Canada group seals commercial paper restructuring
TORONTO, Dec 23 (Reuters) - A Canadian investor group agreed in principle to restructure some C$33 billion of non-bank asset-backed commercial paper frozen since the summer and expects the holders of the assets to get their money back.
In a surprise statement released late on Sunday, the investor group, led by veteran corporate lawyer Purdy Crawford, said it had agreed measures to boost liquidity in the sector, which seized up in August when buyers started worrying about possible links to the U.S. subprime mortgage meltdown.
"I am confident that this plan will provide most holders of outstanding commercial paper with the opportunity to receive the full repayment of principal by holding restructured notes to maturity," Crawford said in the statement.
The investor group expects the deal to close in March, 2008. The agreement includes C$14 billion of margin funding financing arranged through a combination of investors, dealer bank asset providers, and some Canadian banks, and it will exchange the existing paper for longer-dated notes.
Asset-backed commercial paper, a segment of the short-term debt market, are secured by a pool of assets such as accounts receivable, auto loans, mortgages and credit-card receivables. (Reporting by Janet Guttsman; Editing by Derek Caney)
