Mitch Joel WARNING... LONG RANT! It takes a lot for me to both get angry and publish about it. Canada’s…
Disgruntled investors lose Ontario court bid in ABCP meltdown
(CBC News) Disgruntled investors, who bought asset-backed financial instruments, will need to go to the Supreme Court of Canada if they still want to scuttle an agreement in one of the country’s largest financial meltdowns ever.
On Monday, the Ontario Court of Appeal turned down a bid by the investors to scuttle a 2007 deal concerning asset-backed commercial paper (ABCP) investments.
ABCP case coming out Monday
Jim Middlemiss, Legal News, ABCP file
(National Post) The Ontario Court of Appeal has announced that its long-awaited decision on the asset-backed commercial paper workout will be released after markets close on Monday, Aug.18, at 5 pm.
That’s little more than a year since the $32-billion market froze up in light of the credit crunch and led to a massive restructuring effort by the Pan Canadian Investors Committee.
Rousseau to leave Caisse; changing of guard stirs debate
MONTREAL — Henri-Paul Rousseau’s surprise departure as head of Caisse de dépôt et placement du Québec is not just another executive job change. It’s a springboard for a heated debate over the role and management of the province’s most powerful economic institution.
Opposition politicians used the occasion to slam the Caisse under Mr. Rousseau’s watch for its massive investments in the troubled asset-backed commercial paper market.
Toronto-Dominion Avoids Subprime as Banks’ Costs Rise
(Bloomberg) — Toronto-Dominion Bank Chief Executive Officer Edmund Clark’s decision three years ago to dump subprime debt “that didn’t make common sense” may pay dividends again this week.
Canada’s third-biggest bank will probably avoid writedowns on securities linked to U.S. home loans when it reports second- quarter results on May 28. That contrasts with its five main competitors, including Royal Bank of Canada and Bank of Nova Scotia, which may report as much as a combined C$4 billion ($4.04 billion) of markdowns and credit losses, adding to C$6.6 billion from the prior three quarters.
May 16, 2008
Just when we thought everything was settled!
Judge delays ABCP ruling over legal immunity concerns
An Ontario Superior Court judge has delayed his decision on a controversial restructuring of $32-billion of frozen asset-backed commercial paper, saying he needs to hear more submissions.
In comments Friday, Mr. Justice Colin Campbell indicated he is particularly concerned with legal releases contained in the restructuring that would provide blanket immunity from legal action to firms involved in the manufacture and sale of the illiquid ABCP.
An ABCP legal conundrum
A decision on Canada’s biggest restructuring could come as early as today, and it could set a nasty precedent for the civil justice system.
(Financial Post) Mr. Justice Colin Campbell faces an all-or-nothing proposition. If he rejects the plan in the $32-billion non-bank asset-backed commercial-paper restructuring, it puts investors’ money at risk and could lead to financial anarchy as banks scramble to collect on their security.
Back the deal and he blesses broad legal releases that bar investors from suing for breach of fiduciary, breach of contract, negligence, bad faith and fraud.
Barring fraud claims would prevent civil lawsuits for injuries from a criminal act and that’s bothersome — as is barring lawsuits in general. It’s a basic right of citizens in a democracy to sue. That’s why we have courts.
April 25, 2008
Investors vote in favour of plan to restructure $32B of frozen commercial paper
David Friend, THE CANADIAN PRESS
TORONTO – Investors holding $32 billion in frozen asset-backed commercial paper have voted overwhelmingly in favour of a plan to restructure the investments, clearing one of the hurdles that had to be overcome before the issue can be laid to rest.
Nearly 96 per cent of 1,932 noteholders – representing $28.8 billion of the assets – approved the restructuring proposal which aims to recover money they haven’t been able to access for more than eight months.
It seems that someone out there was listening to the advice of Wednesday Night
April 9 2008
Canaccord unveils rescue package for ABCP investors
Wednesday, April 9, 2008 3:12 PM
(CBC News) More than 1,400 retail clients of Canaccord Capital who’ve had money tied up by the credit crunch have been offered a rescue package that could see them get all their money back.
Under terms of the relief plan, Canaccord will buy back at par the now frozen investments from all of its clients who hold $1 million or less.
The plan calls for the purchase of up to $138 million of the debt. Canaccord estimates that 1,430 clients (97 per cent of those who hold the notes) will be eligible for the program.
“After months of negotiation and evaluating numerous bids from parties interested in purchasing the notes, our client relief program and the related charges represent the best possible outcome in this unprecedented disruption in the Canadian capital markets,” said Canaccord chief operating officer Mark Maybank in a statement.
Canaccord won’t identify who else has agreed to buy the distressed notes.
A committee has been trying to restructure the debt and unstick the frozen ABCP market in Canada. Under the terms of a proposed restructuring deal, investors would have to wait up to nine years to get their money back and agree not to sue. If the deal falls apart, they risk getting as little as 20 cents on the dollar, some estimates say.
The committee that worked out the restructuring deal said Wednesday it welcomed the Canaccord announcement.
Investors committee calling all noteholders
(The Gazette) The Pan-Canadian Investors Committee for non-bank asset-backed commercial paper will hold a national teleconference for noteholders on Monday at 11:00 a.m. The conference call is aimed at providing noteholders an opportunity to ask questions about the committee’s proposed plan to restructure 20 of the trusts covered by last summer’s Montreal Accord, affecting $32 billion of notes. As a followup to the recent cross-Canada investor presentations, it will also offer an opportunity for noteholders who were unable to attend those meetings in person to learn more about the plan.
NatBank ups ABCP help
For clients saddled with troubled paper
(Reuters) National Bank of Canada announced extra financial assistance yesterday for corporate and commercial clients saddled with troubled asset-backed commercial paper.
National, Canada’s sixth-biggest bank, said it will offer improved credit facilities to about 100 business clients from now until the maturity of notes, which are be issued under a restructuring plan for the frozen market.
National agreed last August to buy about $2 billion in ABCP from its mutual funds and retail clients after the bank had encouraged customers to invest their money in the money market securities.
It did not make the same offer to its business clients although it has made available $670 million in credit facilities to them. National said yesterday that clients had used $119 million of these facilities as of Feb. 18.
The additional support will see National make credit facilities available to business clients for an initial period of two years after the restructuring proposal is adopted, with the possibility of extending this annually.
December 24, 2007
(CanWest) OTTAWA — Finance Minister Jim Flaherty gave his stamp of approval Monday to the deal reached late Sunday to restructure Canada’s troubled commercial-paper market.
On Sunday evening, the committee overseeing the restructuring of $33 billion in commercial paper, struck a deal that aims to allow investors full repayment if they hold on to the investments to maturity.
The Pan-Canadian Investors Committee, led by chairman Purdy Crawford, also provides a funding mechanism through Canadian banks.
The non-bank commercial paper market has been frozen since the credit crunch hit this summer when defaulting subprime mortgages sideswiped credit markets around the world and led to difficulties to Canadian banks. More