|
|
|
|
|
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.
-
(4)
-
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 Offering 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 financial statements, 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 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.
S-15
Table of Contents
CONSOLIDATED CAPITALIZATION OF THE COMPANY
The following table sets forth the consolidated capitalization of the Company (i) as at June 30, 2020 and (ii) as
at June 30, 2020 as adjusted to give effect to the issuance of the 2051 Notes and the Notes hereunder. For further disclosures in respect of consolidated capitalization, please see the
Company's unaudited comparative interim consolidated financial statements for the three and six months ended June 30, 2020 and 2019 and notes thereto, which are incorporated by reference in
this Prospectus Supplement.
|
|
|
|
|
|
|
|
|
|
As at June 30, 2020
|
|
|
|
Actual
|
|
As adjusted
|
|
|
|
($ amounts in millions)
|
|
Corporate borrowings
|
|
$
|
8,051
|
|
$
|
8,932
|
|
Non-recourse borrowings
|
|
|
|
|
|
|
|
Property-specific mortgages
|
|
|
126,869
|
|
|
126,869
|
|
Subsidiary borrowings
|
|
|
9,493
|
|
|
9,493
|
|
Accounts payable and other
|
|
|
42,235
|
|
|
42,235
|
|
Liabilities associated with assets classified as held for sale
|
|
|
173
|
|
|
173
|
|
Deferred tax liabilities
|
|
|
14,347
|
|
|
14,347
|
|
Subsidiary equity obligations
|
|
|
4,201
|
|
|
4,201
|
|
Equity
|
|
|
|
|
|
|
|
Non-controlling interests
|
|
|
78,996
|
|
|
78,996
|
|
Preferred equity
|
|
|
4,145
|
|
|
4,145
|
|
Common equity
|
|
|
27,925
|
|
|
27,925
|
|
|
|
|
|
|
|
Total capitalization
|
|
$
|
316,435
|
|
$
|
317,316
|
|
|
|
|
|
|
|
EARNINGS COVERAGE RATIOS OF THE COMPANY
The Company's borrowing cost requirements for the 12-month periods ended December 31, 2019 and June 30, 2020 amounted to
$7.539 million and $7.683 million, respectively, after giving effect to (i) the issuance of the Notes, (ii) the issuance by BFI of the 2051 notes; (iii) the issuance
by BFL of $600 million principal amount of 3.450% notes due April 15, 2050, (iv) the issuance by BFI of $1 billion principal amount of 4.850% notes due March 29,
2029, (v) the redemption of Cdn$350 million principal amount of the Company's 5.30% notes due March 1, 2021, (vi) the issuance by BFI of the original 2030 notes
(as defined below in "Prior Sales" below), and (vii) the issuance by BFI of the additional 2030 notes (as defined below in
"Prior Sales" below), as if each such issuance or redemption had occurred on January 1, 2019 (collectively, the
"Adjustments"). Net income attributable to shareholders before borrowing costs and income taxes for the 12-month periods ended December 31, 2019
and June 30, 2020 was $10.454 million and $8.495 million, respectively, which is approximately 1.4 times and 1.1 times the Company's borrowing cost requirements for
the period, after giving effect to the Adjustments.
S-16
Table of Contents
DESCRIPTION OF THE NOTES
BFI will issue $400,000,000 aggregate principal amount of 4.625% Subordinated Notes due October 16, 2080 under an indenture, to
be dated as of the date the Notes are originally issued (the "Base Indenture"), among BFI, the Company, as guarantor, and Computershare Trust
Company of Canada, as trustee (the "Trustee"), as supplemented by a supplemental indenture, to be dated as of the date the Notes are originally
issued (the "Supplemental Indenture" and, together with the Base Indenture, the "Indenture"),
among BFI, the Company and the Trustee. Computershare Trust Company, N.A. will initially act as Paying Agent for the Notes.
The
following is a summary of the material rights, privileges, restrictions, obligations and conditions attaching to the Notes and certain provisions of the Indenture and is intended to
supplement, and to the extent
inconsistent, to replace, the more general terms and provisions of the debt securities described in the accompanying Base Shelf Prospectus, to which we refer you. This summary is qualified in its
entirety by the provisions of the Indenture and the Notes. You should read the Indenture and the Notes in their entirety. Copies of the Indenture and the Notes may be obtained upon request to the
Company at the address set forth under "Documents Incorporated by Reference."
For
information concerning the Exchange Preference Shares into which the Notes are, in certain circumstances, exchangeable as described under
" Automatic Exchange" below, see "Description of the Exchange Preference
Shares." Unless otherwise indicated, defined terms used in this section apply only to this "Description of the Notes" section
and the "Description of the Exchange Preference Shares" section and not to any other sections of this Prospectus Supplement.
General
The Notes will be unsecured subordinated obligations of BFI and will initially be limited to $400,000,000 aggregate principal amount,
all of which will be issued under the Supplemental Indenture. The Notes will mature on October 16, 2080. The Notes will bear interest at the rate of 4.625% per annum from October 16, 2020, or
from the most recent interest payment date to which interest has been paid or provided for, payable quarterly in arrears on January 16, April 16, July 16 and October 16 of
each year, commencing on January 16, 2021.
The
Notes will be fully and unconditionally guaranteed, on a subordinated basis, by the Company.
Further Issuance
The Notes will constitute a separate series of Securities (as defined in the Base Indenture) under the Indenture, initially
limited to $400,000,000 in aggregate principal amount. Under the Indenture BFI may, without the consent of the holders of the Notes, "reopen" the series of Securities of which the Notes are a part and
issue additional notes of such series from time to time in the future. The Notes offered by this Prospectus Supplement and any additional notes of such series that we may issue in the future will
constitute a single series of Securities under the Indenture; 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. This means
that, in circumstances in which the Indenture provides for the holders of Securities of any series to vote or take any other action as a single class, the Notes offered hereby and any additional notes
of such series of notes that we may issue by reopening such series will vote or take that action as a single class.
Interest and Maturity
BFI will pay interest on the Notes on every January 16, April 16, July 16 and October 16 of each year
during which the Notes are outstanding until October 16, 2080 (each such quarterly date, an "Interest Payment Date").
BFI
will pay interest on the Notes at a rate of 4.625% per year in equal quarterly installments on each Interest Payment Date, commencing on January 16, 2021. The Notes will
mature on October 16, 2080 (the "Maturity Date").
S-17
Table of Contents
Interest
for each interest period from the date the Notes are originally issued (the "Issue Date") will be calculated on the basis
of a 360-day year consisting of twelve 30-day months. For the purposes of disclosure under the Interest Act (Canada), and without affecting the interest
payable on the Notes, whenever the interest rate on the Notes is to be calculated on the basis of a period of less than a calendar year, the yearly interest rate equivalent for such interest rate will
be the interest rate multiplied by the actual number of days in the relevant calendar year and divided by 360.
Interest
payments will be made to the persons or entities in whose names the Notes are registered at the close of business on January 2, April 2, July 2, and
October 2 (in each case, whether or not a business day), as the case may be, immediately preceding the relevant Interest Payment Date. If an Interest Payment Date falls on a day that is
not a business day, the Interest Payment Date will be postponed to the next business day, and no further interest will accrue in respect of such postponement.
Specified Denominations
The Notes will be issued only in minimum denominations of $25 and integral multiples of $25 in excess thereof.
Deferral Right
So long as no Event of Default (as defined below) has occurred and is continuing, BFI may elect, at its sole option, at any date
other than an Interest Payment Date, to defer the interest payable on the Notes on one or more occasions for up to five consecutive years (a "Deferral
Period"). There is no limit on the number of Deferral Periods that may occur. Such deferral will not constitute an Event of Default or any other breach under the Indenture and
the Notes. Deferred interest will accrue, compounding on each subsequent Interest Payment Date, until paid. A Deferral Period terminates on any Interest Payment Date on which BFI pays all accrued and
unpaid interest on such date. No Deferral Period may extend beyond the Maturity Date.
BFI
will give the holders of the Notes written notice of its election to commence or continue a Deferral Period at least 10 and not more than 60 days before the next Interest
Payment Date.
Dividend Stopper Undertaking
Unless BFI has paid all accrued and payable interest on the Notes, the Company will not:
-
(i)
-
declare
any dividend on the Dividend Restricted Shares or pay any interest on any Parity Indebtedness (other than stock dividends on Dividend Restricted
Shares);
-
(ii)
-
redeem,
purchase or otherwise retire any Dividend Restricted Shares or Parity Indebtedness (except (a) with respect to Dividend Restricted Shares,
out of the net cash proceeds of a substantially concurrent issue of Dividend Restricted Shares or (b) pursuant to any purchase obligation, sinking fund, retraction privilege or mandatory
redemption provisions attaching to any series of Dividend Restricted Shares); or
-
(iii)
-
make
any payment to holders of any of the Dividend Restricted Shares or any Parity Indebtedness in respect of dividends not declared or paid on such
Dividend Restricted Shares or interest not paid on such Parity Indebtedness, respectively (the "Dividend Stopper Undertaking").
"Company Shares" means the Class A Limited Voting Shares of the Company and the Class B Limited Voting Shares of the
Company, and any shares of the Company ranking pari passu or junior to the Class A Limited Voting Shares of the Company and the
Class B Limited Voting Shares of the Company.
"Company Preference Shares" means the preference shares of the Company, including the Class A Preference Shares (including the
Exchange Preference Shares) and the Class AA Preference Shares of the Company.
"Dividend Restricted Shares" means the Company Shares and Company Preference Shares.
S-18
Table of Contents
"Parity Indebtedness" means any class or series of the Company's indebtedness currently outstanding or hereafter created which ranks on a
parity with the Company's guarantee of the Notes (prior to any Automatic Exchange) as to distributions upon liquidation, dissolution or winding-up.
It is in the interest of BFI and the Company to ensure that BFI timely pays interest on the Notes so as to avoid triggering the Dividend Stopper
Undertaking.
Automatic Exchange
The Notes, including accrued and unpaid interest thereon, will be exchanged automatically
(the "Automatic Exchange"), without the consent of the holders thereof, into shares of a newly issued series of Class A Preference Shares
of the Company, being Class A Preference Shares, Series 50 (the "Exchange Preference Shares") upon the occurrence of:
(i) the making by BFI and/or the Company of a general assignment for the benefit of their creditors or a proposal (or the filing of a notice of their intention to do so) under the Bankruptcy and Insolvency
Act (Canada); (ii) any proceeding instituted by BFI and/or the Company seeking to adjudicate them as bankrupt
(including any voluntary assignment in bankruptcy) or insolvent or, where BFI and/or the Company are insolvent, seeking liquidation, winding up, dissolution, reorganization, arrangement, adjustment,
protection, relief or composition of their debts under any law relating to bankruptcy or insolvency in Canada, or seeking the entry of an order for the appointment of a receiver, interim receiver,
trustee or other similar official for BFI and/or the Company or any substantial part of their property and assets in circumstances where BFI and/or the Company are adjudged as bankrupt (including any
voluntary assignment in bankruptcy) or insolvent; (iii) a receiver, interim receiver, trustee or other similar official is appointed over BFI and/or the Company or for any substantial part of
their property and assets by a court of competent jurisdiction in circumstances where BFI and/or the Company are adjudged as bankrupt (including any voluntary assignment in bankruptcy) or insolvent
under any law relating
to bankruptcy or insolvency in Canada; or (iv) any proceeding is instituted against BFI and/or the Company seeking to adjudicate them as bankrupt (including any voluntary assignment in
bankruptcy) or insolvent, or where BFI and/or the Company are insolvent, seeking liquidation, winding up, dissolution, reorganization, arrangement, adjustment, protection, relief or composition of
their debts under any law relating to bankruptcy or insolvency in Canada, or seeking the entry of an order for the appointment of a receiver, interim receiver, trustee or other similar official for
BFI and/or the Company or any substantial part of their property and assets in circumstances where BFI and/or the Company are adjudged as bankrupt or insolvent under any law relating to bankruptcy or
insolvency in Canada, and either such proceeding has not been stayed or dismissed within 60 days of the institution of any such proceeding or the actions sought in such proceedings occur
(including the entry of an order for relief against BFI and/or the Company or the appointment of a receiver, interim receiver, trustee, or other similar official for them or for any substantial part
of their property and assets) (each, an "Automatic Exchange Event").
