SCHEDULE: Brookfield Entities Execute $400M Share Financing Deal

Brookfield Corporation subsidiaries transferred 24.3 million BBUC exchangeable shares to Brookfield Wealth Solutions entities for $400 million in a financing arrangement.

Summary

• Wholly-owned subsidiaries of Brookfield Corporation (BN Parties) entered into financing arrangements with wholly-owned subsidiaries of Brookfield Wealth Solutions Ltd. (BNT Parties) on September 26, 2025, and September 29, 2025.
• BN Parties transferred an aggregate of 24,289,723 BBUC exchangeable shares (Subject Securities) to BNT Parties.
• In exchange for the Subject Securities, BNT Parties made an aggregate cash payment of $400,000,000 (Transfer Value) to BN Parties.
• BN Parties are obligated to repurchase the Subject Securities on June 22, 2026, and June 25, 2026, or earlier if the arrangements are terminated.
• The repurchase price will be the Transfer Value plus a return calculated at a rate of SOFR+1.40% per annum.
• BN Parties retain the right to direct all voting decisions for the Subject Securities while held by BNT Parties, unless an event of default occurs.
• Brookfield Corporation and BAM Partners Trust beneficially own 142,552,877 units, representing 67.8% of the class, assuming all outstanding redemption-exchange units (REUs) and BBUC exchangeable shares are exchanged for Limited Partnership Units on a one-for-one basis.
• The percentage ownership is based on an aggregate of approximately 88,675,926 Limited Partnership Units of Brookfield Business Partners L.P. outstanding as of September 26, 2025.

Sentiment

Score: 6

Explanation: The transaction provides $400 million in liquidity to Brookfield Corporation subsidiaries, which is generally positive for capital management. However, it also incurs a financing cost (SOFR+1.40%) and a future repurchase obligation. The retention of voting rights is a positive aspect, indicating continued control over the underlying assets.

Positives

• Brookfield Corporation subsidiaries secured $400,000,000 in cash, enhancing liquidity through an internal financing arrangement.
• BN Parties retain voting control over the transferred BBUC exchangeable shares, maintaining strategic influence over the underlying assets.

Negatives

• Brookfield Corporation subsidiaries incur a future obligation to repurchase the shares, along with a financing cost calculated at SOFR+1.40% per annum.

Risks

• Potential for an event of default under the financing arrangements, which could result in BN Parties losing voting control over the Subject Securities.
• Exposure to interest rate risk, as an increase in the SOFR benchmark rate would increase the cost of the repurchase obligation.

Future Outlook

Brookfield Corporation subsidiaries are obligated to repurchase the transferred BBUC exchangeable shares on June 22, 2026, and June 25, 2026, at a price equal to the original transfer value plus a return of SOFR+1.40% per annum. The financing arrangements may also be terminated earlier in accordance with their terms.

Industry Context

This filing details an internal financing transaction between Brookfield entities, reflecting Brookfield's strategy of managing capital and ownership stakes within its complex corporate structure. It likely aims to optimize liquidity or capital allocation across its various partnerships and corporations, rather than signaling a direct response to broader industry trends or competitive pressures.

Comparison to Industry Standards

• This transaction is an internal financing arrangement between related Brookfield entities, making direct comparisons to external industry-standard financing benchmarks or competitor transactions challenging without more context on Brookfield's overall capital structure and financing strategy.
• The SOFR+1.40% rate is a market-based floating rate, common in corporate financing. Its competitiveness would depend on the specific credit profile of the BN Parties and the nature of the collateral (the BBUC exchangeable shares) within the context of an inter-company loan.

Related Party Transactions

• Wholly-owned subsidiaries of Brookfield Corporation (BN Parties) entered into financing arrangements with wholly-owned subsidiaries of Brookfield Wealth Solutions Ltd. (BNT Parties).
• BN Parties transferred 24,289,723 BBUC exchangeable shares to BNT Parties for $400,000,000.
• BN Parties are obligated to repurchase these shares from BNT Parties at a price including a return of SOFR+1.40% per annum.

Stakeholder Impact

• Shareholders (Brookfield Business Partners L.P.): The transaction involves BBUC exchangeable shares, which can be exchanged for Units. The beneficial ownership percentages of the reporting persons remain high, indicating stable control. The financing arrangement itself is internal and may not directly impact the operational performance or dividend policy of Brookfield Business Partners L.P. in the short term, but it reflects capital management within the broader Brookfield ecosystem.
• Shareholders (Brookfield Corporation/Brookfield Wealth Solutions Ltd.): The transaction provides liquidity to BN Parties and a return for BNT Parties, potentially optimizing capital allocation and financial flexibility within the Brookfield group.

Next Steps

• BN Parties are obligated to repurchase the Subject Securities on June 22, 2026, and June 25, 2026.
• The financing arrangements may be terminated earlier in accordance with their terms.

Key Dates

Recommendation

This filing details an internal financing transaction between Brookfield entities, where Brookfield Corporation subsidiaries secured $400 million in cash by transferring BBUC exchangeable shares to Brookfield Wealth Solutions Ltd. subsidiaries, with an obligation to repurchase them at SOFR+1.40%. While it provides liquidity to one part of the Brookfield structure, it also creates a financing cost and future obligation. The transaction does not fundamentally alter the operational outlook or strategic direction of Brookfield Business Partners L.P. and is primarily a capital management exercise within the broader Brookfield group. Given the internal nature and lack of new material operational or strategic information, a 'hold' recommendation is appropriate, as existing investment theses are unlikely to be significantly impacted by this specific filing.

Keywords

Brookfield Business Partners, Brookfield Corporation, SEC Filing, Schedule 13D, Financing Arrangement, BBUC Exchangeable Shares, Related Party Transaction, Beneficial Ownership, SOFR