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Brookfield Infrastructure aims to bolster data portfolio with $2.6-billion Cincinnati Bell deal – Financial Post



Brookfield Infrastructure Partners LP is aiming to add another piece to its growing data-infrastructure portfolio with the proposed acquisition of Ohio-based telco Cincinnati Bell Inc.

It was announced Monday that Brookfield Infrastructure and its institutional partners are buying Cincinnati Bell in a transaction valued at around US$2.6 billion, including debt.

Cincinnati Bell uses its fibre-optic and copper networks to provide high-speed internet, video, voice and data services to customers in parts of Ohio, Kentucky, Indiana and Hawaii.

The company is currently upgrading its network to “next generation” fibre, a press release said, which is needed to support “the growing demand for data” and the emergence of fifth-generation cellular technology known as 5G. To date, half of Cincinnati Bell’s network has been “future-proofed,” the release said.

Acquiring Cincinnati Bell would fit into Brookfield Infrastructure’s existing interests. Chief executive Sam Pollock said in the release that the deal will add “utility-like cash flows,” as well as yet another major investment for the company’s data-infrastructure portfolio.

That portfolio has been particularly active lately, with the play for Cincinnati Bell following a couple of other deals.

Brookfield Infrastructure on Dec. 16 announced it was buying a telecom tower company in India for US$3.7 billion, with the company paying US$375 million of that and the rest coming from its investing partners.

And on Dec. 19, 3i Infrastructure PLC announced it had agreed to sell its 93-per-cent stake in the United Kingdom’s Wireless Infrastructure Group Ltd. to Brookfield Infrastructure, in a sale that valued the stake in WIG at around £387 million ($658 million). WIG builds and operates telecom towers in rural and suburban areas.

CIBC World Markets analyst Robert Catellier said in a note on the Indian telecom tower investment that Brookfield Infrastructure also had experience in the telecom infrastructure business in France and New Zealand.

“It is on strategy in regard to both jurisdiction and asset class, as BIP has been targeting additional data infrastructure investments,” he said. “Data infrastructure and transmission is expected to grow with the roll out of 5G service; the technology requires a significantly higher number of points-of-presence over 4G.”

Brookfield Infrastructure’s data infrastructure segment serves customers in the telecom and media broadcasting sectors, and its aims “are to invest capital to enhance and expand our service offerings while providing safe, reliable and secure access to our properties,” the company said in a third-quarter report.

“If we are able to achieve these objectives,” Brookfield added, “we will be able to attract new customers and maintain low levels of churn on existing customers.”

Approximately 30 per cent of Brookfield Infrastructure is owned by Toronto-based Brookfield Asset Management Inc., which has more than $500 billion in assets under management. Brookfield Infrastructure first went public in 2008, and calls itself “the flagship listed infrastructure company of Brookfield Asset Management.”

Shares of Brookfield Infrastructure rose Monday morning following the Cincinnati Bell announcement, and were up around 1.8 per cent as of 10:30 a.m., trading at $64.82 in Toronto.

Under the terms of the deal announced Monday, each issued and outstanding share of Cincinnati Bell common stock will be converted into the right to receive US$10.50 in cash upon the transaction closing, which is expected to happen by the end of 2020, pending shareholder and regulatory approval.

The US$10.50 cash offer is a 36-per-cent premium to Cincinnati Bell’s closing share price on Dec. 20.

“After thoroughly reviewing a range of strategic alternatives and possible business opportunities for maximizing value, the Board determined this transaction was in the best interest of the company, its shareholders, and its customers,” Cincinnati Bell chair Lynn Wentworth said in the release.

Chief executive Leigh Fox added that “the transaction strengthens our financial position, enabling accelerated investment in our strategic products that is not presently available to Cincinnati Bell as a standalone company.”

Financial Post

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RBC warns house price correction could be deepest in decades | CTV News – CTV News Toronto



A housing correction, which has already led to four consecutive months of price declines in the previously overheated Greater Toronto Area market, could end up becoming “one of the deepest of the past half a century,” a new report from RBC warns.

