be limited to participants
or persons that may hold beneficial interests through participants. Ownership of beneficial interests in a Registered Global Security will be shown on, and the transfer of such ownership will be
effected only through, records maintained by the Depositary therefor or its nominee (with respect to beneficial interests of participants) or by participants or persons that hold through participants
(with respect to interests of persons other than participants). The laws of some states in the United States require certain purchasers of securities to take physical delivery thereof in
definitive form. Such depositary arrangements and such laws may impair the ability to transfer beneficial interests in a Registered Global Security.
So
long as the Depositary for a Registered Global Security or its nominee is the registered owner thereof, such Depositary or such nominee, as the case may be, will be considered the
sole owner or Holder of the Indenture Securities represented by such Registered Global Security for all purposes under the applicable Indenture. Except as provided below, owners of beneficial
interests in a Registered Global Security will not be entitled to have Indenture Securities of the series represented by such Registered Global Security registered in their names, will not receive or
be entitled to receive physical delivery of Indenture Securities of such series in definitive form and will not be considered the owners or Holders thereof under the applicable Indenture.
Principal,
premium, if any, and interest payments on a Registered Global Security registered in the name of a Depositary or its nominee will be made to such Depositary or nominee, as the
case may be, as the registered owner of such Registered Global Security. None of the particular Issuer or Trustee or any paying agent for Indenture Securities of the series represented by such
Registered Global Security will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, beneficial interests in such Registered Global Security
or for maintaining, supervising or reviewing any records relating to such beneficial interests.
We
expect that the Depositary for a Registered Global Security or its nominee, upon receipt of any payment of principal, premium or interest, will immediately credit participants'
accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of such Registered Global Security as shown on the records of such Depositary or its
nominee. We also expect that payments by participants to owners of beneficial interests in a Registered Global Security held through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of customers registered in "street name", and will be the responsibility of such participants.
No
Registered Global Security may be exchanged in whole or in part for Indenture Securities registered, and no transfer of a Registered Global Security in whole or in part may be
registered, in the name of any Person
11
other
than the Depositary for such Registered Global Security or a nominee thereof unless (A) such Depositary (i) has notified the particular Issuer that it is unwilling or unable to
continue as Depositary for such Registered Global Security or (ii) has ceased to be a clearing agency registered under the Exchange Act, and a successor securities Depositary is not obtained,
(B) there shall have occurred and be continuing an Event of Default with respect to such Registered Global Security, (C) the particular Issuer determines, in its sole discretion, that
the Securities of such series shall no longer be represented by such Registered Global Security and executes and delivers to the applicable Trustee(s) an Issuer order that such Registered Global
Security shall be so exchangeable and the transfer thereof so registerable or (D) there shall exist such circumstances, if any, in addition to or in lieu of the foregoing as have been specified
for this purpose as contemplated in the applicable Indenture. (Section 305 of the BAM Indenture, and Section 3.5.2 of the Existing BFI Indenture and the 2020 Indentures.)
Consolidation, Merger, Amalgamation and Sale of Assets
Pursuant to the BAM Indenture, the Company shall not enter into any transaction (whether by way of reorganization, reconstruction,
consolidation, amalgamation, merger, transfer, sale or otherwise) whereby all or substantially all of its undertaking, property and assets would become the property of any other Person
(the "BAM Successor Corporation") unless: (a) the Company and the BAM Successor Corporation shall have executed, prior to or
contemporaneously with the consummation of such transaction, such instruments and done such things as, in the opinion of counsel, are necessary or advisable to establish that, upon the consummation of
such transaction, (i) the BAM Successor Corporation will have assumed all the covenants and obligations of the Company under the BAM Indenture in respect of the Indenture Securities of every
series issued thereunder, and (ii) the Indenture Securities of every series issued under the BAM Indenture will be valid and binding obligations of the BAM Successor Corporation entitling the
Holders thereof, as against the BAM Successor Corporation, to all the rights of Holders of Indenture Securities under the BAM Indenture; and (b) such transaction shall be on such terms and
shall be carried out at such times and otherwise in such manner as shall not be prejudicial to the interests of the Holders of the Indenture Securities of each and every series or to the rights and
powers of the Trustee under the BAM Indenture. (Section 801 of the BAM Indenture.)
