The pan-Canadian investors committee for third-party structured asset-backed commercial paper(ABCP)has missed its deadline to come up with a restructuring plan.
The deadline, which was Dec. 14, has now been extended until Jan. 31, 2008.
The restructuring aims to replace the ABCP with notes having a maturity similar to the maturity of the underlying assets and will address the margin call requirements of certain of the trusts.
Proposed elements of the restructuring under consideration include:
• A restructuring with distinct solutions for ABCP that is supported solely by traditional, unleveraged assets(about $3 billion); ABCP which is supported by leveraged assets, unleveraged synthetic assets or a combination of leveraged and unleveraged assets(about $27 billion); and ABCP supported primarily by U.S. subprime assets(about $3 billion).
• The replacement of mark-to-market triggers by more remote spread loss triggers.
• A margin call credit facility to further enhance the credit quality of the new notes.
• An investment grade rating of the restructured notes.
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The committee has been advised that the Canadian banks are willing to consider measures where they can assist in the restructuring process.
“I am gratified by the progress that all parties have made in addressing the key issues affecting our restructuring,” says Purdy Crawford, chairman of the committee. “We have come a long way towards a successful outcome. I encourage our ABCP investors to allow us a short time longer to finish the task.”
To comment on this story, email craig.sebastiano@rci.rogers.com.