Wednesday, January 21, 2009

$32-billion Canadian ABCP restructuring implemented

(Canadian Press) The 17-month agony of the Canadian non-bank asset-backed commercial paper market is over, with the implementation of a court-administered restructuring of $32 billion worth of notes.

The Pan-Canadian Investors Committee organizing the restructuring said Wednesday that holders of the seized-up ABCP can expect their new notes within three business days.

Under the arrangement, the non-bank asset-backed commercial paper - short-term notes containing packages of debt, which until credit markets began freezing in August 2007 rolled over regularly as they matured - will be exchanged for longer-term notes reflecting the maturities of the underlying assets.

For small investors holding less than $1 million worth of ABCP, dealers who sold the notes have undertaken to provide full refunds immediately.

A key - and controversial - aspect of the restructuring agreement is that all sides relinquish the right to sue over losses caused by the tangle.

"We are delighted to announce the successful completion after nearly a year and a half of arduous negotiations, legal challenges and compromise during ever changing credit market conditions," stated Purdy Crawford, chair of the committee established by big ABCP investors.

"I want to thank all committee members for their dedication and hard work over this prolonged period, as well as investors and other stakeholders for their patience and understanding over the past 17 months as we worked through the many challenges associated with this restructuring," Crawford added.

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