Pursuant
to the Existing BFI Indenture and the 2020 Indentures, neither the applicable Finance Debt Issuer nor the Company (in each case for purposes of this description, a
"Predecessor") shall enter into any transaction (whether by way of reorganization, reconstruction, consolidation, amalgamation, merger, transfer, sale
or otherwise) whereby all or substantially all of its undertaking, property and assets would become the property of any other Person (in each case for purposes of this description, a
"Successor") unless: (a) the Predecessor and the Successor shall have executed, prior to or contemporaneously with the consummation of such
transaction, such instruments and done such things as, in the opinion of counsel, are necessary or advisable to establish that, upon the consummation of such transaction, (i) the Successor will
have assumed all the covenants and obligations of the Predecessor under the applicable Indenture in respect of the Indenture Securities of every series issued thereunder, and in the case of the
Company, its guarantee of the Indenture Securities and, (ii) the Indenture Securities of every series issued by the Predecessor will be valid
and binding obligations of the Successor, entitling the Holders thereof, as against the Successor, to all the rights of Holders of Indenture Securities under the applicable Indenture; and
(b) such transaction shall be on such terms and shall be carried out at such times and otherwise in such manner as shall not be prejudicial to the interests of the Holders of applicable
Indenture Securities of each and every series or to the rights and powers of the applicable Trustee(s) under the applicable Indenture; provided, however, that such restrictions are not applicable to
any sale or transfer by the applicable Finance Debt Issuer or the Company to any one or more of their subsidiaries. (Section 9.1 of the Existing BFI Indenture and the 2020 Indentures.)
Events of Default
Unless otherwise indicated in any Prospectus Supplement, each Indenture provides that the following will constitute an Event of Default
under such Indenture (except subsection (f) below which is not an Event of Default under to the BAM Indenture) with respect to Indenture Securities of any series issued by the Company and each
Finance Debt Issuer: (a) failure to pay principal of, or any premium on, any Indenture Security of that series when due; (b) failure to pay any interest on any Indenture Securities of
that series when due, which failure
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continues
for 30 days; (c) default in the payment of principal and interest on any Indenture Security required to be purchased pursuant to an Offer to Purchase made pursuant to the terms
of the Indenture Securities of such series; (d) failure to deposit any sinking fund payment, when due, in respect of any Indenture Security of that series; (e) failure of any Finance
Debt Issuer and/or the Company to perform, as applicable, any other covenant in the relevant Indenture (other than a covenant included in such indentures solely for the benefit of a series other than
that series), which failure continues for 60 days after written notice has been given by the respective Trustee or the Holders of at least 25% in aggregate principal amount of Outstanding
Securities of that series, as provided in the relevant Indenture; (f) the Company's guarantee of all obligations related to that series shall, for any reason, cease to be, or the Company shall
assert in writing to the relevant Trustee or the Holders thereof that such guarantee is not in full force and effect and enforceable against the Company in accordance with its terms;
(g) certain events of bankruptcy, insolvency or reorganization affecting the Company and/or the Finance Debt Issuers; and (i) any other Events of Default provided with respect to the
Indenture Securities of such series, as described in the applicable Prospectus Supplement. (Section 501 of the BAM Indenture, and Section 6.1 of the Existing BFI Indenture and the 2020
Indentures.)
The
following also constitutes an Event of Default under the Existing BFI Indenture and the BAM Indenture: failure by the Company to make any payment of principal of, or interest on, any
obligation for borrowed money (other than an obligation payable on demand or maturing less than 12 months from the creation or issue thereof) when due or within any originally stated applicable
grace period having an outstanding principal amount in excess of 5% of the Company's Consolidated Net Worth in the aggregate at the time of default or any failure in the performance of any other
covenant of the Company contained in any instrument under which such obligations are created or issued and if the holders thereof, or a trustee, if any, for such holders declare such obligations to be
due and payable prior to the stated maturities thereof,
provided that if such default is waived by such holders or trustee, then the Event of Default under the Existing BFI Indenture and the BAM Indenture shall be deemed to be waived without further action
on the part of the applicable Trustee or the Holders. (Section 501 of the BAM Indenture and Section 6.1 of the Existing BFI Indenture.)
If
an Event of Default (other than an Event of Default related to certain events of bankruptcy, insolvency or reorganization affecting the Company and any Finance Debt Issuer, and the
Company in its capacity as guarantor under the applicable Indenture of each Finance Debt Issuer) with respect to the Indenture Securities of any series at the time outstanding shall occur and be
continuing either the applicable Trustee(s) or the Holders of at least 25% in aggregate principal amount of Outstanding Securities of that series by notice, as provided in the applicable Indenture,
may declare the principal amount of the Indenture Securities of that series to be due and payable immediately. If an Event of Default related to certain events of bankruptcy, insolvency or
reorganization affecting any Issuer occurs with respect to the Indenture Securities of any series at the time outstanding, the principal amount of all the Indenture Securities of that series will
automatically, and without any action by the applicable Trustee or any Holder, become immediately due and payable. After any such acceleration, but before a judgment or decree based on acceleration,
the Holders of a majority in aggregate principal amount of the Outstanding Securities of that series may, under certain circumstances, rescind and annul such acceleration if all Events of Default,
other than the non-payment of accelerated principal (or other specified amount), have been cured or waived as provided in the applicable Indenture. (Section 502 of the BAM Indenture,
Section 6.2 of the Existing BFI Indenture and the 2020 Indentures.) For information as to waiver of defaults, see " Modification and Waiver".