The
Exchange Preference Shares will carry the right to receive cumulative preferential cash dividends, if, as and when declared by the Board of Directors of the Company
(the "Board of Directors"), subject to the solvency test set out in the Business Corporations Act
(Ontario) or any other applicable law, at the same rate as would have accrued on the Notes (had the Notes remained outstanding) as described under
" Interest and Maturity", payable on each quarterly dividend payment date, subject to any applicable withholding
Tax. See "Description of the Exchange Preference Shares."
The
Automatic Exchange shall occur upon an Automatic Exchange Event (the "Exchange Time"). As of the Exchange Time, noteholders
will have the right to receive one Exchange Preference Share for each $25 principal amount of Notes previously held together with the number of Exchange Preference Shares (including fractional shares,
if applicable) calculated by dividing the amount of accrued and unpaid interest, if any, on the Notes, by $25. Such right will be automatically exercised, and the Notes shall be automatically
exchanged, without the consent of the holders of the Notes, into a newly-issued series of fully-paid Exchange Preference Shares. At such time, all outstanding Notes shall be deemed to be immediately
and automatically surrendered without need for further action by noteholders, who shall thereupon automatically cease to be holders thereof and all rights of any such holder as a debtholder of BFI or
as a beneficiary of the subordinated guarantee by the Company shall automatically cease.
S-19
Table of Contents
Upon
an Automatic Exchange of the Notes, the Company reserves the right not to issue some or all of the Exchange Preference Shares to Ineligible Persons. In such circumstances, the
Company will hold all Exchange Preference Shares that would otherwise be delivered to Ineligible Persons, as agent for such Ineligible Persons, and will attempt to facilitate the sale of such shares
through a registered broker or dealer retained by the Company for the purpose of effecting the sale (to parties other than the Company, its affiliates or other Ineligible Persons) on behalf of
such Ineligible Persons of such Exchange Preference Shares. Such sales, if any, may be made at any time and any price. The Company will not be subject to any liability for failing to sell Exchange
Preference Shares on behalf of any such Ineligible Persons or at any particular price on any particular day. The net proceeds received by the Company from the sale of any such Exchange Preference
Shares will be divided among the Ineligible Persons in proportion to the number of Exchange Preference Shares that would otherwise have been delivered to them, after deducting the costs of sale and
any applicable Taxes or withholding on account of Taxes, if any. The Company will make payment of the aggregate net proceeds to The Depository Trust Company
(the "Clearing Agency") (if the Notes are
then held in the book-entry only system) or to the registrar and transfer agent (in all other cases) for distribution to such Ineligible Persons in accordance with the applicable procedures of
the Clearing Agency or otherwise.
"Ineligible Person" means any person whose address is in, or whom the Company or its transfer agent has reason to believe is a resident
of, any jurisdiction outside of the United States to the extent that: (i) the issuance or delivery by the Company to such person, upon an Automatic Exchange of Exchange Preference
Shares, would require the Company to take any action to comply with securities or analogous laws of such jurisdiction; or (ii) withholding tax would be applicable in connection with the
delivery to such person of Exchange Preference Shares upon an Automatic Exchange.
As
a precondition to the delivery of any certificate or other evidence of issuance representing any Exchange Preference Shares or related rights following an Automatic Exchange, the
Company may require a holder of Notes (and persons holding Notes represented by such holder of Notes) to deliver a declaration, in form and substance satisfactory to the Company, confirming
compliance with any applicable regulatory requirements to establish that such holder of Notes is not, and does not represent, an Ineligible Person.
As the events that give rise to an Automatic Exchange are bankruptcy and related events, it is in the interest of BFI and the Company to ensure that an Automatic
Exchange does not occur, although the events that could give rise to an Automatic Exchange may be beyond BFI's and the Company's control.
Redemption Right
On or after October 16, 2025, BFI may, at its option, on giving not more than 60 nor less than 30 days' notice to
the holders of the Notes, redeem the Notes, in whole at any time or in part from time to time on any Interest Payment Date. The redemption price per $25 principal amount of Notes redeemed on any
Interest Payment Date will be 100.00% of the principal amount thereof, together with accrued and unpaid interest to, but excluding, the date fixed for redemption. Notice of redemption shall be
irrevocable and on the redemption date, the Notes subject to redemption shall become due and payable at the redemption price, and from and after such date (unless BFI shall default in the payment of
the redemption price and accrued interest) such Notes shall cease to bear interest. Notes that are redeemed shall be cancelled and shall not be reissued.
In
the event that BFI redeems or purchases any of the Notes, BFI intends (without thereby assuming a legal obligation) to do so only to the extent the aggregate redemption or purchase
price is equal to or less than the net proceeds, if any, received by BFI from new issuances during the period commencing on the 365th or 366th calendar day, depending upon the actual
number of days in the applicable year, prior to the date of such redemption or purchase of securities which are assigned by DBRS Limited ("DBRS") at the
time of sale or issuance, an aggregate equity credit that is equal to or greater than the equity credit assigned to the Notes to be redeemed or repurchased (but taking into account any changes
in hybrid capital methodology or another relevant methodology or the interpretation thereof since the issuance of the Notes), unless the Notes are redeemed pursuant to a Rating Event (to the
extent it is triggered by a change of methodology at DBRS) or a Tax Event.
S-20
Table of Contents
Redemption on Tax Event or Rating Event
At any time, after the occurrence of a Tax Event, BFI may, at its option, on giving not more than 60 nor less than
30 days' notice to the holders of the Notes, redeem all (but not less than all) of the Notes. The redemption price per $25 principal amount of Notes will be equal to 100.00% of the
principal amount thereof, together with accrued and unpaid interest to but excluding the date fixed for redemption.
A
"Tax Event" means BFI or the Company (as applicable) has received an opinion of counsel of nationally recognized standing experienced in
such matters to the effect that, as a result of (i) any amendment or change to the laws (or any regulations or rulings thereunder) of any Relevant Taxing Jurisdiction (as defined below)
or any applicable tax treaty or (ii) any change in the application, administration or interpretation of such laws, regulations, rulings or treaties (including any judicial decision rendered by
a court of competent jurisdiction with respect to such laws, regulations, rulings or treaties), in each case of (i) and (ii), by any legislative body, court, governmental authority or agency,
regulatory body or taxing authority, which amendment or change is effective on or after the Issue Date (or if the Relevant Taxing Jurisdiction has changed since the Issue Date, the date on
which the applicable jurisdiction became a Relevant Taxing Jurisdiction) (including, for the avoidance of doubt, any such amendment or change made on or after the Issue Date (or the date on
which the applicable jurisdiction became a Relevant Taxing Jurisdiction, as applicable) that has retroactive effect to a date prior to the Issue Date (or the date on which the applicable
jurisdiction became a Relevant Taxing Jurisdiction, as applicable)), either (a) BFI or the Company (as applicable) is, or may be, subject to more than a de minimis amount of additional taxes, duties
or other governmental charges or civil liabilities because the treatment of any of its items of income, taxable income, expense, taxable capital or taxable paid-up capital with respect to the Notes
(including the treatment by BFI or the Company (as applicable) of interest on the Notes), as or as would be reflected in any tax return or form filed, to be filed, or that otherwise could have been
filed, will not be respected by a taxing authority or (b) BFI or the Company (as applicable) has been or will be obligated to pay Additional Amounts as described under the caption
" Payment of Additional Amounts," and neither BFI nor the Company (as applicable) can avoid such obligation by taking
commercially reasonable measures to avoid it.
At
any time, within 120 days following the occurrence of a Rating Event, BFI may, at its option, on giving not more than 60 nor less than 30 days' notice to the holders of
the Notes, redeem all (but not less than all) of the Notes. The redemption price per $25 principal amount of Notes will be equal to 102.00% of the principal amount thereof, together with
accrued and unpaid interest to but excluding the date fixed for redemption.
A
"Rating Event" means DBRS, Fitch Ratings, Inc. ("Fitch"), S&P Global Ratings,
acting through S&P Global Ratings Services (Canada), a business unit of S&P Global Canada Corp. ("S&P") or Moody's
Investors Service, Inc. ("Moody's," and together with DBRS, Fitch, and S&P, the "rating agencies"
and each a "rating agency") amends, clarifies or changes the criteria it uses to assign equity credit to securities such as the Notes, which amendment,
clarification or change results in (a) the shortening of the length of time the Notes are assigned a particular level of equity credit by that rating agency as compared to the length of time
they would have been assigned that level of equity credit by that rating agency or its predecessor on the initial issuance of the Notes; or (b) the lowering of the equity credit (including up
to a lesser amount) assigned to the Notes by that rating agency compared to the equity credit assigned by that rating agency or its predecessor on the initial issuance of the Notes.
Purchase for Cancellation
The Notes may be purchased, in whole or in part, by BFI in the open market or by tender or private contract. Notes purchased by BFI
shall be cancelled and shall not be reissued. The purchase price payable by BFI will be paid in cash.
Rank and Subordination
The Notes will be direct unsecured subordinated obligations of BFI. The payment of principal and interest on the Notes, to the extent
provided in the Indenture, will be subordinated in right of payment to the prior payment in full of all present and future BFI Senior Indebtedness, and will be effectively subordinated to all
indebtedness and obligations of BFI's subsidiaries.
S-21
Table of Contents
In
the event (i) of any insolvency or bankruptcy proceedings or any receivership, liquidation, reorganization or other similar proceedings in respect of BFI or a substantial part
of its property, or of any proceedings for liquidation, dissolution or other winding-up of BFI, or (ii) subject to the subordination provisions in the Indenture that a default shall have
occurred with respect to payments due on any BFI Senior Indebtedness, or there shall have occurred an event of default (other than a default in payment) in respect of any BFI Senior Indebtedness
permitting the holder or holders thereof to accelerate the maturity thereof, or (iii) that the principal of and accrued interest on the Notes shall have been declared due and payable pursuant
to the Indenture and such declaration shall not have been rescinded and annulled as provided therein, then the holders of BFI Senior Indebtedness shall first be entitled to receive payment of the full
amount due thereon before the holders of the Notes are entitled to receive a payment on account of the principal or interest on the Notes, including, without limitation, any payments made pursuant to
any redemption or purchase for cancellation.
"BFI Senior Indebtedness" means all principal, interest, premium, fees and other amounts owing on, under or in
respect of:
-
(a)
-
all
indebtedness, liabilities and obligations of BFI, whether outstanding on the date of this Prospectus Supplement or thereafter created, incurred, assumed
or guaranteed; and
-
(b)
-
all
renewals, extensions, restructurings, refinancings and refundings of any such indebtedness, liabilities or obligations;
except
only for indebtedness to trade creditors, the Notes and any indebtedness, liabilities or obligations of BFI that are, pursuant to the terms of the instrument creating or evidencing such
indebtedness, liabilities or obligations, expressly pari passu with or subordinate in right of payment to the Notes. As of June 30, 2020,
the BFI Senior Indebtedness totaled approximately $4.55 billion, and subsequent to June 30, 2020, BFI issued an additional $500 million of the 2051 Notes that also constitute BFI
Senior Indebtedness.
