Brookfield Office Properties Inc T.BPO.PR.A

RE:This paying a dividend to common shareholder only for them

[SONOFFERGUS]

Back to your area of expertise I see -- armchair CFO.

Here's my investment thesis:

BPY/BPO's financial health is improving.  Rates are coming down globally.  NOI is going up, cap rates are going down, long-term investors are taking notice (see Vornado chart as a proxy for BPY common).  At some point BPY/BPO will be a good credit again.

BN guys and gals are smart.  They know that failing to pay BPO divs would cause massive headaches on many fronts.  They are in the fundraising business and any disruption of that process would be insane.  Why would they jeopardize their trillion-dollar business for a piddly $50ish million of dividends per quarter?  Why would they kick Canadian investors in the teeth and kill that capital source?  Not a chance.  They will find a way to get it paid, as they have done.  Inefficiencies, if they in fact exist, are immaterial.

As rates come down, there may come a point when rate resets fall out of favour given the relationship of spot GoC5 to forward rate expectations.  This aspect scares me for high-grade resets trading in the $20s.  A huge selling point of BPO prefs is that prices give lots of room to run as credit risk improves while rate reset expectations decline.  If things get ZIRP weird again, those 9-ish% minimum dividends are gonna be bid up hard.

I dunno how to put it any clearer than that.  You should get back on the Es -- your purge only cost you a couple of bucks!