Each
Indenture provides that the applicable Trustee(s) will be under no obligation to exercise any of its rights or powers under the applicable Indenture (or, in the case of the Existing
BFI Indenture and the 2020 Indentures, commence or continue any act, action or proceeding for enforcing any rights of the Trustee(s)) at the request or direction of any of the applicable Holders,
unless such Holders shall have offered to such Trustee(s) reasonable indemnity (or, in the case of the Existing BFI Indenture and the 2020 Indentures, sufficient funds to commence or continue
compliance with such request and an indemnity to protect the Trustee(s) against losses suffered in compliance with such request). (Section 603 of the BAM Indenture, Section 7.5 of the
Existing BFI Indenture and the 2020 Indentures.) Subject to such provisions for the indemnification of the particular Trustee(s), the Holders of a majority in aggregate principal amount of the
Outstanding Securities of any series issued under the applicable Indenture will have the right to direct the time, method and place of conducting any proceeding for any remedy available to such
Trustee(s) or exercising any
13
trust
or power conferred on such Trustee(s) with respect to the Indenture Securities of that series. (Section 512 of the BAM Indenture and Section 6.12 of the Existing BFI Indenture and
the 2020 Indentures.)
No
Holder of an Indenture Security of any series will have any right to institute any proceeding with respect to the particular Indenture, or for the appointment of a receiver or a
trustee, or for any other remedy thereunder, unless (i) such Holder has previously given to the applicable Trustee(s) written notice of a continuing Event of Default with respect to the
Indenture Securities of that series, (ii) the Holders of at least 25% in aggregate principal amount of the Outstanding Securities of that series have made a written request,
and such Holder or Holders have offered reasonable indemnity, or in the case of the US LLC Indenture, the AUS Issuer Indenture and the UK Issuer Indenture, indemnity reasonably satisfactory to
each Trustee, to the applicable Trustee(s) to institute such proceeding as trustee, and (iii) the applicable Trustee(s) has failed to institute such proceeding, and has not received from the
Holders of a majority in aggregate principal amount of the Outstanding Securities of that series a direction inconsistent with such request, within 60 days after such notice, request and
offer. (Section 507 of the BAM Indenture, Section 6.7 of the Existing BFI Indenture and the 2020 Indentures.) However, such limitations do not apply to a suit instituted by a Holder of
an Indenture Security for the enforcement of payment of the principal of, or of any premium or interest on, such Indenture Security on or after the applicable due date specified in such Indenture
Security. (Section 508 of the BAM Indenture, Section 6.8 of the Existing BFI Indenture and the 2020 Indentures.)
The
Company and each Finance Debt Issuer are each required to furnish to their respective Trustees a quarterly statement by certain of its officers as to whether or not each Issuer, as
applicable, to their knowledge, is in default in the performance or observance of any of the terms, provisions and conditions of the applicable Indenture and, if so, specifying all such known
defaults. (Section 1004 of the BAM Indenture, and Section 11.4 of the Existing BFI Indenture and 2020 Indentures.) In addition, the US LLC Issuer, AUS Issuer and UK Issuer are or
will be required to deliver an annual compliance certificates as required under the Trust Indenture Act. (Section 11.4(d) of the US LLC Indenture, AUS Issuer Indenture and the UK Issuer
Indenture.)
Defeasance
Each Indenture provides that, at the option of the applicable Issuer, the Issuer and, in the case of the Existing BFI Indenture and the
2020 Indentures, the Company will be discharged from any and all obligations in respect of any Outstanding Securities upon irrevocable deposit with the applicable Trustee(s), in trust, of money and/or
Government Obligations which will provide money in an amount sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of or premium, if any,
and each instalment of interest, if any, on such Outstanding Securities ("Defeasance"). Such trust may only be established if certain customary
conditions precedent are satisfied, including, among other things, confirmation that Holders will not recognize gain or loss for U.S. federal income tax purposes as a result of such Defeasance.
The Issuer may exercise its Defeasance option notwithstanding its prior exercise of its Covenant Defeasance (as defined below) option described in the following paragraph if the Issuer meets
the conditions precedent at the time the Issuer exercises the Defeasance option.
Each
Indenture provides that, at the option of the Issuer, unless and until the Issuer has exercised its Defeasance option described in the preceding paragraph, the Issuer may omit to
comply with certain restrictive covenants and such omission shall not be deemed to be an Event of Default under the Indenture and the Outstanding Securities upon irrevocable deposit with the
applicable Trustee(s), in trust, of money and/or Government Obligations which will provide money in an amount sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of and premium, if any, and each instalment of interest, if any, on the Outstanding Securities of the Issuer ("Covenant
Defeasance"). In the event the Issuer exercises its Covenant Defeasance option, the obligations under the applicable Indenture (other than with respect to such covenants and
the Events of Default other than the Events of Default relating to such covenants above) shall remain in full force and effect. Such trust may only be established if certain customary conditions
precedent are satisfied, including, among other things,
confirmation that Holders will not recognize gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance. (Article Thirteen of the BAM Indenture, Article Fourteen
of the Existing BFI Indenture and the 2020 Indentures.)
