Four of the Big Five banks have confirmed they will participate in the restructuring of third-party asset-backed commercial paper (ABCP).
Bank of Montreal, CIBC, Royal Bank and Scotiabank have agreed in principle—subject to certain conditions—to join National Bank, certain members of the pan-Canadian investors committee and certain dealer bank asset providers, and participate as lenders in the margin call funding facility.
The margin call funding facility is a key component of the restructuring plan and is intended to further enhance the stability of affected assets and support those which may require additional collateral in the future.
“The support of the major Canadian banks is an important component of the plan and we are pleased to confirm their participation, which further reflects the spirit of compromise and goodwill that has prevailed throughout this process,” says Purdy Crawford, chairman of the investors committee.
The committee now expects that complete information on the plan and details on the approval process by noteholders will be available toward the end of the month and its objective remains to complete the restructuring process by March 31, 2008.
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Committee members and dealer bank asset providers have agreed to a further extension of the standstill agreement to Feb. 22.
Also, following a request for proposals process, the committee has determined that BlackRock be appointed administrator and asset manager for the proposed restructuring vehicles. The investment management services firm has more than US$1.3 trillion in assets under management.
Under terms of the restructuring plan, most noteholders can expect to receive full principal repayment if they hold the new restructured notes to maturity.
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