Coventree Announces Continued ABCP Market Disruption

    Toronto Stock Exchange Symbol: COF

    TORONTO, Aug. 14 /CNW/ - Coventree Inc. (TSX: COF) today announced that
it was able to place liquidity-backed ABCP (also known as A notes) in the
aggregate amount of approximately $450 million issued by Coventree-sponsored
ABCP conduits including Aurora, Comet, Gemini, Planet, Rocket, Slate, SIT III
and SAT and was able to place extendible ABCP (also known as E notes) in the
aggregate amount of approximately $150 million issued by the
Coventree-sponsored ABCP conduit, Rocket. This ABCP was purchased primarily by
investors who elected to renew or roll-over their ABCP that matured today.
Coventree had previously announced that it was unable to place new ABCP to
fund the repayment of previously issued ABCP that matured yesterday, it had
extended E notes in an aggregate amount of $250 million and issued notices
requesting funding in the amount of $700 million under liquidity facilities
provided under A notes. As a result of the continuing market disruption, today
it has extended the term of E notes that matured today in the aggregate amount
of approximately $60 million issued by Coventree-sponsored ABCP conduits
including Aurora, Comet, Gemini, Rocket, Slate and SAT. On behalf of its
conduits, Coventree has also issued notices requesting funding under liquidity
facilities that support the A notes in the Coventree-sponsored conduits
including Aurora, Rocket, and SAT that matured today in the aggregate amount
of approximately $60 million.
    While Coventree sponsors and administers these conduits, they are
separate legal entities and the ABCP issued by them is non-recourse to
    A notes are supported by liquidity facilities that are intended to
protect ABCP investors from a market disruption that prevents the redemption
and roll-over of their notes at maturity. The facilities contain various
conditions that must be satisfied before a liquidity provider is obligated to
fund under its facility, including that (i) the rating of the liquidity-backed
notes is confirmed by DBRS Limited at R-1 (high) or R-1 (middle), as the case
may be, and (ii) the definition of what constitutes a market disruption is
met. DBRS Limited has again today reconfirmed the applicable outstanding
ratings of the liquidity-backed ABCP issued by Coventree's conduits and,
accordingly, the credit quality of the underlying assets. On behalf of its
conduits, Coventree has issued notices to liquidity providers under each of
the facilities referred to above. Certain liquidity providers have advanced
funding, some have disagreed that they have an obligation to fund, some are in
discussions with the Company and some have not responded. There is no
assurance that the liquidity providers to whom notice has been provided under
A note facilities during the ABCP market disruption will fund or be obligated
to fund under the relevant liquidity agreements. If liquidity is unavailable
under the terms of a facility or the liquidity providers do not fund as
required under the relevant agreements, that could lead to a default by a
conduit in respect of its issued and outstanding ABCP.
    Coventree's conduits have not paid the A notes that matured on August 13,
2007 or the A notes that matured on August 14, 2007 that the
Coventree-sponsored ABCP conduits were unable to roll-over. Under the terms of
the respective indentures governing the ABCP, upon a failure to pay, the
indenture trustee may give notice to the respective conduits that such
payments must be made within three business days, failing which an "Event of
Default" will occur in respect of the related conduit, which may lead to
acceleration of all obligations owing by the conduit.
    E notes are not supported by liquidity facilities. The terms of E notes
provide for the automatic extension of the notes that, when combined with the
original term of the notes, can be up to 364 days in the event of a market
disruption. An extension is subject to the satisfaction of the condition that
nothing has happened to the conduit or its assets that would result in a
ratings downgrade. 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.
    At this time, the Company is unable to predict the extent of the impact
of this market disruption on Coventree's financial results, operations, and
financial condition including any impairment of assets in future periods. The
current market disruption will adversely affect and may materially adversely
affect the future revenues of the Company. Coventree is unable to predict how
long the current market disruption will continue or the extent to which the
market disruption will affect the conduits' ability to raise funds to continue
to finance their operations.
    Coventree sponsors and administers ABCP conduits that in the aggregate
have approximately $16 billion in fundings outstanding, of which approximately
$7.7 billion are A notes and $7.3 billion are E notes.

    Forward-Looking Statements

    This press release includes certain forward-looking statements, including
those identified by the expressions "may", "would", "could", "will",
"anticipate", "believe", "plan", "forecast", "estimate", "expect", "intend",
"aim", "vision", "mission", "endeavour" and similar expressions to the extent
they relate to Coventree or its leaders or management ("leaders"). The
forward-looking statements are not historical facts but reflect such leaders'
current expectations regarding future results or events based on information
currently available to the leaders.

    These forward-looking statements are subject to a number of known and
unknown risks, uncertainties and assumptions. Many factors could cause actual
results, performance or events to differ materially from current expectations
that may be expressed or implied by such forward-looking statements,
including, without limitation, the matters discussed under "Risk Factors"
contained on pages 58 to 65 of the Company's Final Prospectus dated
November 15, 2006 and in other sections herein and therein. Should one or more
of these risks or uncertainties materialize, or should assumptions underlying
the forward-looking statements prove incorrect, actual results, performance or
achievements could vary materially from those expressed or implied by the
forward-looking statements contained in this report. These factors should be
considered carefully and prospective investors should not place undue reliance
on the forward-looking statements. Although the forward-looking statements
contained in this report are based upon what the Company's leaders currently
believe to be reasonable assumptions, the leaders cannot assure prospective
investors that actual results, performance or achievements will be consistent
with these forward-looking statements. These forward-looking statements are
made as of the date of this report and the Company does not intend, and does
not assume any obligation, to update or revise these forward-looking

    %SEDAR: 00024386E

For further information:

For further information: Craig Armitage, The Equicom Group Inc., Tel:
(416) 815-0700 x278, Email:

Organization Profile

Coventree Inc.

More on this organization

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890