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Modification and Waiver
Modifications and amendments of an Indenture may be made by the Company, the Issuer (if other than the Company) and the
applicable Trustee(s) with the consent of the Holders of a majority in aggregate principal amount of the Outstanding Securities of each series of Indenture Securities affected by such modification or
amendment; provided, however, that no such modification or amendment may, without the consent of the Holder of each Outstanding Security affected thereby, (a) change the Stated Maturity of the
principal of, or any instalment of interest on, any Outstanding Security, (b) reduce the principal amount of (or the premium), or interest on, any Outstanding Security, (c) reduce
the amount of the principal of any Outstanding Security payable upon the acceleration of the maturity thereof, (d) change the place or currency of payment of principal of (or the
premium), or interest on, any Outstanding Security, (e) impair the right to institute suit for the enforcement of any payment on or with respect to any Outstanding Security, (f) reduce
the above-stated percentage of Outstanding Securities necessary to modify or amend the particular Indenture, (g) reduce the percentage of aggregate principal amount of Outstanding Securities
necessary for waiver of compliance with certain provisions of the particular Indenture or for waiver of certain defaults, (h) modify any provisions of the particular Indenture relating to the
modification and amendment of such Indenture or the waiver of past defaults or covenants, except as otherwise specified, (i) in the case of the New BFI Indenture, modify the provisions of the
indenture relating to subordination in a manner that adversely affects the rights of Holders of Indenture Securities, or (j) following the mailing of any Offer to Purchase, modify any Offer to
Purchase for such Outstanding Security required to be made pursuant to the terms of such Outstanding Security in a manner materially adverse to the Holders thereof. (Section 902 of the BAM
Indenture and Section 10.2 of the Existing BFI Indenture and 2020 Indentures.) In the case of the US LLC Indenture, AUS Issuer Indenture and the UK Issuer Indenture, no such modification
or waiver may, without consent of the Holder of each Outstanding Security affected thereby, (a) change the premium payable upon redemption thereof, or the dates or times fixed for redemption,
or (b) release the Company from its Guarantee under the US LLC Indenture, AUS Issuer Indenture or UK Issuer Indenture, respectively.
Each
Indenture provides that the Company or the Issuer (if other than the Company) may modify and amend such Indenture without the consent of any holder of Indenture Securities
for any of the following purposes: (a) to evidence the succession of another person to the Issuer or the Company, as applicable, and the assumption by any such successor of the covenants of the
Issuer or the Company, as applicable, under such Indenture and in the Indenture Securities; (b) in the case of the 2020 Indentures, to evidence the addition of a co-obligor or guarantor in
respect of any or all series of the Indenture Securities under the 2020 Indentures, as may be permitted in accordance with the terms of such Indenture Securities; (c) to add to the covenants of
the Finance Debt Issuer or the Company, as applicable, for the benefit of the holders of any series of Indenture Securities (and if such covenants are to be for the benefit of less than all
series of
Indenture Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power (but not, in the case of the
US LLC Indenture, the AUS Issuer Indenture and UK Issuer Indenture, any obligation, except any obligation concomitant to such right or power) in such Indenture conferred upon the Finance Debt
Issuer or the Company, as applicable; (d) to add any additional Events of Default for the benefit of the holders of all or any series of Indenture Securities (and if such additional
Events of Default are to be for the benefit of less than all series of Indenture Securities, stating that such additional Events of Default are expressly being included solely for the benefit of such
series); (e) to add to, change or eliminate any of the provisions of such Indenture in respect of one or more series of Indenture Securities, provided that any such addition, change or
elimination (i) shall neither (A) apply to any Indenture Security of any series created prior to the execution of the applicable supplemental indenture and entitled to the benefit of
such provision nor (B) modify the rights of the holder of any such Indenture Security with respect to such provision or (ii) shall become effective only when there is no such Indenture
Security outstanding; (f) to secure the Indenture Securities pursuant to the requirements of any provision in such Indenture or any indenture supplemental thereto or otherwise; (g) to
establish the form or terms of Indenture Securities of any series as permitted under the Indenture and, in the case of the Existing BFI Indenture and the 2020 Indentures, if required, to provide for
the appointment of a co-trustee; (h) to evidence and provide for the acceptance of appointment under such Indenture by a successor trustee with respect to the Indenture Securities of one or
more series and to add to or change any of the provisions in such Indenture as shall be necessary to provide for or facilitate the administration of the trusts thereunder by more than one trustee,
pursuant to the requirements of such
15
Indenture;
(i) to add to or change any of the provisions of such Indenture to such extent as shall be necessary to permit or facilitate the issuance of Indenture Securities in bearer form,
registrable or not registrable as to principal, and with or without interest coupons, or to permit or facilitate the issuance of Indenture Securities in uncertificated form; (j) in the case of
the US LLC Indenture, the AUS Issuer Indenture and the UK Issuer Indenture, to comply with any requirements of the Trust Indenture Legislation including without limitation in connection with
qualifying, or maintaining the qualification of, the US LLC Indenture, the AUS Issuer Indenture or the UK Issuer Indenture, as applicable, under the Trust Indenture Act
1939; or (k) to cure any ambiguity, to correct or supplement any provision in such Indenture which may be defective or inconsistent with any other provision therein, or
to make any other provisions with respect to matters or questions arising thereunder, provided that such action shall not adversely affect, in the case of the Existing BFI Indenture and the 2020
Indentures, in any material respect, the interests of the holders of Indentures Securities of any series. (Section 901 of the BAM Indenture and Section 10.1 of the Existing BFI Indenture
and the 2020 Indentures.)
