Brookfield Asset Management is reportedly looking to secure a $600 million dividend from its portfolio company HomeServe. This payout is part of a proposed $1.8 billion whole-business securitization, an asset-backed financing strategy that HomeServe is currently discussing with lenders. The deal, led by Jefferies, aims to refinance HomeServe's existing debt and fund the dividend for Brookfield, which acquired the UK emergency home-repairs provider in 2023.
This proposed financing highlights how whole-business securitizations offer private equity owners an alternative method to return capital without divesting the underlying company. Under this structure, a company pledges most or all of its assets and their associated cash flows as collateral, potentially accessing financing at a lower cost than traditional debt markets. This method is common for businesses with stable and predictable revenues, such as restaurant chains like Zaxby’s and Subway.
The $1.8 billion financing for HomeServe is expected to involve multiple tranches across both public and private markets. A five-year public tranche is being considered, with pricing discussions around the upper end of 1 percentage point to the lower end of 2 percentage points above the relevant US Treasury benchmark. Additionally, two private tranches are planned: a seven-year tranche potentially priced in the mid-2 percentage-point range over the benchmark, and a 10-year tranche in the upper-2 percentage-point range. The transaction is still in its early stages, and terms could change, with an anticipated completion in September.
