NEW YORK, June 05, 2020 (GLOBE NEWSWIRE) -- Center Coast Brookfield MLP & Energy Infrastructure Fund (NYSE: CEN) (the “Fund”) today announced that its Board of Trustees, based upon the recommendation of Brookfield Public Securities Group LLC (“PSG”), the Fund’s adviser, and its portfolio management team, declared the Fund’s quarterly distribution for June 2020.
|Record Date||Ex-Date||Payable Date||Amount per Share|
|June 2020||June 17, 2020||June 16, 2020||June 25, 2020||$0.0225|
In addition, the Fund announced today that its Board of Trustees has approved a 10-for-1 reverse share split, effective after the market close on July 2, 2020. Trading in the Fund’s common shares on a split-adjusted basis is expected to begin at the market open on July 6, 2020. The Fund’s common shares will continue trading on the New York Stock Exchange (“NYSE”) under its ticker symbol, but will be assigned a new CUSIP number.
June Quarterly Distribution
As noted in prior press releases and on investor calls, the dislocation in the midstream energy space as a result of COVID-19 and the Russia-Saudi Arabia oil price war of 2020 has had an unprecedented impact on the valuation of the Fund’s assets. The Fund’s quarterly distribution for June takes into account many factors, including, but not limited to, the Fund’s current and expected earnings, the overall market environment and PSG’s current economic and market outlook. The June distribution declaration is a further adjustment following the Fund’s announcement on March 12th that it was decreasing its monthly distribution effective April 2020, and the Fund’s subsequent announcement on March 25th that following its April distribution, the Fund was moving to a quarterly distribution. While significant, PSG and the Fund’s Board of Trustees, believe these steps were necessary in light of underlying company-level distribution cuts and the Fund’s recent deleveraging, which caused the size of the Fund to be significantly reduced, including the percentage of the Fund’s portfolio that is invested in liquid, publicly traded, securities. Consequently, as previously announced, the Fund’s private investment in KKR Eagle Co-Invest LP (“KKR”) is now a significant portfolio holding in the Fund.1 In their deliberations, PSG and the Fund’s Board of Trustees considered KKR’s distributions to the Fund in 2018 and 2019, as well as expectations for 2020 distributions. The actions taken have sought to (and future decisions will seek to) balance the Fund’s objective of providing a high level of total return, with an emphasis on distributions to shareholders, with the Fund’s need for cash to comply with applicable asset coverage requirements.
In recent years, the midstream market has undergone several positive changes, and we continue to remain focused on investing in companies run by high-caliber management teams that we believe possess the highest quality assets and most durable operating cash flows. PSG and the Fund’s Board of Trustees believe the June distribution declaration aligns with its current holdings and reflects our underlying companies’ evolved focus on prudent capital allocation. Payment of future distributions is subject to approval by the Fund’s Board of Trustees, as well as the Fund meeting the terms and covenants of any senior securities and the asset coverage requirements of the Investment Company Act of 1940, as amended.
Based on current estimates, it is anticipated that a portion of the distributions paid in calendar 2020 will be treated for U.S. federal income tax purposes as a return of capital. The final determination of the tax status of those 2020 distributions will be made in early 2021 and provided to shareholders on Form 1099-DIV.
Please contact your financial advisor with any questions. Distributions may include net investment income, capital gains and/or return of capital. Any portion of the Fund’s distributions that is a return of capital does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income.” The tax status of distributions will be determined at the end of the taxable year.
1 KKR Eagle Co-Invest LP is a private partnership through which the Fund holds an indirect investment in Veresen Midstream Limited Partnership, a privately owned Canadian natural gas and natural gas liquids (NGL) midstream business. As of March 31, 2020, KKR Eagle Co-Invest LP represented 39.04% of the Fund’s holdings. This information is as of the date indicated and subject to change.
Reverse Share Split
As a result of the reverse share split, every ten (10) of the Fund's outstanding common shares will be converted into one (1) common share. A reverse share split will decrease the Fund’s common shares outstanding and potentially increase the market price per common share by a proportional amount. While the number of outstanding common shares will decline, neither the Fund's portfolio holdings nor the total value of shareholders' investments in the Fund will be affected. After the reverse share split, shareholders' accounts will reflect proportionally fewer common shares with a higher net asset value per common share.
The intent of the reverse share split is to potentially increase the Fund's market price per common share and trading volume, thereby reducing the per share transaction costs associated with buying or selling the Fund's common shares in the secondary market. Each common shareholder will hold the same percentage of the Fund's outstanding common shares immediately following the reverse share split as such shareholder held immediately prior to the reverse share split, subject to adjustments for fractional shares resulting from the reverse share split.
No fractional shares will be issued as a result of the reverse share split, other than in the Fund’s dividend reinvestment plan. Fractional shares that result from the reverse share split will be aggregated and sold on the NYSE by the Fund's transfer agent and the proceeds will be distributed pro rata among shareholders who would otherwise have received fractional shares in the reverse share split. The changes resulting from the reverse share split will be automatically reflected in the Fund’s records and no action will need to be taken by shareholders.
Please contact American Stock Transfer & Trust Company, the Fund’s transfer agent and exchange agent for the reverse share split, for further information toll-free at (866) 668-6549.