The
Holders of a majority in aggregate principal amount of the Outstanding Securities of any series, on behalf of all Holders of Outstanding Securities of such series, may waive
compliance by the Issuer with certain restrictive provisions of the particular Indenture. (Section 1009 of the BAM Indenture, Section 11.10 of the Existing BFI Indenture and the 2020
Indentures.) Subject to certain rights of the particular Trustee, as provided in the applicable Indenture, the Holders of a majority in aggregate principal amount of the Outstanding Securities issued
under such Indenture, on behalf of all holders of Outstanding Securities of such series, may waive any past default under such Indenture, except a default in the payment of principal, premium or
interest or in respect of a covenant or provision of such Indenture which under the Indenture cannot be modified or amended without the consent of the Holder of each Outstanding Security of such
series affected. (Section 513 of the BAM Indenture, Section 6.13 of the Existing BFI Indenture and the 2020 Indentures.)
Consent to Jurisdiction and Service under BAM Indenture
The BAM Indenture provides that the Company irrevocably appoints CT Corporation System, 1633 Broadway, New York,
New York, 10019, as its agent for service of process in any suit, action or proceeding arising out of or relating to the BAM Indenture and the Indenture Securities and for actions brought under
federal or state securities laws brought in any federal or state court located in the Borough of Manhattan in the City of New York and submit to such jurisdiction.
Consent to Jurisdiction and Service under the Exiting BFI Indenture and the 2020 Indentures
The Existing BFI Indenture and the 2020 Indentures provide, or will provide, that the Finance Debt Issuers irrevocably appoint
Brookfield Asset Management LLC, Brookfield Place, 250 Vesey Street, 15th Floor, New York, NY 10281-1023, as their agent for service of process in any suit, action or
proceeding arising out of or relating to the relevant Indenture and the Indenture Securities and for actions brought under federal or state securities laws brought in any federal or state court
located in the Borough of Manhattan in the City of New York and submit to such jurisdiction.
Enforceability of Judgments against the Company
Since a substantial portion of the Company's assets are outside the United States, any judgment obtained in the
United States against the Company, including any judgment with respect to the payment of interest and principal on the Indenture Securities, may not be collectible within the
United States.
The
Company has been informed by its Canadian counsel, Torys LLP ("Torys"), that a court of competent jurisdiction in the Province
of Ontario would enforce a final and conclusive judgment in personam of a court sitting in the Borough of Manhattan, the City of New York,
New York (a "New York Court") that is subsisting and unsatisfied respecting the enforcement of any of the Indentures and the
Indenture Securities that is not impeachable as void or voidable under the internal laws of the State of New York for a sum certain if: (i) the court rendering such judgment had
jurisdiction over the judgment debtor, as recognized by the courts of the Province of Ontario (and submission by the Company in the Indenture to the jurisdiction of the New York Court
will be sufficient for the purpose); (ii) such judgment was not obtained by fraud or in a manner contrary to natural justice and the enforcement thereof would not be inconsistent with public
policy, as such term is
16
understood
under the laws of the Province of Ontario, or contrary to any order made by the Attorney General of Canada under the Foreign Extraterritorial Measures
Act (Canada); (iii) the enforcement of such judgment does not constitute, directly or indirectly, the enforcement of foreign revenue or penal laws; and (iv) the
action to enforce such judgment is commenced within the applicable limitation period. The Company has been advised by Torys that a monetary judgment of a New York Court predicated solely upon
the civil liability provisions of United States federal securities laws would likely be enforceable in the Province of Ontario if the New York Court had a basis for jurisdiction in the
matter that would be recognized by a court in Ontario for such purposes. There is no assurance that this will be the case. It is less certain that an action could be brought in the Province of Ontario
in the first instance on the basis of liability predicated solely upon such laws.
