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Couple calls for action over ABCP trading freeze

March 14, 2008

Rita Trichur

Retail investors with life savings entangled in the non-bank asset-backed commercial paper crisis are pleading with the House of Commons finance committee to hold hearings on the product's sale to Canadians.

Mike and Wynne Miles of Victoria say they are among the 1,400 ordinary investors with savings in asset-backed paper, or ABCP, trusts, which are frozen pending the completion of a restructuring plan known as the Montreal Accord.

The funds have been subject to a trading standstill since August, while the committee conducting the retooling finalizes plans to convert the short-term debt into longer-term notes. Chair Purdy Crawford has said the new maturities would range from seven to 10 years.

"We cannot wait seven to 10 years for our funds, and have not been provided with a guarantee that we will ever receive full value for our savings, much less any interest," Mike and Wynne Miles wrote in their letter.

"Mr. Crawford has indicated that the restructured ABCP is expected to be significantly discounted from the price we paid for it. My husband and I are self-employed, and we have a substantial portion of our retirement savings frozen as ABCP."

The couple say they know of many others who are experiencing "great financial and emotional distress" because of the trading freeze.

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