Brookfield Office Properties Inc T.BPO.PR.A

RE:RE:RE:Brookfield Group Returns

[SONOFFERGUS]

GM Carena.

I enjoy your thoughts on BN -- you come at it from a different angle than I do and it makes me think.  I am riding with your premise that BPO prefs are fine as long as BN is safe, and BN's debt ratings suggest it is and will be.

The size of the scraps subindex is interesting too.  I guess the general creditworthiness of issuers has migrated downward over the decades. Maybe a scraps of scraps subindex is in order to differentiate BCE from BPO.

Maybe the ubiquity of holdcos has something to do with it.  Maybe compensation structures drive companies to run higher leverage.  Maybe decades of low rates have made leverage impossible to resist.  And, maybe, just maybe, higher rates plus seeing what happens when borrow short/lend long goes very wrong will drive a great delevering over the next few years, to the benefit of prefs. 

Hmmm.

Have a good one.

Sonoffergus