Governing Law
The Indentures, Indenture Securities and the rights, powers, duties or responsibility of Computershare U.S. will be governed by
the laws of the State of New York, except with respect to the rights, powers, duties or responsibility of the remaining Trustees (including Computershare Canada) which shall be governed by the
laws of the Province of Ontario and the federal laws of Canada applicable therein. (Section 113 of the BAM Indenture and Section 1.13 of the Existing BFI Indenture and the 2020
Indentures.)
The Trustees
Computershare Canada is currently, or is expected to be, the BAM Trustee, the BFI Trustee, the BFI II Trustee and the Canadian trustee
under the US LLC Indenture, the AUS Issuer Indenture and the UK Issuer Indenture. Computershare U.S. is, or is expected to be, the U.S. trustee under the US LLC Indenture,
the AUS Issuer Indenture and the UK Issuer Indenture.
Certain Definitions
Set forth below is a summary of certain of the defined terms used in the Indentures. Reference is made to each Indenture for the full
definition of each such term, as well as any other terms used herein for which no definition is provided. (Section 101 of the BAM Indenture and Section 1.1 of the Existing BFI Indenture
and the 2020 Indentures, as applicable)
"affiliate" of any Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common
control with such Person. For the purposes of this definition, "control", when used with respect to any Person, means the power to influence the
management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" having meanings correlative to the foregoing.
"Capital Lease Obligation" of any Person means the obligation to pay rent or other payment amounts under a lease of (or other Debt
arrangements conveying the right to use) real or personal property of such Person which is required to be classified and accounted for as a capital lease or a liability on the face of a balance sheet
of such Person in accordance with generally accepted accounting principles and which has a term of at least 36 months. The stated maturity of such obligation shall be the date of the last
payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a penalty.
"Capital Stock" of any Person means any and all shares, interests, participations or other equivalents (however designated) of corporate
stock or other equity participations, including partnership interests whether general or limited, of such Person, and, in the case of the Existing BFI Indenture and 2020 Indentures including units of
such Person.
"Common Stock" of any Person means Capital Stock of such Person that does not rank prior, as to the payment of dividends or as to the
distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding-up of such Person, to shares of Capital Stock of any other class of such Person.
"Consolidated Net Worth" of any Person means the consolidated stockholders' equity of such Person, determined on a consolidated basis in
accordance with Canadian generally accepted accounting principles, plus, without duplication, Qualifying Subordinated Debt and Deferred Credits; provided that with respect to the
17
BAM
Indenture, adjustments following the date of the BAM Indenture to the accounting books and records of the Company in accordance with U.S. Accounting Principles Board Opinions Nos. 16
and 17 (or successor opinions thereto), or comparable standards in Canada, or otherwise resulting from the acquisition of control of the Company by another Person shall not be
given effect.
"Debt" means (without duplication), with respect to any Person, whether recourse is to all or a portion of the assets of such Person and
whether or not contingent, (i) every obligation of such Person for money borrowed, (ii) every obligation of such Person evidenced by bonds, debentures, notes or other similar
instruments, including obligations incurred in connection with the acquisition of property, assets or businesses, (iii) every reimbursement obligation of such Person with respect to letters of
credit, bankers' acceptances or similar facilities issued for the account of such Person, (iv) every obligation of such Person issued or assumed as the deferred purchase price of property or
services (but excluding trade accounts payable or accrued liabilities arising in the ordinary course of business which are not overdue or which are being contested in good faith),
(v) every Capital Lease Obligation of such Person, (vi) every obligation that could not be considered as interest in accordance with Canadian generally accepted accounting principles
under Interest Rate or Currency Protection Agreements of such Person and (vii) every obligation of the type referred to in clauses (i) through (vi) of another Person and all
dividends of another Person the payment of which, in either case, such Person has Guaranteed or is responsible or liable for, directly or indirectly, as obligator, Guarantor or otherwise.
"Deferred Credits" means the deferred credits of the Company (or, in the case of the Existing BFI Indenture, any Person) and its
Subsidiaries determined on a consolidated basis in accordance with Canadian generally accepted accounting principles.
"Government Obligation" means (x) any security which is (i) a direct obligation of the government which issued the currency,
or a direct obligation of the Government of Canada issued in such currency, in which the Indenture Securities of a particular series are denominated for the payment of which its full faith and credit
is pledged or (ii) obligations of a Person the payment of which is unconditionally guaranteed as its full faith and credit obligation by such government which, in the case of either
subclause (i) or (ii) of this clause (x), is not callable or redeemable at the option of the issuer thereof and (y) any depositary receipt issued by a bank
(as defined in Section 3(a)(2) of the Securities Act, or, in the case of the Existing BFI Indenture and the 2020 Indentures, as defined in the Bank
Act (Canada)), as custodian with respect to any Government Obligation which is specified in clause (x) above and held by such bank for the account of the holder of such
depositary receipt, or with respect to any specific payment of principal of or interest on any Government Obligation which is so specified and held, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the Government Obligation or
the specific payment of principal or interest evidenced by such depositary receipt.