Company Guarantee
The Notes will be fully and unconditionally guaranteed, on a subordinated basis, as to payment of principal, premium (if any) and
interest and certain other amounts by the Company and such guarantee will rank equally with the Company's other unsecured, subordinated obligations and will be subordinated to all present and future
Company Senior Indebtedness. Due to these subordination provisions, in the event of the Company's or BFI's insolvency, funds that the Company or BFI would otherwise use to make payments under the
Notes (or under the Company's guarantee thereof) will be used to pay the holders of the indebtedness ranking senior in right of payment to the Notes (or under the Company's guarantee
thereof) to the extent necessary to pay such senior indebtedness in full. As a result of those payments, the holders of such senior indebtedness may recover more, ratably, than holders of the Notes.
In addition, the holders of such senior indebtedness may under certain circumstances restrict or prohibit the Company from making payments on the Notes (or under the Company's guarantee
thereof).
"Company Senior Indebtedness" means all principal, interest, premium, fees and other amounts owing on, under or in
respect of:
-
(a)
-
all
indebtedness, liabilities and obligations of the Company, whether outstanding on the date of this Prospectus Supplement or thereafter created, incurred,
assumed or guaranteed (including any such indebtedness, liabilities or obligations that are guaranteed by the Company); and
-
(b)
-
all
renewals, extensions, restructurings, refinancings and refundings of any such indebtedness, liabilities or obligations;
except
only for indebtedness to trade creditors, the guarantee by the Company of the Notes and any indebtedness, liabilities or obligations of the Company that are, pursuant to the terms of the
instrument creating or evidencing such indebtedness, liabilities or obligations, expressly pari passu with or subordinate in right of payment to
the guarantee by the Company of the Notes. As of June 30, 2020, the Company Senior Indebtedness totaled approximately $8.1 billion, which includes the Company's guarantees of
$4.55 billion of BFI's existing notes and $600 million of 3.50% notes due 2050 issued by BFL. In addition, in September 2020, BFI issued an
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additional
$500 million of the 2051 Notes that are also guaranteed by the Company and constitute Company Senior Indebtedness.
In
addition to the contractual subordination described above, the payment of principal and interest on the Notes will be structurally subordinated to all indebtedness and other
obligations of any subsidiaries of the Company (other than other subordinated debt of BFI), and the payment of principal and interest under the Company's guarantee of the Notes will be structurally
subordinated to all indebtedness and other obligations of the Company's subsidiaries.
Events of Default
An event of default in respect of the Notes will occur only if BFI defaults (i) on the payment of principal or premium or
Additional Amounts, if any, when due and payable, or (ii) on the payment of interest (including Additional Amounts) when due and payable and such default continues for 30 days (subject
to BFI's right, at its sole option, to defer interest payments, as described under "Description of the Notes Deferral
Right") (each, an "Event of Default"). There will be no right of acceleration in the case of a default in the performance of any
other covenant of BFI or the Company in the Indenture, although a legal action could be brought to enforce such covenant. For the avoidance of doubt, the events of default stated in this section shall
be the only events of default applicable to the Notes.
If
an event of default has occurred and is continuing, and the Notes have not already been automatically exchanged into Exchange Preference Shares, then BFI shall be deemed to be in
default under the Indenture and the Notes and the Trustee may, in its discretion and shall upon the request of holders of not less than 25% of the principal amount of Notes then outstanding under the
Indenture, demand payment of the principal or premium or Additional Amounts, if any, together with any accrued and unpaid interest (including Additional Amounts) up to (but excluding) such
date, which shall immediately become due and payable in cash, and may institute legal proceedings for the collection of such aggregate amount in the event BFI and the Company fail to make payment
thereof upon such demand.
Additional Covenants
In addition to the Dividend Stopper Undertaking, the Company will covenant for the benefit of the holders of the Notes that it
(i) will not create or issue any Company Preference Shares which, in the event of insolvency, liquidation, dissolution or winding-up of the Company, would rank in right of payment in priority
to the Exchange Preference Shares and (ii) BFI shall at all times remain a subsidiary of the Company.
Issue of Exchange Preference Shares in Connection with Automatic Exchange
All corporate action necessary to authorize the Company to issue Exchange Preference Shares pursuant to the terms of the Notes will be
completed prior to the closing of the Offering.
Merger, Amalgamation, Consolidation, Sale, Lease or Conveyance
Pursuant to the Indenture, neither BFI nor the Company (in each case for purposes of this paragraph, 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 paragraph, 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 Indenture in respect of the Notes, and in the case of the Company, its subordinated guarantee of the Notes and
(ii) the Notes will be valid and binding obligations of the Successor, entitling the holders thereof, as against the Successor, to all the rights of holders of Notes under the 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 Notes or to
the
rights and powers of the Trustee under the Indenture; provided, however, that such restrictions are not applicable to any sale or transfer by BFI or the Company to any one or more of their
subsidiaries.
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Payment of 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 (hereinafter, "Taxes") imposed or
levied by or on behalf of the government of Canada or of any province or territory thereof or by any authority or agency therein or thereof having power to tax (a "Relevant
Taxing Jurisdiction"), 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 on Tax Event or Rating Event", BFI or the Company
(as applicable) will pay such additional amounts (hereinafter "Additional Amounts") as may be necessary so that the net amount received
(including 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 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; (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 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 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, (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 Additional Amounts would not be payable pursuant to clauses (a) through (g) above) levied or
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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 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 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, 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 Additional Amounts to the extent that, in such context, 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 " 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.
"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.
Amendment, Supplement and Waiver
Modifications and amendments of the Indenture may be made by the Company, BFI and the Trustee with the consent of the holders of a
majority of the principal amount of the outstanding debt securities of each series issued under the Indenture (including the Notes) affected by such modification or amendment; provided, however, that
no such modification or amendment may, without the consent of the holder of each outstanding debt security of such affected series: (1) change the stated maturity of the principal of, or any
installment of interest, if any, on any debt security; (2) reduce the principal amount of, or the premium, if any, or the rate of
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interest,
if any, on any debt security; (3) reduce the amount of the principal of any debt security payable upon the acceleration of the maturity thereof, (4) change the place of
payment; (5) change the currency or currency unit of payment of principal of (or premium, if any) or interest, if any, on any debt security; (6) impair the right to institute suit
for the enforcement of any payment on or with respect to any debt security; (7) reduce the percentage of principal amount of outstanding debt securities of such series, the consent of the
holders of which is required for modification or amendment of the Indenture or for waiver of compliance with certain provisions of the Indenture or for waiver of certain defaults; (8) modify
the provisions of the Indenture relating to subordination in a manner that adversely affects the rights of the holders of debt securities; (9) modify any provisions of the Indenture relating to
the modification and amendment of the Indenture or the waiver of past defaults or covenants except as otherwise specified in the Indenture; or (10) following the mailing of any offer to
purchase, modify any offer to purchase for such debt security required to be made pursuant to the terms of such outstanding debt security in a manner materially adverse to the holders thereof.
The
holders of a majority of the principal amount of the Notes may on behalf of the holders of the Notes waive, insofar as the Notes are concerned, compliance by BFI and the Company with
certain restrictive provisions of the Indenture, including the covenants and events of default. The holders of a majority in principal amount of the Notes may waive any past default under the
Indenture with respect to the Notes, except a default in the payment of the principal of (or premium, if any) and interest, if any, on the Notes or in respect of a provision which under the
Indenture cannot be modified or amended without the consent of the holder of each outstanding Note. The Indenture or the Notes may be amended or supplemented, without the consent of any holder of debt
securities, in order, among other purposes, to cure any ambiguity or inconsistency or to make any change that does not have an adverse effect on the rights of any holder of Notes.
Issue of Additional Notes
BFI may, at any time and from time to time, issue additional Notes or other subordinated notes without the authorization of holders of
the Notes. In the event that BFI issues additional series of subordinated notes, the rights, privileges, restrictions and conditions attached to such additional series may vary materially from the
Notes. In such event, the right of the holders of the Notes to receive interest or principal may rank pari passu with the rights of the holders
of other subordinated notes.
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 8742 Lucent Boulevard, Suite 225, Highlands Ranch, Colorado, 80129.
Governing Law
The Indenture, the Notes and the Company's guarantee will be governed by and construed in accordance with the laws of the of the State
of New York, without regard to conflicts of laws principles thereof; provided, however, that the
exercise, performance or discharge by the Trustee of any of its rights, powers, duties or responsibilities hereunder shall be construed in accordance with the laws of the Province of Ontario and the
federal laws of Canada applicable therein.
Book-Entry Only Form
Upon issuance, the Notes will be represented by one or more fully registered global securities
(the "Global Securities") registered in the name of Cede & Co. (the nominee of the Clearing Agency), or such other name as
may be requested by an authorized representative of the Clearing Agency. The authorized denominations of each Note will be $25 and integral multiples of $25 in excess thereof. Accordingly, the Notes
may be transferred or exchanged only through the Clearing Agency and its Participants. Except as described below, owners of beneficial interests in the Global Securities will not be entitled to
receive the Notes in definitive form.
Beneficial
interests in the Notes will be represented through book-entry accounts of financial institutions acting on behalf of beneficial owners as direct and indirect Participants in
the Clearing Agency. Holders of the Notes may elect to hold interests in the Notes in book-entry form through either the Clearing Agency in the U.S.
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or
Clearstream Banking, société anonyme ("Clearstream"), or Euroclear Bank S.A./N.V.
("Euroclear"), if they are participants in those systems, or indirectly through organizations which are participants in those systems. Clearstream and
Euroclear will hold interests on behalf of their participants through customers' securities accounts in Clearstream's and Euroclear's names on the books of their respective depositaries, which in turn
will hold such interests in customers' securities accounts in the depositaries' names on the books of the Clearing Agency.
Each
person owning a beneficial interest in a Global Security must rely on the procedures of the Clearing Agency and, if such person is not a Participant, on the procedures of the
participant through which such person owns its interest in order to exercise any rights of a holder under the Indenture. The laws of some
jurisdictions require that certain purchasers of securities take physical delivery of such securities in certificated form. Such limits and such laws may impair the ability to transfer beneficial
interests in a Global Security representing the Notes.
The
following is based on information furnished by the Clearing Agency:
The
Clearing Agency 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 U.S. Exchange Act. The Clearing Agency holds securities that its Participants deposit with the Clearing Agency. The Clearing Agency also facilitates the settlement
among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. These direct Participants ("Direct Participants") include securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations. The Clearing Agency is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation
("DTCC"). DTCC is the holding company for the Clearing Agency, 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 Clearing Agency's system is also available to others such as securities brokers and
dealers, banks and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect
Participants"). The rules applicable to the Clearing Agency and its Participants are on file with the SEC.
Purchases
of the Notes under the Clearing Agency's system must be made by or through Direct Participants, which will receive a credit for such Notes on the Clearing Agency's records. The
ownership interest of each actual purchaser of each Note represented by a Global Security ("Beneficial Owner") is in turn to be recorded on the Direct
Participants' and Indirect Participants' records. Beneficial Owners will not receive written confirmation from the Clearing Agency of their purchase. Beneficial Owners are, however, expected to
receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct Participants or Indirect Participants through which such
Beneficial Owner entered into the transaction. Transfers of ownership interests in a Global Security representing the Notes are to be accomplished by entries made on the books of Participants acting
on behalf of Beneficial Owners. Beneficial Owners of a Global Security representing the Notes will not receive the Notes in definitive form representing their ownership interests therein, except in
the event that use of the book-entry system for such Notes is discontinued.
To
facilitate subsequent transfers, the Global Securities representing the Notes which are deposited with the Clearing Agency are registered in the name of the Clearing Agency's nominee,
Cede & Co., or such other name as may be requested by an authorized representative of the Clearing Agency. The deposit of Global Securities with the Clearing Agency and their
registration in the name of Cede & Co. or such other nominee effect no change in beneficial ownership. The Clearing Agency has no knowledge of the actual Beneficial Owners of the Global
Securities representing the Notes; the Clearing Agency's records reflect only the identity of the Direct Participants to whose accounts such Notes are credited, which may or may not be the Beneficial
Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance
of notices and other communications by the Clearing Agency to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect
Participants to Beneficial Owners
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will
be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.
