RE: Triton Intl Ltd (TRT-D)
I have a small position I bought 8/21/2020 for $23.80/share.
It might be a good investment for a taxable account because these are "qualified dividends" taxed at a max rate of 20%
Yield: The current yield is calculated by dividing the annual dividend by the current market price. Since the stock is trading below its $25 par value, the yield to the investor is higher than the stated dividend rate of 6.875%. The information you provided states a yield of 7.14%. At a price of approximately $24.07, the stock's current yield would be 7.14%, which is indeed below its $25 par value
Taxation: The dividends from this preferred stock are considered qualified dividends, which means they are taxed at a lower rate for U.S. federal income tax purposes for individual investors.
TRTN-D (Triton International 6.875% Series D Cumulative Redeemable Perpetual Preference Shares) is a preferred stock that remained outstanding and continues to trade on the NYSE after Triton International was acquired by Brookfield Infrastructure Partners in September 2023. The common shares (TRTN) were delisted, but the preferred shares were not part of the common stock merger consideration.
Terms of the Acquisition
- Acquisition Date and Price: The definitive agreement for the acquisition was announced on April 12, 2023. The transaction officially closed on September 28, 2023. The deal valued Triton's common equity at approximately $4.7 billion. The total enterprise value, which includes assumed debt, was approximately $13.3 billion.
- Consideration for Shareholders: Triton common shareholders received a consideration valued at $85 per share, which was a significant 35% premium to Triton's closing share price on the day before the announcement. The payment was a combination of cash and stock:
- $68.50 in cash per share.
- $16.50 in Class A shares of Brookfield Infrastructure Corporation (BIPC). The number of BIPC shares received was subject to a collar, which meant the value remained fixed at $16.50 as long as BIPC's share price stayed within a certain range.
- Status of Preferred Shares: As noted in the initial query, the preferred shares of Triton (including TRTN-D) were explicitly not part of the merger consideration. They remained outstanding and continue to trade, now as obligations of a privately-held subsidiary of Brookfield Infrastructure.
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For Brookfield, the benefits of the acquisition include gaining ownership of Triton's highly contracted and stable cash flows, an investment-grade capital structure, and a leading position in the essential transportation and logistics sector. For Triton's debt holders and preferred shareholders, the key benefit is that their existing obligations were maintained and assumed by a larger, well-capitalized owner—Brookfield—which provides greater financial stability and a deeper pool of long-term capital to support the business. The acquisition was a "take-private" transaction; Brookfield is now the owner of the common equity.
Benefits for Different Stakeholders
- Brookfield Infrastructure Shareholders: Brookfield benefits from the high "going-in cash yield" provided by Triton's business. Triton's fleet of containers is a long-life, high-quality asset that generates stable and predictable cash flows. The acquisition provides Brookfield with downside protection and a platform for growth in a critical industry. The deal also allowed Brookfield to use a mix of cash and its own BIPC shares, broadening its investor base.
- TRTN Common Shareholders: The common shareholders benefited from a significant premium—35% to the prior day's closing price—which offered a lucrative exit from their investment. They had the option to receive a mix of cash and stock, providing liquidity and the opportunity to remain invested in a diversified portfolio of infrastructure assets through Brookfield.
- TRTN Debt Holders & Preferred Shareholders: For these stakeholders, the transaction was largely a positive development. Their positions were not part of the merger consideration and remained outstanding as obligations of Triton. They now have a claim on the assets of a company that is supported by a large, global, and highly-regarded asset manager. Brookfield explicitly stated its intention to maintain Triton's existing investment-grade capital structure, which further reassures bondholders and preferred shareholders of the company's financial health and ability to meet its obligations.
Operations, Governance, and Management
- Who Operates Triton? Triton International continues to operate as a stand-alone business under the Triton name. It maintains its global presence, and its day-to-day operations are handled by the company's existing management team. Triton now functions as a privately held subsidiary of Brookfield Infrastructure Partners.
- Board of Directors and Management Reporting: Following the acquisition, the board of directors of Triton was reconstituted. Brookfield, as the owner, now controls the board, which would include one or more of its representatives. Triton's management team, led by CEO Brian Sondey, now reports to the new board and to Brookfield. As is common in such acquisitions, the operational management is often kept in place to ensure a smooth transition and continuity of business.
- Senior Management Changes: The acquisition agreement and initial press releases indicated that Triton would continue to be led by its existing executive leadership team, including CEO Brian Sondey. While the core management team has largely remained in place to ensure continuity, there have been some planned transitions. For example, in late 2024, Triton announced that John O'Callaghan, Executive Vice President, would retire from his role but remain with the company in a different capacity. There is no public information to suggest that any senior management has taken positions directly at Brookfield. The structure is one where Triton operates independently under its existing management, with Brookfield providing strategic oversight and financial backing
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