Brookfield Residential Commences a Solicitation of Consents of the Senior Notes Due 2022, 2023 and 2025

HotelierMiddleEast.com |

(GlobeNewswire) - Brookfield Residential Properties Inc. (Brookfield Residential or the Company) today announced that it is commencing a solicitation of consents (the Consent Solicitation) from holders of its outstanding 6.125% Senior Notes due 2022 (the 2022 Notes), 6.125% Senior Notes due 2023 (the 2023 Notes) and 6.375% Senior Notes due 2025 (the 2025 Notes and, together with the 2022 Notes and the 2023 Notes, the Notes) to approve amendments (the Proposed Amendments) to the indentures relating to each series of Notes (the Indentures).

The Proposed Amendments would permit the Company and its subsidiaries to undertake a proposed reorganization transaction (the Reorganization Transaction). Pursuant to the Reorganization Transaction, the Company would contribute the capital stock of its U.S. holding company, Brookfield Residential US Corporation (BRUSC), to a subsidiary of Brookfield Asset Management (BAM), Brookfield U.S. Inc. (BUSI), and receive a minority economic interest in the capital stock of BUSI. BUSI would in turn contribute BRUSC to a new joint venture entity (New LLC) in which BUSI would hold a 90% economic interest and the Company would hold the managing member and a 10% economic interest. BUSI owns BAMs U.S. asset management business (fee-related earnings) and BAMs U.S. direct investments in managed listed entities and private funds.

The proposed reorganization would facilitate operational and administrative synergies by combining all of the direct U.S. investments of its parent, BAM, into one corporate group and further expand its business by including BAMs land banking business as a subsidiary of the Company. As part of the proposed transaction, credit support for BRPIs existing debt will remain similar to the structure today and will be further enhanced by an equity interest in BUSI.

The terms of the Proposed Amendments are summarized in the Consent Solicitation Statement and include:

The Reorganization Transaction and certain related agreements would be permitted;

BRUSC would, upon consummation of the Reorganization Transaction, become a co-issuer of the 2023 Notes and the 2025 Notes (and remain a co-issuer of the 2022 Notes);

The Company would provide to holders consolidating financial information for the Company and its Restricted Subsidiaries together with its quarterly and annual consolidated financial statements, which following the Reorganization Transaction would reflect its investment in BUSI and BUSIs ownership interest in New LLC;

The financial definitions of Consolidated Net Income and Consolidated Tangible Net Worth in the Indentures would exclude the impact of BUSIs economic interest in New LLC; and

Payments made by New LLC to BUSI as dividends or to repurchase capital stock would be subject to the covenant on Restricted Payments in the Indentures, subject to certain exceptions.

The Company is seeking consents to the Proposed Amendments in order to implement the Reorganization Transaction, but the consummation of such Reorganization Transaction is not a condition of the Consent Solicitation.

The Consent Solicitation is scheduled to expire at , New York City time, on , unless extended or earlier terminated (the Expiration Date). Holders of Notes as of , New York City time, on (the Record Date) who validly deliver consents to the Proposed Amendments in the manner described in the Consent Solicitation Statement, dated (the Consent Solicitation Statement) will be eligible to receive a consent payment equal to (1) with respect to the 2022 Notes and the 2025 Notes, $7.50 per $1,000 principal amount of 2022 Notes or 2025 Notes, as applicable, and (2) with respect to the 2023 Notes, C$7.50 per C$1,000 principal amount of the 2023 Notes (the Consent Payment) for which consents have been validly delivered prior to the Expiration Date (and not validly revoked). Holders as of the Record Date providing consents after the Expiration Date will not receive the Consent Payment.

The consummation of the Consent Solicitation and the Companys obligation to make the Consent Payment are subject to a number of conditions that are set forth in the Consent Solicitation Statement, including, without limitation, (i) having received consent from holders representing a majority of the outstanding aggregate principal amount of (1) the 2022 Notes and (2) the 2023 Notes and the 2025 Notes, together as a single class (the Requisite Consents) prior to the Expiration Time, (ii) the execution of an amendment to the Companys existing credit facility to implement the Reorganization Transaction and (iii) the absence of any existing or proposed law or regulation that would, and the absence of any injunction or action or other proceeding (pending or threatened) that (in the case of any action or proceeding, if adversely determined) would, make unlawful or invalid or enjoin or delay the implementation of the Proposed Amendments or the payment of the Consent Payment or that would question the legality or validity thereof.

The consent solicitation will be made solely on the terms and subject to the conditions set forth in the Consent Solicitation Statement, to be provided to the holders of the Notes. The Company may, in its sole discretion, terminate, extend or amend the Consent Solicitation at any time as described in the Consent Solicitation Statement.

The Company has retained J.P. Morgan Securities LLC to act as Solicitation Agent in connection with the Consent Solicitations. Questions about the Consent Solicitations may be directed to J.P. Morgan Securities LLC at (866) 834-4666 (toll free) or (212) 834-4811 (collect). Requests for copies of the Consent Solicitation Statement and related documents, and assistance relating to the procedures for delivering consents, may be obtained by contactingIpreo LLC, the Information Agent, at (212) 849-3880 (banks and brokers) or (888) 593-9546 (toll free).

This press release is not an offer to purchase or sell securities, a solicitation of an offer to purchase or sell securities or a solicitation of consents, and no recommendation is made as to whether or not holders of Notes should consent to the adoption of the Proposed Amendments. The Consent Solicitations are not being made to holders of Notes in any jurisdiction in which the making thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction.

Certain information included or incorporated in this press release or the Consent Solicitation Statement may constitute forward-looking statements and information within the meaning of applicable securities laws. These forward-looking statements reflect the current beliefs of the Companys management and are based on assumptions and information currently available to the management of the Company. In some cases, forward-looking statements can be identified by terminology such as may, will, expect, plan, anticipate, believe, intend, estimate, predict, forecast, outlook, potential, continue, should, likely, project, future or the negative of these terms or other comparable terminology.

You should not place undue reliance on forward-looking statements and information because they involve assumptions, known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements and information.

Brookfield Residential Properties Inc. is a leading land developer and homebuilder in North America. We entitle and develop land to create master-planned communities, build and sell lots to third-party builders, and conduct our own homebuilding operations. We also participate in select, strategic real estate opportunities, including infill projects, mixed-use developments, and joint ventures. We are the flagship North American residential property company of Brookfield Asset Management, a leading global alternative asset manager with approximately $385 billion of assets under management. Further information is available at BrookfieldResidential.com or Brookfield.com or contact:

Investor RelationsTel: 855.234.8362Email: investor.relations@brookfieldrp.com

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

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