Neither
the Clearing Agency nor Cede & Co. (nor such other nominee of the Clearing Agency) will consent or vote with respect to the Global Securities representing
the Notes. Under its usual procedures, the Clearing Agency mails an "omnibus proxy" to BFI as soon as possible after the applicable record date. The omnibus proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the Notes are credited on the applicable record date (identified in a listing attached to the omnibus proxy).
Principal,
premium, if any, and interest payments on the Global Securities representing the Notes will be made to Cede & Co. (or such other nominee as may be
requested by an authorized representative of the Clearing Agency). The Clearing Agency's practice is to credit Direct Participants' accounts, upon the Clearing Agency's receipt of funds and
corresponding detailed information from BFI or the Trustee, on the applicable payment date in accordance with their respective holdings shown on the Clearing Agency's records. Payments by Participants
to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name,"
and will be the responsibility of such Participant and not of the Clearing Agency, the applicable Trustee or BFI, subject to any statutory or regulatory requirements as may be in effect from time to
time. Payment of principal, premium, if any, and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of the Clearing Agency) is the
responsibility of BFI or the applicable Trustee (provided it has received funds from BFI), disbursement of such payments to Direct Participants shall be the responsibility of the Clearing Agency, and
disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants.
The
Clearing Agency may discontinue providing its services as securities depository with respect to the Notes at any time by giving reasonable notice to BFI or the Trustee. Under such
circumstances, in the event that a successor securities depository is not obtained, Notes in definitive form are required to be printed and delivered to each holder.
BFI
may decide to discontinue use of the system of book-entry transfers through the Clearing Agency (or a successor securities depositary). In that event, the Notes in definitive
form will be printed and delivered.
Clearstream
advises that it is incorporated under the laws of Luxembourg as a professional depositary. Clearstream holds securities for its participating organizations
("Clearstream participants"), and facilitates the clearance and settlement of securities transactions between Clearstream participants through
electronic book-entry changes in accounts of Clearstream participants, thereby eliminating the need for physical
movement of certificates. Clearstream provides to Clearstream participants, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities
and securities lending and borrowing. Clearstream interfaces with domestic markets in several countries. As a professional depositary, Clearstream is subject to regulation by the Luxembourg Commission
for the Supervision of the Financial Sector (Commission de Surveillance du Secteur Financier). Clearstream participants are recognized financial
institutions around the world, including underwriters, securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations and may include the Underwriters of
the Offering. Indirect access to Clearstream is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Clearstream
participant, either directly or indirectly.
Distributions
with respect to interests in the Notes held beneficially through Clearstream will be credited to cash accounts of Clearstream participants in accordance with its rules and
procedures, to the extent received by the Clearing Agency for Clearstream.
Euroclear
advises that it was created in 1968 to hold securities for participants of Euroclear ("Euroclear participants"), and to clear
and settle transactions between Euroclear participants through simultaneous electronic book-entry delivery against payment, thereby eliminating the need for physical movement of certificates and any
risk from lack of simultaneous transfers of securities and cash. Euroclear includes various other services, including securities lending and borrowing and interfaces with domestic markets in several
countries. Euroclear is operated by Euroclear Bank S.A./N.V. ("Euroclear Operator"). All operations are conducted by the Euroclear Operator, and
all Euroclear securities clearance accounts and Euroclear cash
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accounts
are accounts with the Euroclear Operator. Euroclear participants include banks (including central banks), securities brokers and dealers and other professional financial intermediaries and
may include the Underwriters of the Offering. Indirect access to Euroclear is also available to other firms that clear through or maintain a custodial relationship with a Euroclear participant, either
directly or indirectly.
Securities
clearance accounts and cash accounts with the Euroclear Operator are governed by the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of
the Euroclear System, and applicable Belgian law (collectively, the "Terms and Conditions"). The Terms and Conditions govern transfers of securities and
cash within the Euroclear System, withdrawals of securities and cash from the Euroclear System, and receipts of payment with respect to securities in the Euroclear System. All securities in the
Euroclear System are held on a fungible basis without attribution of specific certificates to specific securities clearance accounts. The Euroclear Operator acts under the Terms and Conditions only on
behalf of Euroclear participants, and has no records of or relationship with persons holding through Euroclear participants.
Distributions
with respect to the Notes held beneficially through the Euroclear System will be credited to the cash accounts of Euroclear participants in accordance with the Terms and
Conditions, to the extent received by the U.S. depositary for the Euroclear System.
The
information in this section concerning the Clearing Agency and the Clearing Agency's book-entry system, Clearstream and Euroclear has been obtained from sources that BFI and the
Company believe to be reliable, but is subject to any changes to the arrangements between BFI and the Clearing Agency and any changes to such procedures that may be instituted unilaterally by the
Clearing Agency, Clearstream and Euroclear.
Transfers
Transfers of ownership of the Notes will be effected only through records maintained by the Clearing Agency for such Notes with respect
to interests of Participants and on the records of Participants with respect to interests of persons other than Participants. Holders of the Notes who are not Participants, but who desire to purchase,
sell or otherwise transfer ownership of or other interests in the Notes, may do so only through Participants. The ability of a holder to pledge Notes or otherwise take action with respect to such
holder's interest in Notes (other than through a Participant) may be limited due to the lack of a physical certificate. See "Risk
Factors Risks Relating to the Notes No Assurance of Active Trading Market in the Notes."
Payments and Deliveries
As long as the Clearing Agency is the registered owner of the Notes, the Clearing Agency will be considered the sole owner of the Notes
for the purposes of receiving payments on the Notes or the delivery of Exchange Preference Shares upon the occurrence of an Automatic Exchange. Payments of interest in respect of the Notes will be
made by BFI to the Clearing Agency as the registered holder of the Notes and BFI understands that such payments will be forwarded by the Clearing Agency to Participants in accordance with the
applicable procedures of the Clearing Agency. Deliveries of Exchange Preference Shares in respect of the exercise or operation of the Automatic Exchange in the limited circumstances described under
" Automatic Exchange" are expected to be made by the Company and/or BFI to the Clearing Agency as the registered holder of the
Notes and the Company and/or BFI understands that such shares will be forwarded by the Clearing Agency to Participants in accordance with the applicable procedures of the Clearing Agency. As long as
the Notes are held in the Clearing Agency's book-entry only system, the responsibility and liability of the Trustees, the Company and/or BFI in respect of the Notes is limited to making payment of any
amount due on the Notes and/or making delivery of Exchange Preference Shares in respect thereof to the Clearing Agency.
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DESCRIPTION OF THE EXCHANGE PREFERENCE SHARES
The following is a summary of the rights, privileges, restrictions and conditions attaching to the Exchange Preference Shares. This
summary is qualified in its entirety by the Company's articles and the actual terms and conditions of the Exchange Preference Shares.
Series
The Exchange Preference Shares, if and when issued in connection with an Automatic Exchange, will be Series 50 of the
Class A Preference Shares of the Company. As of the date of this Prospectus Supplement, the Company had an aggregate of 189,786,171 Class A Preference Shares issued and outstanding. The
Company may, from time to time, create additional series of Class A Preferred Shares. For additional information on the Company's outstanding series of Class A Preference Shares, please
the documents incorporated by reference herein as described under "Documents Incorporated by Reference".
Issue Price
The Exchange Preference Shares will have an issue price of $25 per share. At the Exchange Time, holders of the Notes will receive one
Exchange Preference Share for each $25 principal amount of Notes previously held together with the number of Exchange Preference Shares (including fractional shares, if applicable) calculated by
dividing the amount of accrued and unpaid interest, if any, on the Notes, by $25.
No Fixed Maturity
The Exchange Preference Shares will not have a fixed maturity date.
Dividends
Holders of the Exchange Preference Shares will be entitled to receive fixed cumulative preferential cash dividends, as and when
declared by the Board of Directors, at the same rate as would have accrued on the Notes (had such Notes remained outstanding) as described under "Description of the
Notes Interest and Maturity", payable quarterly on January 16, April 16, July 16 and October 16 of
each year.
Payments
of dividends and other amounts in respect of the Exchange Preference Shares are expected to be made by the Company to the Clearing Agency, or its nominee, as the case may be, as
registered holder of the Exchange Preference Shares. As long as the Clearing Agency, or its nominee, is the registered holder of the Exchange Preference Shares, the Clearing Agency, or its nominee, as
the case may be, will be considered
the sole owner of the Exchange Preference Shares for the purposes of receiving payment on the Exchange Preference Shares.
Redemption of the Exchange Preference Shares
The Exchange Preference Shares will not be redeemable by the Company prior to October 16, 2025. On or after October 16,
2025, and subject to certain other restrictions set out in "Description of the Exchange Preference Shares Restrictions on Dividends and
Retirement and Issue of Shares", the Company may, at its option, on at least 30 days and not more than 60 days prior written notice, redeem all or from time to
time any part of the outstanding Exchange Preference Shares by payment in cash of a per share sum equal to $25.00, together with all accrued and unpaid dividends up to but excluding the date fixed for
redemption (less any tax required to be deducted and withheld by the Company).
If
less than all of the outstanding Exchange Preference Shares are to be redeemed, the shares to be redeemed shall be selected on a pro rata basis disregarding fractions or in
such manner as the Board of Directors in its sole discretion may, by resolution, determine.
The
Exchange Preference Shares do not have a fixed maturity date and are not redeemable at the option of the holders of Exchange Preference Shares. See
"Risk Factors".
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Table of Contents
Purchase for Cancellation
Subject to applicable law and to the provisions described under "Description of the Exchange Preference
Shares Restrictions on Dividends and Retirement and Issue of Shares" below, the Company may at any time purchase for cancellation the whole or any part of the
Exchange Preference Shares at the lowest price or prices at which in the opinion of the Board of Directors such shares are obtainable.
Rights on Liquidation
In the event of the liquidation, dissolution or winding-up of the Company or any other distribution of assets of the Company among its
shareholders for the purpose of winding-up its affairs, the holders of the Exchange Preference Shares will be entitled to receive $25.00 per share, together with all accrued and unpaid dividends up to
but excluding the date of payment or distribution (less any tax required to be deducted and withheld by the Company), before any amount is paid or any assets of the Company are distributed to the
holders of any shares ranking junior as to capital to the Exchange Preference Shares. Upon payment of such amounts, the holders of the Exchange Preference Shares will not be entitled to share in any
further distribution of the assets of the Company.
Priority
The Exchange Preference Shares rank senior to the Class AA Preference Shares, the Class A Limited Voting Shares, the
Class B Limited Voting Shares and other shares ranking junior to the Class A 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. The Exchange Preference Shares rank on a parity with every other series of Class A 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.
As
of the date of this Prospectus Supplement, the Company had an aggregate of 189,786,171 Class A Preference Shares issued and outstanding, all of which would rank on parity with
the Exchange Preference Shares.