New data released by the Toronto Regional Real Estate Board (TRREB) last week revealed that the average benchmark price for a home in the GTA fell six per cent month-over-month in July to $1,074,754.

Sales were also down a staggering 47 per cent from July, 2021.

In a report published on Aug. 4, RBC Senior Economist Robert Hogue said recent data from real estate boards underlines that higher interest rates are beginning to take a “huge toll” on the market.

Hogue said that with further hikes to come, prices will likely continue to slide in the coming months.

That prediction, it should be noted, goes against a report from Royal LePage last month which painted a rosier forecast for sellers in which values would more or less holding for the rest of the year following some declines in the second quarter.

“Our expectations for further hikes by the Bank of Canada—another 75 basis points to go in the overnight rate by the fall— will keep chilling the market in the months ahead,” Hogue said. “We expect the downturn to intensify and spread further as buyers take a wait-and-see approach while ascertaining the impact of higher lending rates. Canada’s least affordable markets Vancouver and Toronto, and their surrounding regions, are most at risk in light of their excessively stretched affordability and outsized price gains during the pandemic.”

The Bank of Canada has hiked the overnight lending rate by 225 basis points since March and has warned that further hikes will be necessary given that inflation remains at a near 40-year high.

In his report, Hogue pointed out that the housing correction “now runs far and wide across Canada” but he said that it is particularly pronounced in the costlier markets of Toronto and Vancouver.

In fact, Hogue said that housing resale activity in Toronto is at its slowest pace in 13 years, outside of the early days of the COVID-19 pandemic.

The stockpile of available homes is also up 58 per cent from a year ago, he noted.

“With more options to choose from and higher interest rates shrinking their purchasing budgets, buyers are able to extract meaningful price concessions from sellers,” he said, pointing out that the average price of a home in the GTA is down 13 per cent from March. “We expect buyers to remain on the defensive in the months ahead as they deal with rising interest rates and poor affordability.”

While Hogue did say that condos in the City of Toronto are likely to remain “relatively more resilient” he said that prices elsewhere will continue to fall for the time being, especially in the 905 belt “where property values soared during the pandemic.”

The July data from TRREB suggested that the average price of a home in the GTA was still up one per cent from July, 2021.

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Commuters face GO transit cancellations, possible strike – CityNews



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Canada Revenue Agency plans email blitz to get Canadians to cash outstanding cheques worth $1.4-billion – The Globe and Mail



The Canada Revenue Agency (CRA) is planning a massive e-mail notification campaign to reach Canadians across the country who have uncashed cheques worth a net $1.4-billion.

The e-mail notifications will target recipients of the Canada child benefit and related provincial and territorial programs, as well as recipients of the GST/HST credits and the Alberta Energy Tax Refund.

The CRA said it plans to send approximately 25,000 e-mails in August, another 25,000 in November and a further 25,000 e-mails by May, 2023.

However, even without receiving an e-mail notification, the agency said a taxpayer can check if they have a cheque by logging into My Account, a secure portal on its website to check if they have an uncashed cheque over a period of six months. It added that representatives can also view uncashed cheques of their clients.

Each year, the CRA said it issues millions of payments to Canadian taxpayers in the form of refund benefits. These payments are issued by either direct deposit or by cheque.

“Over time, payments can remain uncashed for various reasons, such as the taxpayer misplacing the cheque or even a change of address which did not allow for delivery,” the agency said in a statement.

The CRA said since the e-mail notification initiative was first launched in February, 2020, about two million uncashed cheques valued at $802-million were redeemed by May 31, 2022.

The average amount per uncashed cheque is $158 with some of them dating as far back as 1998, the agency said.

As of May, 2022, there were an estimated 8.9 million uncashed cheques with the CRA. In May, 2019, about five million Canadians had an estimated 7.6 million uncashed cheques.

“As government cheques never expire or stale date, the CRA cannot void the original cheque and re-issue a new one unless requested by the taxpayer,” the statement read. “These upcoming e-notifications are to encourage taxpayers to cash any cheques they have in their possession.”

The agency said taxpayers can register for the direct deposit option on its website to receive payments directly into their bank accounts.

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