Coventree Comments on Impact of Closing of ABCP Restructuring


    Toronto Stock Exchange Symbol: COF

    TORONTO, Jan. 21 /CNW/ - Coventree Inc. (TSX: COF) ("Coventree" or the
"Company") today commented on the impact on the Company of the closing of the
restructuring (the "Restructuring") of the market-disrupted Canadian third
party asset-backed commercial paper ("ABCP") implemented by the Pan-Canadian
Investors Committee (the "Investors Committee") as announced by the Investors

    As part of the closing of the Restructuring:

    -   Coventree was released from any future legal liability that the other
        parties involved in the Restructuring could claim against Coventree
        in connection with its role as sponsor, administrative agent and
        financial agent for the ABCP conduits sponsored by Coventree (the
    -   Coventree entered into an agreement (the "Transition Services
        Agreement") to provide certain transitional administrative services
        for four months (the "Transition Period") to the new special purpose
        vehicles ("SPVs") which acquired the Conduits' assets;
    -   Coventree sold certain advances receivable owed to Coventree by the
        Conduits and subordinated interests in certain of the Conduits'
        assets held by Coventree for an aggregate of $5.2 million in cash;
    -   the Conduits and the agreements under which Coventree acted as
        financial agent and administrative agent of the Conduits were

    The advances receivable and subordinated interests sold by Coventree were
recorded on its balance sheet as at September 30, 2008 at a fair value of $5.5
million. Coventree expects that it will record an unrealized loss from
financial instruments of $0.3 million in respect of these assets in its fiscal
2009 first quarter ended December 31, 2008.
    Coventree entered into the Transition Services Agreement at the request
of the Investors Committee. Coventree expects to be paid approximately $9.4
million in fees under the terms of the Transition Services Agreement.
Coventree may engage subcontractors in connection with the provision of these
services. Coventree expects that, net of any amounts that may be paid to
subcontractors, these fees will offset a substantial portion of the severance
and other termination costs included in the restructuring activities charge
recorded by the Company during the quarter ended September 30, 2008, as well
as other expenses Coventree will incur during the Transition Period and its
orderly wind down.
    Consistent with its previously announced plans, the Company expects to
implement an orderly wind down of its operations. The Company will reduce its
workforce, including senior officers, as and when their services are no longer
required by the Company to meet the Company's obligations under the Transition
Services Agreement or to complete the wind down of the Company. On
satisfaction of its obligations under that agreement, the Company expects to
retain only a few employees required to finalize the orderly wind down of the

    Forward-Looking Statements

    This press release includes certain forward-looking statements relating
to the Company's expectations to be paid approximately $9.4 million in fees,
that such fees will offset a substantial portion of the severance and other
termination costs and to seek an orderly wind down of its operations. These
statements can be identified by the expression "expects". The forward-looking
statements are not historical facts but reflect Coventree's current
expectations regarding future results or events based on information currently
available to Coventree.
    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 "Risks and
Uncertainties" contained on pages 21 to 24 of the Company's Management
Discussion and Analysis for the year ended September 30, 2008 which is
available under the Company's profile on SEDAR at Should one or
more of these risks or uncertainties materialize, or should assumptions
underlying the forward-looking statements prove incorrect, the Company many
not seek an orderly wind down on the terms set out herein or at all. These
factors should be considered carefully and prospective investors should not
place undue reliance on the forward-looking statements. These forward-looking
statements are made as of the date of this press release and Coventree does
not intend, and does not assume any obligation, to update or revise these
forward-looking statements, except as required by law.
    This press release is intended for distribution in Canada only.

    %SEDAR: 00024386E

For further information:

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

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