Restrictions on Dividends and Retirement and Issue of Shares
So long as any of the Exchange Preference Shares are outstanding, the Company will not, without the approval of the holders of the
Exchange Preference Shares:
-
(i)
-
declare,
pay or set apart for payment any dividends (other than stock dividends payable in shares of the Company ranking as to capital and dividends junior
to the Exchange Preference Shares) on shares of the Company ranking as to dividends junior to the Exchange Preference Shares;
-
(ii)
-
except
out of the net cash proceeds of a substantially concurrent issue of shares of the Company ranking as to return of capital and dividends junior to
the Exchange Preference Shares, redeem or call for redemption, purchase or otherwise pay off, retire or make any return of capital in respect of any shares of the Company ranking as to capital junior
to the Exchange Preference Shares;
-
(iii)
-
redeem
or call for redemption, purchase, or otherwise pay off or retire for value or make any return of capital in respect of less than all of the
Exchange Preference Shares then outstanding; or
-
(iv)
-
except
pursuant to any purchase obligation, sinking fund, retraction privilege or mandatory redemption provisions attaching thereto, redeem or call for
redemption, purchase or otherwise pay off, retire or make any return of capital in respect of any Class A Preference Shares, ranking as to the payment of dividends or return of capital on a
parity with the Exchange Preference Shares
unless,
in each such case, all accrued and unpaid dividends up to and including the dividend payable for the last completed period for which dividends were payable on the Exchange Preference Shares
and on all other shares
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of
the Company ranking prior to or on a parity with the Exchange Preference Shares with respect to the payment of dividends have been declared and paid or set apart for payment.
Shareholder Approvals
In addition to any other approvals required by law, the approval of all amendments to the rights, privileges, restrictions and
conditions attaching to the Exchange Preference Shares
as a series and any other approval to be given by the holders of the Exchange Preference Shares may be given by a resolution carried by an affirmative vote of at least 662/3% of the
votes cast at a meeting at which the holders of at least 25% of the outstanding Exchange Preference Shares are present or represented by proxy or, if no quorum is present at such meeting, at an
adjourned meeting at which the holders of Exchange Preference Shares then present would form the necessary quorum. At any meeting of holders of Exchange Preference Shares as a series, each such holder
shall be entitled to one vote in respect of each Exchange Preference Share held.
The
Company will covenant that for so long as the Notes are outstanding no amendment will be made to the rights, privileges, restrictions and conditions of the Exchange Preferred Shares
(other than any amendments relating to the Class A Preference Shares as a class) without the prior approval of the holders of not less than a majority of the aggregate principal amount of the
Notes then outstanding.
Voting Rights
The holders of the Exchange Preference Shares will not (except as otherwise provided by law and except for meetings of the holders of
Class A Preference Shares as a class and meetings of all holders of Exchange Preference Shares as a series) be entitled to receive notice of, attend, or vote at, any meeting of shareholders of
the Company unless and until the Company shall have failed to pay eight quarterly dividends on the Exchange Preference Shares, whether or not consecutive and whether or not such dividends have been
declared and whether or not there are any monies of the Company properly applicable to the payment of dividends. In the event of such non-payment, and for only so long as any such dividends remain in
arrears, the holders of the Exchange Preference Shares will be entitled to receive notice of and to attend each meeting of the Company's shareholders (other than any meetings at which only holders of
another specified class or series are entitled to vote), and to one vote for each Exchange Preference Share held, provided that in respect of the election of directors, the holders of Exchange
Preference Shares will vote with holders of Class A Limited Voting Shares and, in certain circumstances, with the holders of certain other series of the Class A Preference Shares only in
the election of one-half of the Board of Directors (less the number of directors which the holders of the Class A Preference Shares, Series 2 may be entitled to elect if dividends on
such shares are in arrears). Upon payment of the entire amount of all Exchange Preference Share dividends in arrears, the voting rights of the holders of the Exchange Preference Shares shall forthwith
cease.
The
Company's articles provide that each holder of shares entitled to vote in an election of directors has the right to cast a number of votes equal to the number of votes attached to
the shares held by the holder of shares multiplied by the number of directors to be elected. The holder of shares may cast all such votes in favor of the candidate or distribute them among the
candidates in any manner the holder of shares sees fit. Where the holder of shares has voted for more than one candidate without specifying the distribution of votes among such candidates, the holder
of shares shall be deemed to have divided his or her votes equally among the candidates for whom the holder of shares voted.
Tax Election
The Company will elect, in the manner and within the time provided under Part VI.1 of the Income
Tax Act (Canada) (the "Tax Act"), to pay or cause payment of the tax, under Part VI.1 at a
rate such that the corporate holders of Exchange Preference Shares will not be required to pay tax under Part IV.1 of the Tax Act on dividends received on such shares.
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Book-Entry Only Form
Unless the Company elects otherwise, the Exchange Preference Shares will be issued in "book-entry only" form and may be purchased, held
and transferred in substantially the same manner as the Notes. See "Description of the Notes Book-Entry
Only Form."
UNDERWRITING
J.P. Morgan Securities LLC, BofA Securities, Inc., RBC Capital Markets, LLC and Wells Fargo Securities, LLC
are acting as the representatives (collectively, the "Representatives") to the several underwriters (collectively, the
"Underwriters") named in Schedule II to a certain underwriting agreement (the "Underwriting
Agreement") between BFI, the Company and the Representatives. Subject to the terms and conditions set forth in an Underwriting Agreement, BFI has agreed to sell to the
Underwriters, and each of the Underwriters has agreed, severally and not jointly, to purchase from BFI, the principal amount of Notes set forth opposite its name below.
|
|
|
|
|
Underwriter
|
|
Principal
Amount of Notes
($)
|
|
J.P. Morgan Securities LLC
|
|
$
|
76,000,000
|
|
BofA Securities, Inc.
|
|
|
76,000,000
|
|
RBC Capital Markets, LLC
|
|
|
76,000,000
|
|
Wells Fargo Securities, LLC
|
|
|
76,000,000
|
|
Citigroup Global Markets Inc.
|
|
|
28,000,000
|
|
SMBC Nikko Securities America, Inc.
|
|
|
28,000,000
|
|
Barclays Capital Inc.
|
|
|
8,000,000
|
|
BMO Capital Markets Corp.
|
|
|
8,000,000
|
|
Deutsche Bank Securities Inc.
|
|
|
8,000,000
|
|
HSBC Securities (USA) Inc.
|
|
|
8,000,000
|
|
Mizuho Securities USA LLC
|
|
|
4,000,000
|
|
MUFG Securities Americas Inc.
|
|
|
4,000,000
|
|
|
|
|
|
Total
|
|
$
|
400,000,000
|
|
|
|
|
|
Subject
to the terms and conditions set forth in the Underwriting Agreement, the Underwriters have agreed, severally and not jointly, to purchase all of the Notes sold under the
Underwriting Agreement if any of these Notes are purchased. If an Underwriter defaults, the Underwriting Agreement provides that the purchase commitments of the non-defaulting Underwriters may be
increased or the Underwriting Agreement may be terminated.
The
offering price of $400,000,000 (less the Underwriters' fees) will be payable in cash to BFI against delivery on or about October 16, 2020.
BFI
and the Company has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act and any Canadian securities laws, or to
contribute to payments the Underwriters may be required to make in respect of those liabilities.
The
Underwriters are offering the Notes, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel, including the
validity of the Notes, and other conditions contained in the Underwriting Agreement, such as the receipt by the Underwriters of officer's certificates and legal opinions. The Underwriting Agreement
provides that the obligations of the Underwriters to purchase the Notes may be terminated at their discretion if there is a material adverse change in the financial markets which makes it
impracticable to proceed with the Offering and may also be terminated upon the occurrence of certain stated events. The Underwriters reserve the right to withdraw, cancel or modify offers to the
public and to reject orders in whole or in part. The offering price and the other terms of the Notes have been determined by negotiation between BFI, the Company and the Underwriters.
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Table of Contents
This
Prospectus Supplement does not constitute an offer of the Notes, directly or indirectly, in Canada or to residents of Canada. Each Underwriter, severally and not jointly, has
represented and agreed that it has not offered or sold, directly or indirectly, and will not, directly or indirectly, offer, sell or deliver, any of the Notes in or from Canada or to any resident of
Canada.
Commissions and Discounts
The Representatives have advised BFI and the Company that the Underwriters propose initially to offer the Notes at the public offering
price set forth on the cover page of this Prospectus Supplement and may offer the Notes to dealers at that price less a concession not in excess of $0.15 per Note sold to institutional investors and
$0.50 per Note sold to retail investors. The Underwriters may allow, and those dealers may reallow, a discount not in excess of $0.45 per Note to certain other dealers. After the initial offering, the
public offering price, concession or any other term of the Offering may be changed.
The
following table shows the public offering price, underwriting commission and net proceeds from the Offering.
|
|
|
|
|
|
|
|
|
|
Per Note
|
|
Total(1)
|
|
Public offering price
|
|
|
100.0000%
|
|
$
|
400,000,000.00
|
|
Underwriting commission
|
|
|
2.4893%
|
|
$
|
9,957,112.50
|
|
Net Proceeds(2)
|
|
|
97.5107%
|
|
$
|
390,042,887.50
|
|
-
(1)
-
Reflects
$122,925,000.00 principal amount of Notes sold to institutional investors, for which the Underwriters received an underwriting commission of
$0.2500 per Note, and $277,075,000.00 principal amount of Notes sold to retail investors, for which the Underwriters received an underwriting commission of $0.7875 per Note.
-
(2)
-
After
deducting the underwriting commission but before accounting for any additional expenses of the Offering paid or payable by the Company.
We
estimate that total expenses of the Offering, excluding the underwriting commission, will be approximately $650,000.
New Issue of Notes
The Notes are a new issue of securities with no established trading market. BFI intends to apply for listing of the Notes on the NYSE.
If approved for listing, trading on the NYSE is expected to commence within 30 days after the Notes are first issued. BFI and the Company have been advised by the Underwriters that they
presently intend to make a market in the Notes after completion of the Offering. However, they are under no obligation to do so and may discontinue any market-making activities at any time without any
notice. BFI and the Company cannot assure the liquidity of the trading market for the Notes or that an active public market for the Notes will develop. If an active public trading market for the Notes
does not develop, the market price and liquidity of the Notes may be adversely affected. If the Notes are traded, they may trade at a discount from their initial offering price, depending on
prevailing interest rates, the market for similar securities, the Company's operating performance and financial condition, general economic conditions and other factors.
BFI
and the Company are under no obligation to, and do not intend to, list the Exchange Preference Shares on any stock exchange or other market.
No Sales of Similar Securities
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
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Table of Contents
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 the Company under any commercial paper program or under the Company's revolving credit facilities in effect on the date of the
underwriting agreement.
Price Stabilization, Short Positions
In connection with the Offering, the Underwriters may purchase and sell the Notes in the open market. These transactions may include
short sales, purchases on the open market to cover positions created by short sales and stabilizing transactions. Short sales involve the sale by the Underwriters of a greater principal amount of
Notes than they are required to purchase in the Offering. The Underwriters must close out any short position by purchasing Notes in the open market. A short position is more likely to be created if
the Underwriters are concerned that there may be downward pressure on the price of the Notes in the open market after pricing that could adversely affect investors who purchase in the Offering.
Stabilizing transactions consist of various bids for or purchases of Notes made by the Underwriters in the open market to peg, fix or maintain the price of the Notes prior to the completion of
the Offering.
Similar
to other purchase transactions, the Underwriters' purchases to cover the syndicate short sales may have the effect of raising or maintaining the market price of the Notes or
preventing or retarding a decline in the market price of the Notes. As a result, the price of the Notes may be higher than the price that might otherwise exist in the open market.
Neither
BFI, the Company nor any of the Underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have
on the price of the Notes. In addition, neither BFI, the Company nor any of the Underwriters make any representation that the Underwriters will engage in these transactions or that these transactions,
once commenced, will not be discontinued without notice.
Other Relationships
Some of the Underwriters and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial
dealings in the ordinary course of business with BFI, the Company or its affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions. In
particular, affiliates of certain of the Underwriters are lenders under
the Company and its subsidiaries' credit facilities for which they have received, and in the future would receive, customary fees.
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 and/or instruments of ours or our affiliates. Certain of the Underwriters or their affiliates have a lending relationship with the Company and routinely hedge, and
certain other of those Underwriters or their affiliates may hedge, their credit exposure to the Company consistent with their customary risk management policies. Typically, these 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. Any such credit default swaps or short positions could adversely affect future trading prices of the Notes. The Underwriters and their affiliates may also make investment
recommendations and/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 and/or short
positions in such securities and instruments.
