Babcock & Brown has decided to float its wind energy fund, beginning the process with an initial public offer (IPO) of stapled securities in Babcock & Brown Wind Partners (BBWP).

The IPO will consist of a foundation offer, a broker firm offer, and an institutional offer and is expected to raise $361 million. However BBWP will accept oversubscriptions to allow it to raise an additional $35 million.

Under the IPO, each stapled security is made up of one ordinary share in Babcock & Brown Wind Partners Limited, one ordinary share in Babcock & Brown Wind Partners (Bermuda) Limited, and one unit in Babcock & Brown Partners Trust. The combination of these three entities will form BBWP.

Babcock & Brown will possess a 15 per cent stake in BBWP while Babcock & Brown Infrastructure will own 17.5 per cent of the fund. Based on an issue price of $1.40, BBWP is expected to list with a market capitalisation to be between $657 million and $692 million.

Upon completion of the IPO, BBWP will be invested in 15 wind farms situated across the USA, Europe and Australia.

The fund is forecast to produce a fully tax deferred yield of 7.25 per cent per annum in 2006 and 8 per cent per annum in 2007.

The IPO is expected to open on October 4, 2005.