TORONTO, Aug. 16 /CNW/ - CFI Leasing Limited, the administrative agent of
CFI Trust, today announced on behalf of CFI Trust that as a result of the
current unfavourable conditions in the asset-backed commercial paper ("ABCP")
market, CFI Trust has been unable to place new extendible ABCP to fund the
repayment of some of the previously issued extendible ABCP maturing yesterday.
As a result of this market disruption, CFI Trust has extended the term of its
extendible ABCP (also known as "E Notes") in the aggregate amount of $82
million previously issued by CFI Trust.
CFI Trust was created as a special purpose vehicle and issues notes
backed by the CFI Trust's revolving portfolio of leases and secured loans
related almost exclusively to passenger automobiles, sport utility vehicles,
mini-vans and pick-up and light duty trucks. Those assets are acquired from
experienced manufacturer franchised automobile dealers and independent leasing
companies in Canada which have each entered into a Program Agreement with CFI
Trust after being approved by the rating agency as originators to CFI Trust.
The only exception to motor vehicle assets is less than $300,000 in three
loans related to an energy efficiency program sponsored by the Ontario Social
Housing Services Corporation with a limited guarantee from The Ontario Power
As at July 31, 2007, CFI Trust had assets with a book value of
approximately $610 million. As of today, CFI Trust's total exposure to the
ABCP market consists of $103 million of E Notes including $21 million maturing
on September 10, 2007. The balance of the funding for the CFI Trust is
comprised of the publicly issued Series 2005-1 Term Notes in the amount of
$206 million rated AAA by DBRS and other privately placed term notes in the
amount of approximately $260 million under committed revolving lines of
At this time, CFI Leasing Limited cannot predict whether or not the
current market disruption will have regularized in order to allow the issuance
of additional E Notes to fund those maturing on September 10, 2007 or whether
the payment of those E Notes will also be extended.
CFI Leasing Limited believes that the only reason it is unable to place
the E Notes is as a result of factors completely external to and beyond the
control of CFI Leasing Limited. CFI Leasing Limited is not aware of any
diminished creditworthiness of the CFI Trust or any deterioration in the
performance of its portfolio of securitized assets.
The terms of the E Notes provide for the extension of the E Notes that,
when combined with the original term of the notes, can be up to 184 days in
the event of a market disruption. Investors are, in effect, providing the
requisite liquidity and receive a premium yield for bearing this risk.
Investors receive a premium interest rate during the extension period.
The timing of this disruption in the commercial paper markets did not
permit CFI Leasing Limited adequate time to meet with its funders and others
to discuss and put in place alterative financing to address yesterday's
maturing extendible commercial paper. CFI Leasing Limited believes that as a
result of the quality of the CFI Trust's assets and its originators that,
notwithstanding the duration of the disruption, it will be able to arrange
suitable financing on market terms within the extension period to retire its
This press release contains forward-looking statements, which are subject
to certain risks, uncertainties and assumptions. These forward looking
statements relate to, among other things, CFI Leasing Limited's plans,
objectives, expectations, estimates, beliefs and strategies. A number of
factors could cause actual results to differ materially from the results
discussed in such statements, and there is no assurance that actual results
will be consistent with them. Such factors include, among others, the risk
factors set forth in CFI Trust's Annual Information Form filed on SEDAR
(www.sedar.com). Given these uncertainties, readers are cautioned not to place
undue reliance on these forward-looking statements. The forward-looking
statements made herein are made as at the date of this news release, and CFI
Leasing Limited assumes no obligation to update or revise them, either
publicly or otherwise, to reflect new events, information or circumstances,
except as may be required under applicable securities law.
For further information:
For further information: John L. Burns, Senior Vice President & General
Counsel, (416) 673-2366