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'Sunshine over the hill' for ABCP investors: Purdy

Wednesday, April 02, 2008

VANCOUVER -- The head of the committee trying to repair Canada's non-bank asset-backed commercial paper market gave his strongest indication on Wednesday that retail investors in the troubled debt instrument could get their money back.

"That's what I've been trying to tell you all day, that's what's going to happen," Purdy Crawford told a room of about 200 retail investors in Vancouver after one demanded that they be given their money back.

Mr. Crawford gave no further details of the possible relief plan.

About 1,800 individual investors own less than 1% of Canada's non-bank asset-backed commercial paper. The paper has been frozen since last August, when investors in the short-term debt instruments stopped purchasing the securities on concern about ties to the U.S. subprime mortgage market.

Under Canadian rules, investors holding two-thirds of the value of the ABCP must vote in favour of the rescue, which includes a swap of the short-term notes with others that would mature in seven years, at a meeting set for April 25.

A simple majority of investors must also approve it, giving the small retail players power due to their numbers versus major institutions.

"I think there is sunshine over the hill for you investors," Mr. Crawford said.

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