"Guarantee" by any Person means any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Debt of any other Person (the "primary obligor") in any manner, whether directly or indirectly, and including, without
limitation, any obligation of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or to purchase (or to advance or supply
funds for the purchase of) any security for the payment of such Debt, (ii) to purchase
property, securities or services for the purpose of assuring the holder of such Debt of the payment of such Debt or (iii) to maintain working capital, equity capital or other financial
statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Debt (and "Guaranteed",
"Guaranteeing" and "Guarantor" shall have meanings correlative to the foregoing); provided, however,
that the Guarantee by any Person shall not include endorsements by such Person for collection or deposit, in either case, in the ordinary course of business.
"Holder" means a Person in whose name a Security is registered in the applicable Security Register.
"Interest Rate or Currency Protection Agreement" of any Person means any interest rate protection agreement (including, without
limitation, interest rate swaps, caps, floors, collars and similar agreements), and/or other types of interest hedging agreements, and any currency protection agreement (including foreign exchange
contracts, currency swap agreements or other currency hedging arrangements).
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"Qualifying Subordinated Debt" means Debt of the Company (i) which by its terms provides that the payment of principal of
(and premium, if any) and interest on and all other payment obligations in respect of such Debt shall be subordinate to the prior payment in full of the Company's obligations in respect of the
Indenture Securities to at least the extent that no payment of principal of (or premium, if any) or interest on or otherwise due in respect of such Debt may be made for so long as there exists
any default in the payment of principal (or premium, if any) or interest on the Indenture Securities or any other default that, with the passing of time or the giving of notice or both, would
constitute an event of default with respect to the Indenture Securities and (ii) which expressly by its terms gives the Company the right to make payments of principal in respect of such Debt
in Common Stock of the Company.
"Stated Maturity", when used with respect to any Indenture Security or any instalment of principal thereof or interest thereon, means the
date specified in such Indenture Security as the fixed date on which the principal of such Indenture Security or such instalment of principal or interest is due and payable.
"Trust Indenture Legislation" means, at any time, (i) the provisions of the Business Corporations
Act (Ontario) and regulations thereunder as amended or re-enacted from time to time, (ii) the provisions of any other statute of Canada or any province thereof and any
regulations thereunder and (iii) the U.S. Trust Indenture Act 1939 and regulations thereunder, but, in the case of (i) the BAM
Indenture and the Existing BFI Indenture, only to the extent applicable under Rule 4d-9 under the U.S. Trust Indenture Act 1939 and
(ii) the New BFI Indenture and the BFI II Indenture, only to the extend applicable to that indenture, in each case relating to trust indentures and to the rights, duties, and obligations
of trustees under trust indentures and of corporations issuing debt obligations under trust indentures.
PLAN OF DISTRIBUTION
The Issuers may sell Securities to or through underwriters or dealers and also may sell Securities directly to purchasers or
through agents.
The
distribution of Securities of any series may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed, at market prices prevailing
at the time of sale, at prices related to such prevailing market prices or at prices to be negotiated with purchasers.
In
connection with the sale of Securities, underwriters may receive compensation from the Issuers or from purchasers of Securities for whom they may act as agents in the form of
concessions or commissions. Underwriters, dealers and agents that participate in the distribution of Securities may be deemed to be underwriters and any commissions received by them from the Issuers
and any profit on the resale of Securities by them may be deemed to be underwriting commissions under the Securities Act. Any such person that may be deemed to be an underwriter with respect to
Securities of any series will be identified in the Prospectus Supplement relating to such series.
The
Prospectus Supplement relating to each series of Securities will also set forth the terms of the offering of the Securities of such series, including, to the extent applicable,
(i) the names of any underwriters or agents, (ii) the purchase price or prices of the offered Securities, (iii) the initial offering price, (iv) the proceeds to the
applicable Issuer from the sale of the offered Securities, (v) the underwriting discounts and commissions and (vi) any discounts, commissions and concessions allowed or reallowed or paid
by any underwriter to other dealers.
Under
agreements which may be entered into by the Issuers, underwriters, dealers and agents who participate in the distribution of Securities may be entitled to indemnification by the
Issuers against certain liabilities, including liabilities under the Securities Act and Canadian provincial securities legislation, or to contribution with respect to payments which those
underwriters, dealers or agents may be required to make in respect thereof. Those underwriters, dealers and agents may be customers of, engage in transactions with or perform services for the Issuers
or their subsidiaries in the ordinary course of business. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of
the Issuers, the Issuers have been advised that, in the opinion of the Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than the payment by the Issuers of expenses
19
incurred
or paid by a director, officer or controlling person of the Issuers in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in
connection with the
securities being registered, the Issuers will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
Unless
otherwise specified in a Prospectus Supplement, each series or class of Securities will be a new issue of securities with no established trading market. Unless otherwise specified
in a Prospectus Supplement relating to a series or class of Securities, the Securities will not be listed on any securities exchange. Certain broker-dealers may make a market in Securities but will
not be obligated to do so and may discontinue any market making at any time without notice. No assurance can be given that any broker-dealer will make a market in the Securities of any series or as to
the liquidity of the trading market for the Securities of any series.
