Pan-Canadian ABCP Committee Seeks Court Approval for Restructuring Plan



    CCAA Process will ensure comprehensive solution, fairness to noteholders

    TORONTO, March 17 /CNW Telbec/ - The Pan-Canadian Investors Committee for
Third-Party Structured ABCP today announced that it has filed an application
in the Ontario Superior Court of Justice under the Companies' Creditors
Arrangement Act (CCAA) asking the Court to call a meeting of ABCP noteholders
to vote on the Committee's Plan to restructure 20 of the trusts covered by
last summer's Montreal Accord, affecting $32-billion of notes.
    The Committee has filed a copy of the Plan, related Information Statement
and other documents with the Court and these documents will be available on
Ernst & Young Inc.'s public website for the ABCP restructuring
(www.ey.com/ca/commercialpaper) once finalized. The documents will also be
mailed to noteholders in the next few days.
    The decision to file under CCAA follows an extensive review of
alternatives by the Committee, as well as its financial advisor, JPMorgan, and
its legal advisor, Goodmans LLP, to determine the most effective means to
achieve a comprehensive restructuring in a timely fashion and ensure that all
noteholders have an opportunity to consider the Plan.
    "The Committee has reached an understanding on the principal issues with
all major participants in the Third-Party ABCP market on how to address the
problems that are currently plaguing this market," says Purdy Crawford, Chair
of the Committee. "The CCAA process provides a Court-supervised means of
advancing the Committee's plan for this comprehensive and simultaneous
restructuring of all affected ABCP, giving noteholders an equal opportunity to
vote on the Plan under a Court-approved process."
    The Committee has asked the Court for permission to call a noteholder
meeting to approve the Plan. Assuming the Court approves this request,
investors will receive full information on the restructuring, including a copy
of the Plan and the Information Statement containing details on the meeting
and voting process. Mr. Crawford and other representatives of the Investors
Committee will hold investor meetings with noteholders in various major cities
after these materials have been distributed.
    Under CCAA provisions, the Plan must be approved by a majority of
noteholders (regardless of the size of their holdings) that vote at the
meeting, as well as by noteholders representing not less than 66 2/3 % of the
total aggregate principal amount of affected ABCP that vote at the meeting. If
the Plan is approved by the noteholders at the meeting, a further hearing will
be held before the Court for its final sanction of the Plan.
    Mr. Crawford explained, "Details of the restructuring plan have now been
substantially completed. The Committee is unanimously supporting the Plan, and
I am recommending that all noteholders approve the Plan in order to avoid a
forced liquidation of conduits and the significant losses that would likely
ensue if the Plan were not to move forward."
    Under the restructuring plan announced in December, noteholders would
benefit from an improvement in the potential for value recovery over time, a
lower risk of margin calls, investment grade credit ratings for the vast
majority of the new notes, and improved transparency with regard to the
underlying assets.
    Underlying assets in affected ABCP backed by synthetic and hybrid assets
will be cross-collateralized into one of two "Master Asset Vehicles" or
"MAVs". Certain large noteholders that have agreed to "self insure" by
contributing approximately $8.5-billion to fund any additional margin calls
associated with the pooled assets supporting their pooled notes, will
participate in "MAV1". Noteholders that satisfy eligibility requirements will
also have the option to participate in MAV 1.
    All other noteholders will participate in "MAV 2", for which a
third-party margin funding facility will be established. The Committee
confirmed that it has received an understanding from a group of Canadian banks
on the terms of their participation in a larger syndicate for the MAV 1 and
MAV 2 required margin call facility.
    Binding and non-binding understandings have now been reached for more
than 98.5 per cent of the required margin funding facility, and the Committee
is confident it will reach firm commitments and has the means available to
satisfy any remaining shortfall.
    The Committee has asked the Court to appoint Ernst & Young Inc. as
Monitor in the restructuring process. Their role would include administering
the voter identification and proxy processes, assisting with the noteholder
meeting, tabulating the results of the vote and reporting to the Court.
    Broadridge Financial Solutions has also been retained to assist in the
process by helping to identify and send materials to noteholders.
    The restructuring plan has been approved by the Committee and is
supported by certain dealer bank asset providers (a number of which will also
be participating as MAV 2 lenders) and the ABCP sponsors.
    The implementation of the restructuring is subject to a number of
conditions, including execution of definitive legal documentation, completion
of due diligence, receipt of internal approvals by dealer bank asset providers
and participating Schedule I banks, receipt of the requisite approvals of
holders of ABCP and final sanction by the Court. A variety of consents and
other approvals will be necessary or desirable in connection with the
restructuring, including certain governmental and regulatory approvals.




For further information:

For further information: MEDIA: NATIONAL Public Relations, Toronto:
David Weiner, (416) 848-1633, Cell: (416) 931-4633; Montreal: Roch Landriault,
(514) 843-2345, Cell: (514) 249-4537; INVESTORS: Ernst & Young Inc.: Pierre
Laporte, (514) 874-4383

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