Fitch: No Rtgs Impact on Brookfield Asset Management or Brookfield Renewable Power On Restructuring

Brookfield Asset Management (NYSE/TSX/Euronext: BAM; 'BBB' IDR) announced Tuesday, Sept. 13, that it plans to combine the Brookfield Renewable Power Fund (TSX:BRC.UN) and the power generating assets owned by BAM's wholly owned subsidiary, Brookfield Renewable Power, Inc. (BRPI; 'BBB-' IDR) to create Brookfield Renewable Energy Partners, L.P. (BREP), a global, publicly traded partnership focused on renewable power generation.

Under the proposed transaction, BAM will retain a 73% interest in BREP on a fully-exchanged basis through its subsidiary BRPI, and a wholly owned BAM subsidiary will be the general partner of the partnership. After the closing of the transaction, BREP is expected to be one of the world's largest renewable energy platforms.

BAM's global portfolio of assets under management has grown materially in recent years, as the businesses that the company controls have added scale, and the company has actively sought partners for the bulk of its investments. Additionally, BAM actively acquires and divests investments, shifting the composition of its portfolio over time. In recent years, BAM has sought to add liquidity for certain investments through listed securities, while teaming up with other investors to fund growth to reduce capital commitments at the BAM level.

Although BRPI is currently one of the few major entities that is wholly owned by BAM and is one of the larger contributors of BAM's reported operating cash flow, BAM's portfolio is large and the dividends received from BRPI currently represent a small portion of BAM's annual operating cash flows.

BAM will have some spot market exposure through BRPI's marketing subsidiary which holds power contracts with BREP, at above current market prices. If power prices continue to remain at cyclical lows for an extended period, BRPI will have some losses associated with these contracts but the amounts are not material to BAM.

BAM's ratings continue to be supported by solid cash flow generation from a large, well-diversified portfolio of investments, a solid liquidity position, a management team with a strong track record, demonstrated access to a wide variety of capital sources, solid debt service coverage ratios, reasonable leverage, and a manageable debt maturity schedule.

Credit concerns include a relatively complex ownership structure of investments, elevated leverage at a number of BAM's larger investments, and a propensity for entering into related-party transactions.

Fitch expects to withdraw BRPI's ratings upon consummation of the transaction as its debt will be assumed by BREP.

For additional information, please refer to the April 5, 2011 full rating report 'Brookfield Asset Management, Inc.,' which is available at www.fitchratings.com.

Based in Toronto, Ontario, Brookfield Asset Management is an asset management company that specializes in global investments in commercial and residential real estate, renewable power generation, and infrastructure assets. The company has approximately $150 billion of assets under management.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:

--'Corporate Rating Methodology', Aug. 12, 2011;
--'Investment Manager and Alternative Funds Criteria', Dec. 23, 2010.

Applicable Criteria and Related Research:
Corporate Rating Methodology
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=647229
Investment Manager and Alternative Funds Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=590125

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