In
connection with any underwritten offering of Securities, the underwriters or agents may over-allot or effect transactions which stabilize or maintain the market price of the
Securities offered at a level above that which might otherwise prevail in the open market. Such transactions, if commenced, may be discontinued at any time.
EXEMPTIVE RELIEF
Pursuant to a decision document dated October 18, 2011 issued by the applicable securities regulators, the Company was granted
exemptive relief from certain of the restricted securities requirements in National Instrument 51-102 Continuous Disclosure
Obligations, NI 41-101 and Ontario Securities Commission Rule 56-501 Restricted
Shares (collectively, the "restricted security provisions"), including the requirements to refer to the Class A Shares
and the Class B Shares using a prescribed restricted security term. The Class A Shares and Class B Shares may qualify as "restricted securities" under the restricted security
provisions because the Company's constating documents contain provisions that restrict the voting rights of such securities in any election of the board of directors of the Company. See "Description
of the Class A Shares".
LEGAL MATTERS
Unless otherwise specified in a Prospectus Supplement, certain matters of Canadian and United States law relating to the
validity of the Securities will be passed upon for the Company by Torys in Toronto, Ontario, and New York, New York, with respect to English law, by Herbert Smith Freehills LLP
("HSF") in London, England and with respect to Australian law, by King & Wood Mallesons ("KWM")
in Sydney, Australia. The partners and associates of Torys, as a group, the partners and associates of HSF, as a group, and the partners and associates of KWM, as a group, beneficially own, directly
or indirectly, less than one percent of the outstanding securities of the Company.
EXPERTS
The financial statements incorporated in this Prospectus by reference from the Company's Annual Report on Form 40-F
and the effectiveness of the Company's internal control over financial reporting have been audited by Deloitte LLP, an independent registered public accounting firm, as stated in their
reports, which are incorporated herein by reference. Such financial statements have been so incorporated in reliance upon the reports of such firm given upon their authority as experts in accounting
and auditing. The offices of Deloitte LLP are located at 8 Adelaide Street West, Toronto, Ontario, M5H 0A9.
Deloitte LLP
is independent with respect to the Company within the meaning of the Securities Act and the applicable rules and regulations thereunder adopted by the Securities and
Exchange Commission and the Public Company Accounting Oversight Board (United States) and within the meaning of the rules of professional conduct of the Chartered Professional Accountants of Ontario.
20
EXPENSES
The following are the estimated expenses of the offering of the Securities being registered under the Registration Statement, all of
which has been or will be paid by us.
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|
|
|
|
SEC registration fee
|
|
$
|
454,300
|
|
Exchange listing fees
|
|
|
*
|
|
Blue sky fees and expenses
|
|
|
*
|
|
Trustee & transfer agent fees
|
|
|
*
|
|
Printing and engraving costs
|
|
|
*
|
|
Legal fees and expenses
|
|
|
*
|
|
Accounting fees and expenses
|
|
|
*
|
|
Miscellaneous
|
|
|
*
|
|
|
|
|
|
Total
|
|
$
|
*
|
|
|
|
|
|
-
*
-
The
applicable Prospectus Supplement will set forth the estimated aggregate amount of expenses payable in respect of any offering of Securities.
DOCUMENTS FILED AS PART OF THE REGISTRATION STATEMENT
The following documents have been or will be filed with the Commission as part of the Registration Statement: (1) for purposes
of Form F-10: the documents referred to under "Documents Incorporated by Reference"; the consent of Deloitte LLP; the consent of Torys LLP; powers of attorney; the BAM, BFI, and
the US LLC Issuer indenture; the form of BFI subordinated indenture; and the forms of BFI II, the AUS Issuer and UK Issuer indentures; and (2) for purposes of Form F-3: the
underwriting agreement(s) in respect of offerings hereunder; the US LLC Issuer indenture and forms of the AUS Issuer and UK Issuer indentures; the certificate of formation and limited liability
company agreement of the US Pref Issuer; other forms of debt instruments of the US LLC Issuer, the AUS Issuer and the UK Issuer; the consent of Deloitte LLP; the opinions and consent of
Torys LLP, Herbert Smith Freehills LLP and King & Woods Mallesons; powers of attorney; and the Statements of Eligibility of Computershare Trust Company, N.A., as
U.S. trustee, on Forms T-1.
21
Table of Contents
BROOKFIELD FINANCE INC.
US$ % Notes due , 2031
PRELIMINARY PROSPECTUS SUPPLEMENT
April 7, 2021
Joint Book-Running Managers
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Citigroup
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SMBC Nikko
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Deutsche Bank Securities
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HSBC
|
Brookfield (PK) (USOTC:BAMGF)
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