Brookfield Office Properties Inc T.BPO.PR.P

BPO Short Positions June 15, 2024

[pierrelebel]

BPO.PR.A	14,807	1,618
BPO.PR.C	18,670	-5,595
BPO.PR.I	220,364	-8,985
BPO.PR.N	38,432	-8,730
BPO.PR.P	68,581	-7,340
BPO.PR.R	48,562	-10,877
BPO.PR.T	339,004	11,179
BPO.PR.X	364	-963
BPO.PR.W	44	-82
BPO.PR.Y	2,680	-88
Total	751,508	-29,863

[Carena]

Good morning Pierre, Thanks for the info.....paying the dividend on the T's has to be painful....surprised it is still over 300,000 shares. Carena

[wynner]

  42 cents to be paid on June 28. Hard to move the shares that much I would think. Where did they get the borrow? How much does that cost? $142 mill market cap. The Y is only $26 mil.

[SONOFFERGUS]

I'm curious about borrow costs too.  Haven't been able to find anything. IMHO there are some great pairs trades and that may explain the short positions. Dividend compensation payments aren't fully deductible, which adds costs and thereby inhibits liquidity and price discovery.  Not sure if there is a good tax policy reason for it.  Here we are.

[pierrelebel]

Good afternoon wynner. "Where did they get the borrow? How much does that cost?" I do not know. Traders may have the information. There is a website called Fintel that could provide this information (and so much more) for traders.  However their service is very expensive (several hundred dollars for their top level service)

[wynner]

I don't know either so I will just make it up. Brookfield ends up buying the whole block of shorts for a nice price. Maybe they're in on it. Why not?

[pierrelebel]

"Why not?" I suspect the new tax laws may require corporations buying back their preferred shares below par to consider the diference as taxable income (not capital gain) That could make the operation very expensive, let alone losing the ability to state you have $2,300,000,000+ in " capital". That is powerful tool for a company that depends so much on OPM.

[SONOFFERGUS]

Hi Pierre. In my recollection, share transactions are on account of capital so no tax implications to issuer -- not taxable, not deductible.  A redemption, as opposed to a buyback, can trigger deemed dividends for the holders where the redemption price is > paid up capital, as an example where redemption at $25.50 triggers a $.50 deemed dividend.   The new 2% buyback tax has a

[pierrelebel]

Hi SONOFFERGUS. Thank you.  I am getting conflicting information on corporate taxation as it applies to buyback below par. I will be back once I have a definitive answer.

[SONOFFERGUS]

Thx Pierre. Difference could be whether we're talking about BPO buying its own shares or another Brookfield entity buying them.  Dunno if there would be securities law or governance issues wrt the latter.