Brookfield Asset Management is looking to extract a $600m dividend from HomeServe through a proposed $1.8bn whole-business securitisation, as the private markets investor explores another way to generate liquidity from its portfolio, according to a report by Bloomberg.
The UK emergency home-repairs provider is in preliminary discussions with lenders over the asset-backed financing, according to people familiar with the transaction. Jefferies is leading the proposed deal, which would be used both to refinance existing HomeServe debt and fund the dividend to Brookfield.
Brookfield acquired HomeServe in 2023 as part of its expansion into businesses with recurring and relatively predictable cash flows.
The proposed financing illustrates how whole-business securitisations can provide private equity owners with an alternative route to returning capital without selling an underlying portfolio company.
Under the structure, a company typically pledges most or all of its assets and associated cash flows as collateral, potentially allowing it to access financing at a lower cost than through conventional debt markets.
The structure has become an established, albeit specialised, source of funding for businesses with resilient and predictable revenues. Previous issuers have included restaurant operators such as Zaxby’s and Subway, which have used similar transactions to raise structured debt.
HomeServe’s proposed $1.8bn financing is expected to comprise several tranches across both public and private markets.
The company is considering a five-year tranche that could be publicly traded, with pricing currently being discussed at around the upper end of 1 percentage point to the lower end of 2 percentage points above the relevant US Treasury benchmark.
Two additional tranches are expected to target private structured-finance investors. A seven-year portion is being discussed at spreads in the mid-2 percentage-point range over the benchmark, while a 10-year tranche could price at a spread in the upper-2 percentage-point range.
The transaction remains at an early stage and terms could change before any financing is completed.
Brookfield and Jefferies reportedly declined to comment, while HomeServe reportedly did not respond to requests for comment.
