DBRS Rates Brookfield Asset Management’s Proposed $350 Million Unsecured Medium Term Notes at A (low), Stable Trend

DBRS has today assigned a provisional rating of A (low) to a proposed $350 million Unsecured Medium Term Notes (the Notes) to be issued by Brookfield Asset Management Inc. (Brookfield or the Company). The trend is Stable. The provisional rating is based on draft term sheets provided by the Company on January 28, 2013. The assignment of a final rating is subject to receipt by DBRS of final documentation that is consistent with that which DBRS has already reviewed.

The proposed Notes, a $175 million tranche maturing April 2019 and a $175 million tranche maturing March 2023, will be an unsecured obligation and will rank equally and ratably with all of the Company’s other unsecured and unsubordinated obligations. Proceeds of the Notes will be used for the redemption of the $150 million unsecured debt maturing June 2014 (including related costs), refinancing of the US$75 million unsecured debt maturing October 2013 and reduction of short-term borrowing outstanding. DBRS understands that the transaction will not result in any material increase in the level of corporate borrowing at Brookfield.

In assigning the provisional instrument rating, DBRS reiterates that there remains minimal room for further deterioration, as indicated in our most recent commentary on the Company, published on October 19, 2012. DBRS expects that Brookfield’s corporate-level financial metrics for 2012 will reach our targets (funds from operations (FFO) to debt of 30% or higher and FFO interest coverage of 5.0 times) for the ratings and will maintain them at these levels going forward. The ratings could come under pressure if these metrics fall materially short of the targets or if there is a material deterioration or rating downgrade in one or more of the core businesses (including Brookfield Office Properties Inc.).

Notes:
All figures are in Canadian dollars unless otherwise noted.

The applicable methodology is Rating Holding Companies and Their Subsidiaries (September 2012), which can be found on our website under Methodologies.