Settlement
The Company expects that delivery of the Notes will be made against payment therefor on or about the date specified on the cover page
of this Prospectus Supplement, which will be the fifth business day following the date of pricing of the Notes (this settlement cycle being referred to as "T+5"). Under Rule 15c6-1 of the
U.S. 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
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prior
to their delivery hereunder will be required, by virtue of the fact that the Notes initially will settle in T+5, to specify an alternate settlement cycle at the time of any such trade to prevent
a failed settlement. Purchasers of the Notes who wish to make such trades should consult their own advisor.
Selling Restrictions
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") or in the United Kingdom
(the "UK"). 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 Directive 2017/1129 (as amended, the "Prospectus
Regulation"). Consequently no key information document required by Regulation (EU) No 1286/2014 (as amended or superseded, the "PRIIPs
Regulation") for offering or selling the Notes or otherwise making them available to retail investors in the EEA or in the UK has been prepared and therefore offering or
selling the Notes or otherwise making them available to any retail investor in the EEA or in the UK 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.
References
to Regulations or Directives include, in relation to the UK, those Regulations or Directives as they form part of UK domestic law by virtue of the European Union (Withdrawal)
Act 2018 or have been implemented in UK domestic law, as appropriate.
The
above selling restrictions is in addition to any other selling restriction set out below.
Notice to Prospective Investors in the United Kingdom
In the UK, this prospectus supplement and the accompanying short form base shelf prospectus is being distributed only to, and is
directed only at, and any offer subsequently made may only be directed at persons who (i) have professional experience in matters relating to investments and who qualify as investment
professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the "Financial
Promotion Order"), (ii) are persons falling within Article 49(2)(a) to (d) ("high net worth companies, unincorporated associations, etc.") of the
Financial Promotion Order, (iii) are outside the UK, or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of Section 21 of
the Financial Services and Markets Act 2000, as amended (the "FSMA")) in connection with the issue or sale of any notes may otherwise lawfully be
communicated or caused to be communicated (all such persons together being referred to as "relevant persons"). This prospectus supplement and the
accompanying short form base shelf prospectus is directed only at relevant persons and must not be acted on or relied on in the UK by persons who are not relevant persons. In the UK, any investment or
investment activity to which this prospectus supplement and the accompanying short form base shelf prospectus relates is available only to relevant persons and will be engaged in only with relevant
persons.
Notice to Prospective Investors in Hong Kong
The Notes have not been offered or sold and will not be offered or sold in Hong Kong, by means of any document, 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. No advertisement, invitation or document relating to the Notes has been or may be issued or has been or may be in the possession of any person for the purposes of issue, whether in
Hong Kong or elsewhere, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the
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Table of Contents
securities
laws of Hong Kong) other than with respect to the Notes which 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.
Notice to Prospective Investors in Japan
The Notes have not been and will not be registered under the Financial Instruments and Exchange Law of Japan
(the "Financial Instruments and Exchange Law") and each Underwriter has agreed that it will not offer or sell any Notes, directly or indirectly,
in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of
Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in
compliance with, the Financial Instruments and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan.
Notice to Prospective Investors in Singapore
This Prospectus Supplement and the accompanying Base Shelf Prospectus have not been registered as a prospectus with the Monetary
Authority of Singapore. Accordingly, this Prospectus Supplement and the accompanying Base Shelf Prospectus 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 pursuant to Section 275(1), 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 of the SFA by a relevant person which is:
-
(a)
-
a
corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) 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
-
(b)
-
a
trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who
is an accredited investor,
securities
(as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries' rights and interest (howsoever described) in that trust shall not be transferred within six
months after that corporation or that trust has acquired the Notes pursuant to an offer made under Section 275 of the SFA except:
-
(a)
-
to
an institutional investor or to a relevant person defined in Section 275(2) of the SFA, or to any person arising from an offer referred to in
Section 275(1A) or Section 276(4)(i)(B) of the SFA;
-
(b)
-
where
no consideration is or will be given for the transfer;
-
(c)
-
where
the transfer is by operation of law;
-
(d)
-
as
specified in Section 276(7) of the SFA; or
-
(e)
-
as
specified in Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005
of Singapore.
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, the Company 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).
Notice to Prospective Investors in Canada
The Notes offered under this Prospectus Supplement and the accompanying Base Shelf Prospectus are not being, and may not be, offered or
sold, directly or indirectly, in Canada or to any resident of Canada.
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Table of Contents
PRIOR SALES
No debt securities have been issued by BFI during the 12 months preceding the date of this prospectus supplement except for
the following:
-
-
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 (the "additional 2030 notes") on substantially the same terms as the original 2030 notes.
-
-
On September 28, 2020, BFI issued $500 million principal amount of the 2051 Notes at a price of 99.313% of
their principal amount.
CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
In the opinion of Torys LLP, counsel to the Company, and Goodmans LLP, counsel to the Underwriters, the following is a
summary of the principal Canadian federal income tax considerations generally applicable to a holder of Notes or Exchange Preference Shares who acquires, as beneficial owner, Notes pursuant to the
Offering and any Exchange Preference Shares on the exchange of such Notes and who, for purposes of the Income Tax Act (Canada)
(the "Tax Act") and the regulations thereunder (the "Regulations") and at all
relevant times, (i) is not, and is not deemed to be, resident in Canada; (ii) deals at arm's length with BFI, the Company, and their respective affiliates and the Underwriters and is not
affiliated with BFI. the Company or any of their respective affiliates; (iii) deals at arm's length with any transferee resident (or deemed to be resident) in Canada to whom the holder
disposes of a Note; (iv) holds Notes and will hold any Exchange Preference Shares as capital property; (v) does not, and is not deemed to, use or hold the Notes or Exchange Preference
Shares in a business carried on in Canada; and (vi) is not a "specified non-resident shareholder" (within the meaning of subsection 18(5) of the Tax Act) of BFI or a non-resident
person not dealing at arm's length with a "specified shareholder" (within the meaning of subsection 18(5) of the Tax Act) of BFI (a "Non-Resident
Holder"). Special rules, which are not discussed in this summary, may apply to certain Non-Resident Holders that are insurers carrying on an insurance business in Canada and
elsewhere or "authorized foreign banks" (as defined in the Tax Act). This 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.
This
summary is based upon the current provisions of the Tax Act and the Regulations in force as of the date hereof, 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 (the "Tax Proposals") and counsel's
understanding of the current administrative policies and assessing practices of the Canada Revenue Agency ("CRA") published in writing prior to the date
hereof. This summary assumes that the Tax Proposals will be enacted in the form proposed. However, no assurance can be given that such proposals will be enacted in their current form or at all. This
summary is not exhaustive of all Canadian federal income tax considerations and, except for the Tax Proposals, does not take into account or anticipate any changes in law or CRA administrative
policies or assessing practices, whether by way of legislative, governmental or judicial decision or action, nor does it take into account or consider any other federal tax considerations or any
provincial, territorial or foreign tax considerations, which may differ materially from those discussed herein.
Generally,
for purposes of the Tax Act, all amounts relating to the acquisition, holding or disposition of Notes or Exchange Preference Shares must be determined in Canadian
dollars. Any such amount that is expressed
or denominated in a currency other than Canadian dollars must be converted into Canadian dollars using the relevant exchange rate determined in accordance with the Tax Act.
This summary is of a general nature only and is not, and is not intended to be, and should not be construed to be, legal or tax advice to any particular
Non-Resident Holder and no representation with respect to the income tax consequences to any particular Non-Resident Holder is made. Prospective purchasers of Notes should consult their own tax
advisors with respect to the tax consequences of acquiring, holding and disposing of Notes and Exchange Preference Shares having regard to their own particular circumstances.
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Notes
Interest on and disposition of the Notes
Under the Tax Act, interest, principal and premium, if any, paid or credited, or deemed to be paid or credited, to a
Non-Resident Holder on Notes will not be subject to Canadian non-resident withholding tax. No other taxes on income (including taxable capital gains) will be payable under the Tax Act in
respect of the acquisition, holding, redemption or disposition of Notes, or the receipt of interest, premium or principal thereon by a Non-Resident Holder solely as a consequence of such acquisition,
holding, redemption or disposition of Notes.
Automatic Exchange
An exchange of Notes into Exchange Preference Shares pursuant to an Automatic Exchange will result in a disposition of such Notes for
purposes of the Tax Act for proceeds equal to the fair market value of the Exchange Preference Shares which the Non-Resident Holder acquires on the exchange, not including any amount considered
to be interest. A Non-Resident Holder will not generally be subject to tax under the Tax Act in respect of such disposition. The aggregate cost to a Non-Resident Holder
of the Exchange Preference Shares acquired on an Automatic Exchange will be equal to the fair market value thereof at the time of the Automatic Exchange.
Exchange Preference Shares
Dividends
Dividends paid or credited, or deemed to be paid or credited, to a Non-Resident Holder on Exchange Preference Shares will generally be
subject to Canadian non-resident withholding tax under the Tax Act at a rate of 25 percent, subject to any reduction in the rate of such withholding under the provisions of an applicable
income tax treaty or convention between Canada and the Non-Resident Holder's country of residence. For example, under the Canada-United States Tax Convention
(1980) (the "Treaty"), the rate of withholding tax for a Non-Resident Holder who is a resident of the
United States and who qualifies for the benefits of the Treaty will generally be reduced to 15 percent.
Dispositions
A Non-Resident Holder of Exchange Preference Shares who disposes of or is deemed to dispose of Exchange Preference Shares (other than
as discussed below under " Redemption or Other Acquisition by the Company") will not be subject to tax under the
Tax Act in respect of any capital gain realized on a disposition of Exchange Preference Shares unless the Exchange Preference Shares constitute, or are deemed to constitute, "taxable Canadian
property" (as defined in the Tax Act) of the Non-Resident Holder at the time of the disposition and the Non-Resident Holder is not entitled to relief under an applicable income tax
treaty or convention between Canada and the Non-Resident Holder's country of residence. If the Exchange Preference Shares are not listed on a designated stock exchange, such shares will be considered
taxable Canadian property if, at any time during the 60-month period immediately preceding the disposition, the Exchange Preference Shares derived (directly or indirectly) more than 50 percent
of their fair market value from one or any combination of real or immovable property situated in Canada, "Canadian resource properties", "timber resource properties" or options in respect of, or
interests in or rights in, any such property (whether or not such property exists), all as defined for the purposes of the Tax Act. An applicable income tax treaty or convention between Canada
and the Non-Resident Holder's country of residence may apply to exempt the Non-Resident Holder from tax under the Tax Act in respect of any capital gain realized on a disposition of Exchange
Preference Shares notwithstanding that such shares may constitute taxable Canadian property.
Non-Resident
Holders whose Exchange Preference Shares may be taxable Canadian property should consult their own tax advisors, including with respect to any notification or tax
filing obligations under the Tax Act.
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Redemption or Other Acquisition by the Company
If the Company redeems for cash or otherwise acquires the Exchange Preference Shares, other than by way of a purchase in the open
market in the manner in which shares are normally purchased by a member of the public in the open market (if one develops in respect of the Exchange Preference Shares), the Non-Resident Holder
will be deemed to have received a dividend equal to the amount, if any, paid by the Company in excess of the paid-up capital of such shares for purposes of the Tax Act at such time. Such deemed
dividend will be subject to the treatment described above under "Dividends". The paid-up capital of the Exchange Preference Shares may be less than
their redemption amount and therefore all or a portion of the amount paid by the Company may be treated as a dividend. The difference between the amount paid and the amount of the deemed dividend will
be treated as proceeds of disposition for the purposes of computing any capital gain or capital loss arising on a disposition of such shares. See the section above under the heading
" Dispositions".
