NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed the following ratings on Brookfield Asset Management (NYSE and TSX: BAM) as follows:

--Issuer Default Rating (IDR) 'BBB+';

--Unsecured lines of credit 'BBB+';

--Senior unsecured notes 'BBB+';

The Rating Outlook is Stable.

The ratings are supported by solid cash flow generated from BAM's investments in a diversified business portfolio as well as cash flows from its growing asset management franchise. Fitch notes that BAM is continuing to make new investments in several sectors, including commercial and residential real estate, renewable power generation, timber, transmission, and other infrastructure businesses. Fitch also notes that BAM actively acquires and divests investments and businesses and the composition of its portfolio has shifted over time. BAM's assets under management have 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.

BAM's portfolio of investments have generated strong and increasing levels of free cash flow that have enabled BAM to comfortably service its corporate obligations. As the size of BAM's portfolio continues to grow globally, Fitch believes that the risk that a significant downturn in a specific region or industry will jeopardize a material portion of BAM's cash flows declines further.

Currently, the largest contributors to BAM's operating cash flows include its 100% stake in Brookfield Renewable Power (IDR 'BBB-'), controlling stakes in Brookfield Properties and Brookfield Homes, income received from a number of equity investments in global real estate and infrastructure, and investment income from real estate finance, insurance, and restructuring operations. BAM has also materially increased the amount of fee income it derives from managing assets on behalf of others.

The company reported that its activities generated $1.91 billion of net cash flow in 2007, up from $1.80 billion in 2006 and $908 million in 2005. 2007 net cash flow included $366 million from asset management fees, up from $237 million in 2006. While portions of total net cash flow consist of one-time gains from monetizations and other special distributions that are a regular part of BAM's investment activities, Fitch is comfortable that BAM has access to at least $950 million of sustainable annual cash flow based on investments held at June 30, 2008.

Fitch believes that current cash flows are ample to service its corporate obligations, which included $1.87 billion of term debt held directly or guaranteed by the company, $526 million of commercial paper and bank borrowings, and $648 million of convertible preferred securities at June 30, 2008. Additionally, BAM has the ability to monetize many of its investments as necessary to fund obligations.

BAM maintains a strong liquidity position and financial flexibility with access to a wide variety of global capital sources. At June 30, 2008, BAM had $568 million in cash on hand and approximately $850 million in unused capacity through committed, unsecured credit facilities. Additionally, BAM maintains a sizable pool of marketable securities that could be liquidated in a relatively short period of time.

BAM's corporate debt maturity schedule is reasonable, with annual maturities at the corporate level representing below $350 million of outstanding debt, and minimal exposure to variable rate debt.

Fitch notes that non-recourse, project-level financing is generally used on assets within the businesses that the company invests in, minimizing the concern that BAM cash flows would be needed to fund interest payments on any debt associated with poorly performing assets. Accordingly, Fitch's rating concerns include the significant level of subordination inherent in many of BAM's interests, the limitations that come from owning less than 100% of many of its investments, and the overall levels of leverage at the business units that contribute a significant portion of BAM's cash flows.

Based in Toronto, Ontario, Brookfield Asset Management is an asset management company that specializes in global investments in real estate, renewable power generation, and infrastructure assets. As of June 30, 2008, the company had over $95 billion of assets under management.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.

Fitch Ratings, New York
Janice Svec, 212-908-0304
Glen Grabelsky, 212-908-0577
or
Media Relations:
Sandro Scenga, 212-908-0278