Canadian Non-Bank ABCP: Almost Beginning Cash Payments!

The Globe and Mail reports:

An Ontario judge has approved the plan to restructure $32-billion of asset-backed commercial paper, moving individual and corporate investors closer to recovering troubled investments that have been frozen since last August.

Mr. Justice Colin Campbell of the Superior Court of Ontario issued reasons for his decision to approve a plan that was challenged by a number of individual and corporate investors.

The plan grants a sweeping immunity to every bank, rating agency and other major funds that helped nurture the market. The immunity will shield the ABCP players from future lawsuits related to the investment crisis. Not protected from this immunity are brokerages or dealers that may have fraudulently sold the troubled notes to investors.

It is widely expected that some investors will seek to appeal the judge’s decision, meaning that investors may have to wait at least another month to receive money or new securities that will be issued under the plan.

The Financial Post notes:

The plan calls for the ABCP, which seized up when the credit crunch hit nearly 10 months ago, to be converted to long-term notes.

It will be most interesting to see what disclosures are made on the notes and what price levels become established for them. PrefBlog’s last post in this dreary saga was Almost, but Campbell Procrastinates.

One Response to “Canadian Non-Bank ABCP: Almost Beginning Cash Payments!”

  1. […] This affirms the earlier decision by Mr. Justice Colin Campbell. […]

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