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Discussion Starter #1
Can anyone provide insight into what this means? Issuing corporate shares from the trust? Does this mean more favourable tax treatment? How is the BIP.Un income taxed and how will it be taxed going forward? Income vs dividends?

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BROOKFIELD, NEWS, Sept. 25, 2019 (GLOBE NEWSWIRE) -- Brookfield Infrastructure Partners L.P. (“Brookfield Infrastructure” or “BIP”) (NYSE: BIP; TSX: BIP.UN) today announced the intention to create a Canadian corporation in order to provide investors with greater flexibility in how they access BIP’s globally diversified portfolio of high-quality infrastructure assets.

Brookfield Infrastructure’s Board of Directors intends to distribute to existing unitholders, on a tax-free basis, class A shares of the new corporation, Brookfield Infrastructure Corporation (“BIPC”). From an economic and accounting perspective, the transaction will be analogous to a unit split as it will not result in any underlying change to aggregate cash flows or net asset value except for the adjustment for the number of units/shares outstanding.

The class A shares will be structured with the intention of being economically equivalent to units of BIP, including identical distributions. The class A shares are intended to allow investors the ability to own the equivalent economic exposure to BIP, including identical distributions, through a traditional corporate structure.

Currently, unitholders are expected to receive 0.11 BIPC shares for each unit held of Brookfield Infrastructure (i.e., one BIPC class A share for every nine Brookfield Infrastructure units held) in the form of a special distribution.

The benefits of the creation of BIPC will be:

Potential enhanced demand from U.S. retail investors due to more favorable tax attributes,
Potential increased demand from institutional investors who are currently unable, or prefer not to, own partnership units, and
The ability to qualify for further index inclusion, which is not available today.
“The effective stock split and creation of BIPC will provide increased opportunities for investors to access our globally diversified portfolio of high-quality infrastructure assets,” said Sam Pollock, Chief Executive Officer of Brookfield Infrastructure. “We expect BIPC, as a corporation, will be eligible for inclusion in several indices and offer a tax reporting framework that will appeal to investors in certain jurisdictions. This positions us well to attract new investors to our leading infrastructure business.”

Similar to exchangeable shares issued in cross-border mergers, the class A shares of BIPC will be structured with the intention of providing an economic return equivalent to BIP units. Each BIPC share will have the same distribution as a BIP unit and will be exchangeable, at the shareholder's option, for one BIP unit.

Following completion of the special distribution, the aggregate quarterly distributions and dividends from Brookfield Infrastructure and BIPC will correspond to the quarterly distributions made on Brookfield Infrastructure units as if the special distribution did not take place.

RBC Capital Markets acted as financial advisors and Torys LLP as legal advisors to Brookfield Infrastructure for this transaction.

Holders of Brookfield Infrastructure’s preferred limited partnership units will not receive the class A shares.

The majority of the BIPC class A shares will be held by the holders of Brookfield Infrastructure’s units immediately after the effective split. Brookfield Infrastructure will own all the BIPC class B and C shares. The class A and class B shares will control 25% and 75%, respectively, of the aggregate voting rights of the shares of BIPC. BAM, as a unitholder of Brookfield Infrastructure, is expected to hold approximately 29.6% of the BIPC class A shares, which is equivalent to its effective ownership of Brookfield Infrastructure units. BIPC intends to apply to list its class A shares in the United States on the NYSE and in Canada on the TSX. Subject to the receipt of normal course regulatory approvals, Brookfield Infrastructure anticipates completing the special distribution in the first half of 2020.

In connection with this transaction, a registration statement (including a prospectus) has been filed with the U.S. Securities and Exchange Commission (the “SEC”) and a preliminary prospectus will be filed with the Canadian securities regulatory authorities. You should read the prospectus and other documents that have and will be filed with the SEC for more complete information about the transaction. You may get these documents for free by visiting EDGAR on the SEC web site at www.sec.gov. Alternatively, a copy of the prospectus can be sent to you at no cost, upon request, using the contact information below.
 

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Stock split of a new class of shares.
So you'll end up with an odd number of weird shares that are subtly different.
The big difference is that they might be worth more to certain people, so they'll pay more for the same share of the company, which is actually good for everyone.
 

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I recall owning BIP.UN at one time. Not sure, but isn't that a limited partnership? I recall having to fill out complex tax slips for fractions of shares in the partnership. I got rid of it to simplify my life at tax time. If the new Canadian corporation pays equivalent distributions as dividends, that would be good. But I have not looked at the details.
 

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What happened to BIP.UN?

I hold a position in BIP.UN and wonder what happened in March.

Just before Armageddon the price of BIP.UN was around $71.50; it paid a quarterly dividend of $0.5375 on Feb27, the price wobbled insignificantly, it was $71.50 on March 4. Then this strange thing happened just in the middle of the Armageddon, March 23. I will compare it with the price of RY.

Date________BIP.UN_____________RY_____ BIPC

March20_____$47.10_60%__of_$78.50

March23_____$38.98____________$72.25

March24_____$47.00____________$81.75

Apr7_________$54.20_63%__of_$85.67_______$53.62

What happened on March 23, besides the Armageddon, was the return of 11% of the capital in the form of stock of a new company BIPC (1 share BIPC per 9 shares of BIP.UN), exchangeable 1:1 to BIP.UN. I do not even ask why they are doing it, they always do these strange splits. Maybe somebody understands? But it looks to me like they created an 11% value out of thin air. Or is there something I am missing that gonna bite me at the tax time?
 

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Discussion Starter #5 (Edited)
I hold this in my non-reg account. How do I account for the ACB on BIPC? TDDI is reporting my cost as $34.55. And how does it change the ACB of the BIP I hold?

TDDI is reporting it as a ROC On BIP for $1900

I use adjustedcostbase.com.

I have 500 shares of BIP and received 55 shares of BIPC.
 

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I hold this in my non-reg account. How do I account for the ACB on BIPC? TDDI is reporting my cost as $34.55. And how does it change the ACB of the BIP I hold?

TDDI is reporting it as a ROC On BIP for $1900

I use adjustedcostbase.com.

I have 500 shares of BIP and received 55 shares of BIPC.
My TDDI reported cost of BIPC is C$48.68 which is probably equivalent to U$34.55. This would be the ACB of my BIPC, I guess. I would also think that you have to decrease the ACB of BIP by U$1900/500=U$3.80 or C$5.40.
 

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Thanks for the link. I am curious to see the impact on both offerings down the road. If one were to establish a new position today (much discussion about what to do as a current shareholder) there is lots to consider. I am curious as to monitor correlation between the two tickers. One clearly had more shares/units upon the split. What will happen over time to that number? I would guess that the correlation in price would be similar to that of various class offerings of shares. thoughts?
 

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Discussion Starter #9
The tax reporting and efficiency of the new entity BIPC seem more favourable. I’m going to convert my BIP.UN at some point. Hoping Brookfield will allow for the exchange so I can avoid commissions. (They are allowing for a commission-free exchange of BIPC to BIP.UN). Or I may take advantage of a downturn in BIP.UN and claim some losses.
 

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Discussion Starter #10
Learning how to use charts.....does this seem correct? Has BIPC been outperforming BIP.UN this much? And BIPC has preferential tax treatment?

im looking to convert my holdings, but Brookfield hasn’t announced any plans to allow conversions to C from UN yet.......although they have a process for C to UN.


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