By Doug Alexander
April 8 (Bloomberg) -- Credential
Securities Inc., a brokerage for Canadian credit unions, is working on a
"relief plan'' for its clients who bought C$48 million ($47.4 million)
in asset-backed commercial paper that stopped trading in August.
"We are looking at a whole range of
possibilities,'' Elaine McHarg, a senior vice president at the
Vancouver-based brokerage, said today in an interview. "We would not be
looking at buying it back without appropriate partnerships.''
Credential sold the debt to about 335
customers, according to the brokerage. They are among an estimated 1,800
individuals and at least 100 companies holding C$32 billion in paper
that stopped trading after investors shunned the debt over concerns
about ties to U.S. subprime mortgages.
A group of banks and institutional
investors reached an agreement March 17 to swap the insolvent paper for
new notes that mature within nine years. Some investors, including
Credential customers, have said they'll reject this proposal in an April
25 vote because they can't wait that long to be repaid, and they may
face losses if they try to sell the new notes before maturity.
"We are totally focused on finding a
relief plan for investors,'' McHarg said. "We're putting our best effort
at it and we're going to keep pushing until we get there.''
McHarg wouldn't comment further on the
relief plan. Credential is in contact with the investors' group that
drafted the restructuring, and has had discussions with Canaccord
Capital Inc., another Vancouver brokerage working on its own relief
plan, she said.
"This proposal would be separate from
Canaccord, but we are well informed by the Canaccord proposal,'' McHarg
Canaccord has been working on a "relief
program'' for its 1,400 investors holding C$269 million of the debt,
which may include lining up buyers for the notes, and trying to minimize
losses for investors.
To contact the reporter on this
story: Doug Alexander in Toronto at
Last Updated: April 8, 2008 17:18