Brookfield Infrastructure: Double-Digit Discount And Attractive Spreads With The Preferreds

2025-11-25 09:38:23 ET

Brookfield Infrastructure ( BIP ) ( BIPC ) fixed-income securities have sold off since mid-September to extend pre-existing discounts to their liquidation values and enlarge spreads to long-term U.S. Treasury rates that were already elevated. I owned the 5.0% Subordinated Notes ( BIPH ) since the start of the year, with these trading down from their near-term September peak, tracking the broader market for fixed-income securities lower. There is a need for a broader comparison across all of BIP's outstanding fixed-income securities as the Fed meanders on whether or not to cut by another 25 basis points at the upcoming December rate-setting meeting. While this seemed locked in a few weeks ago, the CME FedWatch Tool currently has the probability of another cut at 67% . The long-term investment case for fixed-income hinges on a normalization of inflation, and rates coming down much more than expectations of a 3.50% to 3.75% neutral Fed funds rate. ...

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