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NEW YORK, NY— March 12, 2020 — 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, decreased the monthly distribution of the Fund, effective April 2020. As discussed more fully below, the change in the distribution for the Fund 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 Fund declared a decrease to its monthly distribution from $0.1042 per share to $0.03 per share, payable on April 23, 2020 to stockholders of record on April 15, 2020. The ex-distribution date is April 14, 2020. Based on the NYSE closing price of $2.36 on March 11, 2020, the Fund’s annualized distribution rate was approximately 52.98%. The previously declared monthly distribution for March will not change.
|Month||Record Date||Ex Date||Payable Date||Amount per Share|
|March 2020||March 18, 2020||March 17, 2020||March 26, 2020||$0.1042|
|April 2020||April 15, 2020||April 14, 2020||April 23, 2020||$0.03|
As background, the Fund’s current distribution level was established near the peak of the midstream market in 2013, when companies’ distributions were at all-time highs. Since then, the midstream universe has undergone several positive changes, including streamlined corporate structures, reduced reliance on external funding, lower leverage, and an increased focus on capital discipline. These changes, while positive for the midstream industry, have resulted in reduced distribution levels. However, the Fund was still able to maintain its distribution level for the last seven years. Although it had appeared these levels were stable and defensible, current market volatility and the associated fallout in energy markets from the recent OPEC decision have put capital allocation decisions back in focus. Therefore, we feel this change is necessary, ensuring the Fund’s distribution policy aligns with the industry and reflects our underlying companies’ evolved focus on prudent capital allocation.
As discussed above, the midstream market has undergone several positive changes, and we believe the industry is better positioned to capitalize on the substantial, multi-decade investment opportunity required in the North American energy industry. Our investment process has not changed, and we 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.
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.
As previously announced, PSG will host a special update call for the Fund on Friday, March 13, 2020 at 11am ET. We will provide an update on general market conditions, the Fund’s positioning and monthly distribution rate, and PSG’s view on the market opportunity in the energy infrastructure sector.
There will be an opportunity to ask questions about the Fund during the call. Questions may also be submitted ahead of the call by sending an e-mail to email@example.com.
Toll Free Dial-In Number: (866) 521-4909
International Dial-In Number: (647) 427-2311
Conference ID: 5299584
A transcript of the call will be available by calling 855-777-8001 or emailing firstname.lastname@example.org.
Brookfield Public Securities Group LLC (“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 approximately $20 billion of assets under management as of December 31, 2019, 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 $540 billion of assets under management as of December 31, 2019. For more information, go to www.brookfield.com.
Center Coast Brookfield MLP & Energy Infrastructure Fund is managed by Brookfield Public Securities Group LLC. 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
250 Vesey Street, 15th Floor
New York, NY 10281-1023
Investing involves risk; principal loss is possible. Past performance is not a guarantee of future results.
The Fund’s investments are concentrated in the energy infrastructure industry with an emphasis on securities issued by master limited partnerships (“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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