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following is a general summary of certain U.S. federal income tax considerations generally applicable to U.S. Holders
(as defined below) of purchasing, owning, and disposing of the Notes and the Exchange Preference Shares. This summary addresses only U.S. Holders who purchase the Notes in the Offering at the
"issue price," which is the first price at which a substantial amount of the Notes is sold for cash (other than to bond houses, brokers, or similar persons or organizations acting in the capacity of
underwriters, placement agents, or wholesalers), and who hold the Notes and the Exchange Preference Shares as capital assets for U.S. federal income tax purposes. This summary does not describe
all of the tax consequences that may be relevant to you in light of your particular circumstances, including estate and gift tax, alternative minimum tax and Medicare contribution tax consequences, as
well as differing tax consequences that may apply if you are a holder subject to special rules, for instance:
-
-
a financial institution;
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a real estate investment trust, a regulated investment company, or an insurance company;
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a dealer in securities or currencies;
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a dealer or trader in securities that uses a mark-to-market method of tax accounting;
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a person holding the Notes as part of a hedging transaction, "straddle," conversion transaction, constructive sale, or
other integrated transaction;
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a person whose functional currency is not the U.S. dollar;
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a tax-exempt entity, qualified retirement plan, individual retirement account, or other deferred account;
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a person that owns directly, indirectly, or constructively 10% or more, by vote or value, of the outstanding equity
interests of the Company or BFI;
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a person subject to special tax accounting rules under Section 451(b) of the Code;
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a U.S. expatriate; or
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a partnership, S corporation, or other pass-through entity for U.S. federal income tax purposes, or a partner
therein.
If
you are an entity or arrangement classified as a partnership for U.S. federal income tax purposes, the U.S. federal income tax treatment of you and your partners
generally will depend on the status of the partners and your activities. If you are a partnership owning the Notes or a partner in such partnership, you should consult your tax adviser as to the
particular U.S. federal income tax consequences of owning the Notes.
This
discussion is based on the Internal Revenue Code of 1986, as amended (the "Code"), final, temporary, and proposed Treasury
regulations thereunder (the "Treasury Regulations"), administrative pronouncements, and judicial decisions, all as in effect on the date hereof.
All of the foregoing authorities are subject to differing interpretations or change (possibly with retroactive effect), and any such differing interpretations or change may result in
U.S. federal income tax consequences to you that are materially different from those described herein.
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No
ruling from the IRS has been or will be sought with respect to the matters described below, and the IRS may take a different view of the consequences described below.
This
discussion does not address any aspect of state, local, or non-U.S. taxation, or any taxes other than U.S. federal income taxes. You should consult your tax adviser
with regard to the application of the U.S. federal tax laws to your particular situation, as well as any tax consequences arising under the laws of any state, local, or non-U.S. taxing
jurisdiction.
For
purposes of this discussion, a U.S. Holder is a beneficial owner of a Note or an Exchange Preference Share that is, for U.S. federal income tax
purposes:
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a citizen or an individual who is a resident of the United States;
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a corporation, or other entity treated as a corporation, created or organized in or under the laws of the
United States, any state therein, or the District of Columbia;
-
-
an estate the income of which is subject to U.S. federal income taxation regardless of its source; or
-
-
a trust (i) the administration of which is subject to the primary supervision of a court within the
United States and one or more U.S. persons have the authority to control all substantial decisions of the trust or (ii) that has a valid election in effect under applicable
Treasury Regulations to be treated as a U.S. person.
The following discussion is for general information only and is not intended to be, nor should it be construed to be, legal or tax advice to any holder or
prospective holder of Notes or Exchange Preference Shares, and no opinion or representation with respect to the U.S. federal income tax consequences to any such holder or prospective holder is
made. U.S. Holders should consult their tax advisers with respect to the U.S. federal, state, local, and non-U.S. tax consequences of the acquisition, ownership, and disposition
of Notes or Exchange Preference Shares.
Tax Treatment of the Notes
The determination of whether an instrument is properly treated as indebtedness or equity for U.S. federal income tax purposes is
based on all the relevant facts and circumstances at the time the instrument is issued. There is no direct legal authority as to the proper U.S. federal income tax treatment of an instrument
with substantially identical terms to the Notes. In the absence of authority directly addressing the proper treatment of instruments such as the Notes, to the extent required to do so, we intend to
treat the Notes as debt for U.S. federal income tax purposes. However, we will not request any ruling from the IRS regarding the treatment of the Notes for U.S. federal income tax
purposes, and the IRS or a court may conclude that the Notes should be treated as equity for U.S. federal income tax purposes (as described below). Prospective investors should consult
their tax advisers as to the proper characterization of the Notes for U.S. federal income tax purposes.
Consequences if the Notes are Treated as Debt Instruments for U.S. Federal Income Tax Purposes
The discussion in this section assumes that the Notes are treated as indebtedness of BFI (and not of the Company) for
U.S. federal income tax purposes. It is possible that the IRS or a court may conclude that the Notes should be treated as indebtedness of the Company for U.S. federal income tax
purposes, in which case the consequences to U.S. Holders described below under
"Automatic Exchange" might be different. U.S. Holders should consult their tax advisers as to the proper characterization of the Notes for U.S. federal
income tax purposes.
Certain Additional Payments
In certain circumstances (for example, as described under "Description of the
Notes Redemption on Tax Event or Rating Event") we may be obligated to pay amounts on the Notes that are in excess of stated interest or
principal on the Notes. These potential payments may implicate the provisions of Treasury Regulations relating to "contingent payment debt instruments." We do not intend to treat the possibility of
paying such additional amounts as causing the Notes to be treated as contingent payment debt instruments. It is possible that the IRS may take a contrary position. If the IRS takes a contrary
position, you may be required to accrue interest income
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based
upon a "comparable yield" (as defined in the Treasury Regulations) determined at the time of issuance of the Notes, with adjustments to such accruals when any contingent payments are made
that differ from the payments based on the comparable yield. In addition, any income on the sale or other taxable disposition of the Notes would be treated as interest income rather than as capital
gain. Our determination that the Notes are not contingent payment debt instruments is binding on you unless you disclose a contrary position to the IRS in the manner that is required by applicable
Treasury Regulations. The remainder of this discussion assumes that the Notes are not treated as contingent payment debt instruments. You should consult your tax adviser regarding the tax consequences
to you if the Notes are treated as contingent payment debt instruments.
Payments of Interest
Subject to the discussion below relating to our option to defer payments of interest on the Notes, we expect, and this discussion
assumes, that the Notes will be issued without OID for U.S. federal income tax purposes. Accordingly, stated interest on the Notes should be taxable to you as ordinary income when paid or
accrued in accordance with your method of accounting for U.S. federal income tax purposes.
Under
the terms of the Notes, we have the option to defer payments of interest from time to time for up to five consecutive years. Treasury Regulations provide that a debt instrument
will not be treated as issued with OID by reason of its issuer's ability to defer payments of interest if the likelihood of such deferral is "remote." We intend to take the position, and this
discussion assumes, that, as of the date of this Prospectus
Supplement, the likelihood of deferring payments of interest under the terms of the Notes is "remote" within the meaning of the Treasury Regulations. Based on the foregoing, we do not intend to treat
the Notes as issued with OID by reason of our deferral option. Accordingly, stated interest on the Notes should be taxable to you as ordinary income when paid or accrued in accordance with your method
of accounting for U.S. federal income tax purposes. Our position is not binding on the IRS or a court. If the IRS or a court takes a contrary position, you may be required to accrue OID from
the time of issuance, as described below, regardless of your method of accounting for U.S. federal income tax purposes.
In
the event we exercise our option to defer payments of interest, the Notes would be treated as retired and reissued for their issue price solely for purposes of the OID rules, and you
would be required to treat all stated interest on the deemed reissued Notes as OID. Consequently, during any Deferral Period, and any period thereafter, you would include all stated interest in gross
income as it accrues using a constant yield method before the receipt of cash. The calculation of the amount of such accruals may be complex, and therefore you should consult your tax adviser
regarding the tax consequences to you if the Notes are treated as issued (or deemed reissued) with OID.
The
amount of interest on the Notes that is taxable as ordinary income will include any amounts withheld in respect of Canadian taxes and, without duplication, any additional amounts
paid with respect thereto. Interest on the Notes will be foreign-source income for foreign tax credit limitation purposes.
Sale or Other Taxable Disposition of the Notes
Upon the sale or other taxable disposition of a Note, you generally will recognize taxable gain or loss equal to the difference between
the amount realized on the sale or other taxable disposition (less any amount equal to accrued but unpaid interest, which will be taxable as interest income, as described above) and your adjusted tax
basis in the Note. Assuming we do not exercise our option to defer interest payments on the Notes and the Notes are not otherwise treated as issued with OID, your tax basis in a Note generally will
equal the cost of your Note. If the Notes are treated as issued (or deemed reissued) with OID, your adjusted tax basis in a Note generally will equal the cost of your Note, increased by any OID
previously included in income, and decreased by payments received on the Note after the date of such issuance (or deemed reissuance, as applicable). Any gain or loss generally will be
U.S.-source income or loss for purposes of calculating your foreign tax credit limitation.
Gain
or loss recognized on the sale or other taxable disposition of a Note generally will be capital gain or loss and will be long-term capital gain or loss if at the time of the sale or
other taxable disposition the Note has been held for more than one year. Long-term capital gains recognized by non-corporate U.S. Holders are subject to reduced tax rates. The deductibility of
capital losses is subject to limitations.
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Automatic Exchange
Upon the exchange of Notes for Exchange Preference Shares pursuant to the Automatic Exchange, you generally should recognize capital
gain or loss, for U.S. federal income tax purposes, equal to the difference between (i) the sum of the fair market value as of the Exchange Time of the Exchange Preference Shares
received (less any amount in respect of accrued but unpaid interest, which will be taxable as interest income, as described above under "Payments of
Interest") and (ii) your adjusted tax basis in the Notes exchanged. Your initial tax basis in the Exchange Preference Shares received will equal the fair market value of
the shares received, and your holding period for the Exchange Preference Shares received will commence on the day after the date of receipt. Gain or loss so recognized pursuant to the Automatic
Exchange generally will be treated as described above under "Sale or Other Taxable Disposition of the Notes."
Consequences if the Notes are Treated as Equity for U.S. Federal Income Tax Purposes
The discussion in this section assumes that the Notes are treated as equity of BFI (and not of the Company) for
U.S. federal income tax purposes.
Payments of Interest
In general, the gross amount of each payment of interest on the Notes (including any amounts withheld in respect of Canadian taxes and,
without duplication, any additional amounts paid with respect thereto) will be included in your gross income as a dividend to the extent paid out of BFI's current or accumulated earnings and profits
(as determined under U.S. federal income tax principles). Subject to the discussion below under "PFIC Considerations," to the extent that
the amount of any such payment exceeds BFI's current and accumulated earnings and profits, it will be treated first as a tax-free return of your tax basis in the Notes, and to the extent the amount of
such payment exceeds your tax basis, the excess will be treated as capital gain. BFI currently does not intend to calculate its earnings and profits under U.S. federal income tax principles.
Thus, in the event that the Notes are treated as equity for U.S. federal income tax purposes, you should expect that payments of interest will be reported as dividends for U.S. federal
income tax purposes.