Certain statements made in this news release that are not historical facts are referred to as "forward-looking statements" under the U.S. federal securities laws. Actual future results or occurrences may differ significantly from those anticipated in any forward-looking statements due to numerous factors. Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "project," "will" and similar expressions identify forward-looking statements, which generally are not historical in nature. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ from the historical experience of Brookfield Public Securities Group LLC (“PSG”) and the Fund managed by PSG and its present expectations or projections. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. PSG and the Fund managed by PSG undertake no responsibility to update publicly or revise any forward-looking statements.
PSG is an SEC-registered investment adviser that represents the Public Securities platform of Brookfield Asset Management Inc., providing global listed real assets strategies including real estate equities, infrastructure equities, energy infrastructure equities, multi-strategy real asset solutions and real asset debt. With over $14 billion of assets under management as of March 31, 2020, PSG manages separate accounts, registered funds and opportunistic strategies for financial institutions, public and private pension plans, insurance companies, endowments and foundations, sovereign wealth funds and individual investors. PSG is a wholly owned subsidiary of Brookfield Asset Management Inc., a leading global alternative asset manager with over $515 billion of assets under management as of March 31, 2020. For more information, go to www.brookfield.com.
Center Coast Brookfield MLP & Energy Infrastructure Fund is managed by PSG. The Fund uses its website as a channel of distribution of material information about the Fund. Financial and other material information regarding the Fund is routinely posted on and accessible at www.brookfield.com.
Center Coast Brookfield MLP & Energy Infrastructure Fund
Investing involves risk; principal loss is possible. Past performance is not a guarantee of future results.
An outbreak of infectious respiratory illness caused by a novel coronavirus known as “COVID-19” was first detected in China in December 2019 and has now been detected globally. COVID-19 and concern about its spread contributed to severe market volatility. Markets generally and the energy sector specifically, including master limited partnerships (“MLPs”) and energy infrastructure companies in which the Fund invests, have also been adversely impacted by reduced demand for oil and other energy commodities as a result of the slowdown in economic activity resulting from the spread of COVID-19 and by price competition among key oil-producing countries. These developments have and may continue to adversely impact the Fund’s net asset value and the market price of the Fund's common shares.
The Fund’s investments are concentrated in the energy infrastructure industry with an emphasis on securities issued by MLPs, which may increase price fluctuation. The value of commodity-linked investments such as the MLPs and energy infrastructure companies (including midstream MLPs and energy infrastructure companies) in which the Fund invests are subject to risks specific to the industry they serve, such as fluctuations in commodity prices, reduced volumes of available natural gas or other energy commodities, slowdowns in new construction and acquisitions, a sustained reduced demand for crude oil, natural gas and refined petroleum products, depletion of the natural gas reserves or other commodities, changes in the macroeconomic or regulatory environment, environmental hazards, rising interest rates and threats of attack by terrorists on energy assets, each of which could affect the Fund’s profitability.
MLPs are subject to significant regulation and may be adversely affected by changes in the regulatory environment including the risk that an MLP could lose its tax status as a partnership. If an MLP was obligated to pay federal income tax on its income at the corporate tax rate, the amount of cash available for distribution would be reduced and such distributions received by the Fund would be taxed under federal income tax laws applicable to corporate dividends received (as dividend income, return of capital, or capital gain).
In addition, investing in MLPs involves additional risks as compared to the risks of investing in common stock, including risks related to cash flow, dilution and voting rights. Such companies may trade less frequently than larger companies due to their smaller capitalizations which may result in erratic price movement or difficulty in buying or selling.
The Fund is a non-diversified, closed-end management investment company. As a result, the Fund’s returns may fluctuate to a greater extent than those of a diversified investment company. Shares of closed-end management investment companies, such as the Fund, frequently trade at a discount to their net asset value, which may increase investors’ risk of loss. The Fund is not a complete investment program and you may lose money investing in the Fund.
Because of the Fund’s concentration in MLP investments, the Fund is not eligible to be treated as a “regulated investment company” under the Internal Revenue Code of 1986, as amended. Instead, the Fund will be treated as a regular corporation, or “C” corporation, for U.S. federal income tax purposes and, as a result, unlike most investment companies, will be subject to corporate income tax to the extent the Fund recognizes taxable income.
An investment in MLP units involves risks that differ from a similar investment in equity securities, such as common stock, of a corporation. Holders of MLP units have the rights typically afforded to limited partners in a limited partnership. As compared to common shareholders of a corporation, holders of MLP units have more limited control and limited rights to vote on matters affecting the partnership. There are certain tax risks associated with an investment in MLP units. Additionally, conflicts of interest may exist between common unit holders, subordinated unit holders and the general partner of an MLP.
The Fund currently seeks to enhance the level of its current distributions by utilizing financial leverage through borrowing, including loans from financial institutions, or the issuance of commercial paper or other forms of debt, through the issuance of senior securities such as preferred shares, through reverse repurchase agreements, dollar rolls or similar transactions or through a combination of the foregoing. Financial leverage is a speculative technique and investors should note that there are special risks and costs associated with financial leverage.
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