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Credential's ABCP relief plan expected this week

Mon Apr 14, 2008 12:04pm EDT


VANCOUVER, British Columbia (Reuters) - Credential Securities, an investment dealer for various Canadian credit unions, is likely to announce a relief plan soon for retail clients saddled with troubled asset-backed commercial paper, the head of the committee trying to repair the ABCP market said on Monday.

"Credential is working on a similar proposal (to Canaccord Capital) and we are reasonably optimistic that it will be announced in the next few days," lawyer Purdy Crawford said during a conference call.

"The sun will come up some day this week," Crawford said in response to question from an individual investor with Credential as to when a relief plan may be announced.

Crawford said he expected that clients of Vancouver-based Credential will get back all the money they invested in the ABCP securities, plus interest, in late May.

Some 335 Credential clients hold C$48 million ($47 million) of ABCP, money market investments that were issued by groups other than Canada's big banks.

That market, worth some C$35 billion, stopped functioning last summer when buyers fled on concern the securities were exposed to problematic U.S. subprime mortgages.

A committee led by Crawford has been working on a relief plan for almost eight months for large and small investors.

Focus has shifted in recent weeks to small retail clients, who although they hold only about 1 percent of the value of the frozen ABCP, greatly outnumber big institutional holders and are able to vote down a broad market restructuring plan.

The vote is scheduled for April 25.

Canaccord Capital Inc (CCI.TO: Quote), a Vancouver-based investment dealer, unveiled a plan last Wednesday to repurchase most of its clients' ABCP at 100 cents on the dollar on condition that the restructuring plan is passed.

Some 1,400 of an estimated 2,000 ABCP noteholders are Canaccord clients.

($1=$1.02 Canadian)

(Reporting by Nicole Mordant; Editing by Rob Wilson)

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