If
you are a non-corporate U.S. Holder, certain dividends paid to you by "qualified foreign corporations" may be taxed at preferential rates generally applicable to long-term
capital gains. However, these favorable rates are available only if certain conditions are met, including that you hold the applicable security for a minimum period during which you are not protected
from the risk of loss. The IRS has ruled that where a
security treated as equity for U.S. federal income tax purposes provides for repayment of the principal amount at maturity, a holder's creditor rights with respect to the principal repayment
may constitute protection from the risk of loss. Moreover, the Company's full and unconditional guarantee, on a subordinated basis, as to payment of principal, premium (if any) and interest and
certain other amounts on the Notes may constitute protection from the risk of loss. Accordingly, the minimum holding period requirement might not be met with respect to the Notes. Moreover, even if
the holding period requirement is met, such preferential rates will not apply if BFI is treated as a PFIC for the taxable year in which the dividend is paid or for the preceding taxable year. Interest
payments on the Notes will not be eligible for the dividends-received deduction allowed to corporations. You should consult your tax adviser regarding the application of the relevant rules in light of
your particular circumstances.
Interest
on the Notes generally will constitute foreign-source income for foreign tax credit limitation purposes. However, if, as described above, your creditor rights with respect to
the principal repayment (or the Company's guarantee) constitute protection from the risk of loss, you may not be able to meet the minimum holding period necessary to claim foreign tax credits
in the case that any Canadian tax is withheld from interest payments. The rules governing the foreign tax credit are complex. You should consult your tax adviser regarding the availability of the
foreign tax credit with respect to your particular circumstances.
Sale or Other Taxable Disposition of the Notes
Subject to the discussion below under "PFIC Considerations," upon the sale or other
taxable disposition of a Note, you generally will recognize taxable gain or loss equal to the difference between the amount realized on the sale or taxable disposition and your adjusted tax basis in
the Note. Your adjusted tax basis in a Note generally will equal the cost of the Note. Gain or loss, if any, generally will be U.S.-source income or loss for
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purposes
of calculating your foreign tax credit limitation. Gain or loss recognized on the sale or other taxable disposition of a Note generally will be capital gain or loss and will be long-term
capital gain or loss if at the time of the sale or other taxable disposition the Note has been held for more than one year. Long-term capital gains recognized by non-corporate taxpayers are subject to
reduced tax rates. The deductibility of capital losses is subject to limitations.
PFIC Considerations
In general, a non-U.S. corporation will be treated as a PFIC for any taxable year in which (i) 75% or more of its gross
income is "passive income" under the PFIC rules or (ii) 50% or more of the average quarterly value of its assets consists of assets that produce, or are held for the production of, "passive
income." Passive income generally includes interest, dividends, rents, royalties, and certain gains. For purposes of the foregoing tests, passive income does not include interest or dividends received
or accrued from a "related person" (as defined under the Code) to the extent such amounts are properly allocable to income of such related person which is not passive income. If a corporation
is treated as a PFIC with respect to you for any taxable year, it generally will continue to be treated as a PFIC with respect to you in all succeeding taxable years, regardless of whether the
corporation continues to meet the PFIC requirements in such years, unless certain elections are made.
BFI
has made no determination as to whether it is likely to be a PFIC for any taxable year. The determination of whether a non-U.S. corporation such as BFI is a PFIC is based on
the application of complex U.S. federal income tax rules, which are subject to differing interpretations, and will depend on the composition of the corporation's income and assets from time to
time and the nature of its activities. PFIC classification is factual in nature, and generally cannot be determined until the close of the taxable year in question. Consequently, there can be no
assurance regarding the PFIC status of BFI for the current or any future taxable year.
If
BFI were a PFIC for any taxable year during which you owned Notes, and such Notes were treated for U.S. federal income tax purposes as equity of BFI, then gain recognized by
you on a sale or other taxable disposition of the Notes would be allocated ratably over your holding period for the Notes. The amounts allocated to the taxable year of the sale or other taxable
disposition and to any year before BFI became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for
individuals or corporations, as appropriate, for that taxable year, and an interest charge would be imposed on the resulting tax liability. Similar treatment may apply to certain excess distributions.
Certain elections might be available that would result in alternative treatments (such as mark-to-market treatment) of the Notes. Subject to certain exceptions, a U.S. person that owns an
interest in a PFIC generally is required to file an annual report with the IRS. You should consult your tax adviser regarding the application of the PFIC rules, including the foregoing filing
requirements, as well as the advisability of making any available election to mitigate the adverse consequences relating to PFIC status, with respect to your ownership and disposition of
the Notes.
Consequences of the Ownership and Disposition of Exchange Preference Shares
Taxation of Distributions
In general, the gross amount of a distribution paid to you with respect to Exchange Preference Shares (including any amounts withheld
in respect of Canadian taxes) will be included in your gross income as a dividend to the extent paid out of the Company's current or accumulated earnings and profits (as determined under
U.S. federal income tax principles). Subject to the discussion below under "PFIC Considerations," to the extent that the amount of a distribution
exceeds the Company's current and accumulated earnings and profits, it will be treated first as a tax-free return of your tax basis in the Exchange Preference Shares, and to the extent the amount of
the distribution exceeds your tax basis, the excess will be treated as capital gain. The Company currently does not intend to calculate its earnings and profits under U.S. federal income tax
principles. Thus, you should expect that distributions will be reported as dividends for U.S. federal income tax purposes.
If
the Exchange Preference Shares are readily tradable on an established U.S. securities market within the meaning of the Code or if the Company is eligible for benefits under the
income tax treaty between Canada and the United States, the Company generally would constitute a "qualified foreign corporation" for U.S. federal
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income
tax purposes. In such case, dividends received by non-corporate U.S. Holders of Exchange Preference Shares generally would be subject to tax at preferential rates applicable to long-term
capital gains, provided that such holders meet certain holding period and other requirements and the Company is not treated as a PFIC for the taxable year in which the dividend is paid or for the
preceding taxable year. Dividends on Exchange Preference Shares generally will not be eligible for the dividends-received deduction allowed to corporations. You should consult your tax adviser
regarding the application of the relevant rules in light of your particular circumstances.
Dividends
paid by the Company generally will constitute foreign-source income for foreign tax credit limitation purposes. You may be entitled to deduct or credit any Canadian withholding
taxes on dividends in determining your U.S. income tax liability, subject to certain limitations (including that the election to deduct or credit foreign taxes applies to all of your foreign
taxes for a particular tax year). The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. Dividends distributed by the Company with
respect to Exchange Preference Shares generally will constitute "passive category income." The rules governing the foreign tax credit are complex. You should consult your tax adviser regarding the
availability of the foreign tax credit with respect to your particular circumstances.
Sale or Other Taxable Disposition of Exchange Preference Shares
Subject to the discussion below under "PFIC Considerations," upon the sale or other
disposition of Exchange Preference Shares, you generally will recognize gain or loss for U.S. federal income tax purposes equal to the difference between the amount realized and your adjusted
tax basis in the Exchange Preference Shares. Gain or loss generally will be capital gain or loss and will be long-term capital gain or loss if at the time of the sale or other taxable disposition your
holding period for the Exchange Preference Shares is more than one year. Long-term capital gains recognized by non-corporate taxpayers are subject to reduced tax rates. The deductibility of capital
losses is subject to limitations. Gain recognized by you from a sale or other taxable disposition of Exchange Preference Shares generally will be treated as income from U.S. sources for foreign
tax credit limitation purposes.
PFIC Considerations
Based on its current income, assets, and activities, the Company does not expect to be classified as a PFIC for the current taxable
year or for the foreseeable future. However, the determination of whether the Company is a PFIC is based on the application of complex U.S. federal income tax rules, which are subject to
differing interpretations, and will depend on the composition of the Company's income and assets from time to time and the nature of its activities. PFIC classification is factual in nature, and
generally cannot be determined until the close of the taxable year in question. Consequently, there can be no assurance regarding the PFIC status of the Company for the current or any future taxable
year. If the Company were treated as a PFIC for any taxable year during your holding period for Exchange Preference Shares, then the U.S. federal income tax consequences described above under
"Consequences if the Notes are Treated as Equity for U.S. Federal Income Tax Purposes PFIC
Considerations" generally would apply to your ownership and disposition of Exchange Preferences Shares. You should consult your tax adviser regarding the potential application
of the PFIC rules to your ownership and disposition of Exchange Preference Shares.
Backup Withholding and Information Reporting
Information returns may be required to be filed with the IRS in connection with payments on the Notes (and OID, if applicable),
proceeds received from a sale or other disposition of the Notes, dividends received with respect to the Exchange Preference Shares and proceeds from the disposition of those shares, unless you are an
exempt recipient. You may also be subject to backup withholding on these payments in respect of your Notes or Exchange Preference Shares unless you provide your taxpayer identification number and
otherwise comply with applicable requirements of the backup withholding rules or you provide proof of an applicable exemption. Amounts withheld under the backup withholding rules are not additional
taxes and may be refunded or credited against your U.S. federal income tax liability, provided the required information is timely furnished to the IRS.
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You
may be required to report information relating to an interest in the Notes (and OID, if applicable) or Exchange Preference Shares or an account through which the Notes or
Exchange Preference Shares are held, subject to certain exceptions (including an exception for Notes or Exchange Preference Shares held in accounts maintained by certain U.S. financial
institutions), by attaching a complete IRS Form 8938 to your tax return for each year in which you hold an interest in the Notes or Exchange Preference Shares. You should consult your
tax adviser regarding information reporting requirements relating to your ownership of the Notes or Exchange Preference Shares.
INTERESTS OF EXPERTS
Certain legal matters in connection with the Offering hereunder will be passed upon on behalf of BFI and the Company by
Torys LLP of Toronto, Ontario and New York, New York with respect to Canadian and U.S. legal matters. Certain legal matters in connection with the Offering hereunder will
be passed upon on behalf of the Underwriters by Skadden, Arps, Slate, Meagher & Flom LLP of Toronto, Ontario and Goodmans LLP of Toronto, Ontario. As of the date hereof, the
partners and associates of Torys LLP, as a group, and Goodmans LLP, as a group, beneficially own, directly or indirectly, less than 1% of the outstanding securities of the Company,
respectively.
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.
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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.
|
|
|
New Issue
|
|
October 6, 2020
|
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
|
|
|
|
|
BROOKFIELD FINANCE INC.
|
|
BROOKFIELD FINANCE II INC.
|
|
BROOKFIELD FINANCE LLC
|
Debt Securities
|
|
Debt Securities
|
|
Debt Securities
|
BROOKFIELD FINANCE II LLC
|
|
BROOKFIELD FINANCE (AUSTRALIA) PTY LTD
|
|
BROOKFIELD FINANCE I (UK) PLC
|
Preferred Shares
(representing limited liability
company interests)
|
|
Debt Securities
|
|
Debt Securities
|
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.
Table of Contents
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
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
Table of Contents
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
Table of Contents
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
Table of Contents
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
Table of Contents
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
Table of Contents
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
Table of Contents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
Table of Contents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
Table of Contents
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
Table of Contents
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
Table of Contents
-
-
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
Table of Contents
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.
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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.)
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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.)
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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
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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
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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
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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
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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
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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
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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.
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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
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$
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454,300
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Exchange listing fees
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*
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Blue sky fees and expenses
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*
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Trustee & transfer agent fees
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*
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Printing and engraving costs
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*
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Legal fees and expenses
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*
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Accounting fees and expenses
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*
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Miscellaneous
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*
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Total
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$
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*
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-
*
-
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.
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BROOKFIELD FINANCE INC.
U.S.$400,000,000
4.625% Subordinated Notes due October 16, 2080
Fully and unconditionally guaranteed, on a subordinated basis, by Brookfield Asset Management Inc.
Class A Preference Shares, Series 50 of Brookfield Asset Management Inc. Issuable Upon Automatic Exchange
PROSPECTUS SUPPLEMENT
Joint Book-Running Managers
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J.P. Morgan
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BofA Securities
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RBC Capital Markets
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Wells Fargo Securities
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Co-Managers
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Citigroup
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SMBC Nikko
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Barclays
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BMO Capital Markets
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Deutsche Bank Securities
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HSBC
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Mizuho Securities
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MUFG
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October 8, 2020
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