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ABCP Update

Attention Business/Financial Editors:

A group of financial institutions agree on a solution to the liquidity problem on the structured finance asset-backed commercial paper market
MONTREAL, Aug. 16 /CNW Telbec/ - A number of major players in Canada's
financial markets met today in Montr?al to work out a solution to the
liquidity problem affecting the third party structured finance asset-backed
commercial paper ("Third Party ABCP") market in Canada being those conduits
listed in Annex A. The following institutions were present: ABN AMRO, Barclays
Capital, Caisse de d?p?t et placement du Qu?bec, Desjardins Group, Deutsche
Bank, HSBC, PSP Investments, Merrill Lynch, National Bank and UBS
(collectively the "Signatories").

DBRS was present for these discussions.

The Signatories have agreed in principle to the Long Term Proposal and
Interim Agreement set out below and to work together in good faith with the
other participants in the discussions to bring about the timely implementation
of these arrangements. The institutional investors who are Signatories are
confident that they have the support of investors who, together with them,
hold at least 66 2/3% of all outstanding Third Party ABCP. The Signatories are
also confident that additional market participants will confirm their
agreement with these arrangements within the next few hours. In addition, the
Signatories understand that the sponsors of the Third Party ABCP conduits
support the objectives of this initiative.

<<
AGREEMENT

Purpose

The purpose of these arrangements is to help establish normal operations
in the Canadian Third Party ABCP market.

Long Term Proposal

The general agreements summarized below will have to be adapted to the
circumstances of each Third Party ABCP conduit, however they define a
framework for the restructuring of these conduits.

1. All outstanding Third Party ABCP, including extendible Third Party
ABCP, will be converted into term floating rate notes (FRNs) maturing
no earlier than the scheduled termination date of the corresponding
underlying assets (together with pay through notes for Third Party
ABCP conduits which have mixed traditional and CDO assets).
2. Existing liquidity facilities will therefore not be necessary and will
be cancelled and all outstanding liquidity calls will be revoked.
3. Interest on the FRNs will be payable monthly or quarterly, as the case
may be, to match the fixed payment dates under the underlying assets.
4. Margin provisions will be revised to create renewed stability, thereby
reducing the likelihood of near term margin calls.

Interim Agreement

The Signatories have agreed as follows:

1. Holders of Third Party ABCP who are Signatories will continue to roll
their Third Party ABCP during the period ending 60 days following the
date of this Agreement (the "Standstill Period"). For greater
certainty this commitment is limited to Third Party ABCP beneficially
owned by the Signatories.
2. The Signatories will encourage all other holders of Third Party ABCP
to continue to roll their Third Party ABCP.
3. Signatories who are counterparties of the Third Party ABCP conduits
will not pursue any existing margin calls or make any further margin
calls during the Standstill Period.
4. The Third Party ABCP conduits will agree not to pursue any existing
liquidity calls during the Standstill Period or make any further
liquidity calls for 150 days after the Standstill Period.
5. All Signatories will encourage all other Third Party ABCP market
participants, including note trustees, to take all actions to
implement the long term proposal and to refrain from taking any
actions that will hinder the implementation of the long term
proposals.

Process and Timing

Implementing the ultimate resolution will generally require noteholder
meetings and in some cases may require court applications. Although these
processes will need to be carried out on a conduit by conduit basis, it is
expected that all necessary steps to give effect to each restructuring will be
completed within 30 to 60 days.
Ernst & Young has been appointed to assist in the implementation of these
arrangements. Holders of ABCP who would like to participate in the
implementation of the Long Term Proposal should contact Pierre Laporte of
Ernst & Young at the following telephone number: (514) 875-6060.

Further information is available at:
www.ey.com/global/content.nsf/Canada/Canadian_commercial_paper.


ANNEX A
THIRD PARTY ABCP CONDUITS

Apollo Trust
Aurora Trust
Comet Trust
Encore Trust
Gemini Trust
MMAI-I Trust
Planet Trust
Rocket Trust
SLATE Trust
Structured Investment Trust III
Apsley Trust
Aria Trust
Devonshire Trust
Foundation Trust
Ironstone Trust
Opus Trust
Selkirk Funding Trust
Silverstone Trust
Skeena Capital Trust
Structured Asset Trust
Symphony Trust
Whitehall Trust
Newshore Canadian Trust
>>



For further information: NATIONAL Public Relations: Roch Landriault:
(514) 843-2345, Cell.: (514) 249-4537


MONTREAL, Aug. 16 /CNW Telbec/ - A number of major players in Canada's
financial markets met today in Montr?al to work out a solution to the
liquidity problem affecting the third party structured finance asset-backed
commercial paper ("Third Party ABCP") market in Canada being those conduits
listed in Annex A. The following institutions were present: ABN AMRO, Barclays
Capital, Caisse de d?p?t et placement du Qu?bec, Desjardins Group, Deutsche
Bank, HSBC, PSP Investments, Merrill Lynch, National Bank and UBS
(collectively the "Signatories").

DBRS was present for these discussions.

The Signatories have agreed in principle to the Long Term Proposal and
Interim Agreement set out below and to work together in good faith with the
other participants in the discussions to bring about the timely implementation
of these arrangements. The institutional investors who are Signatories are
confident that they have the support of investors who, together with them,
hold at least 66 2/3% of all outstanding Third Party ABCP. The Signatories are
also confident that additional market participants will confirm their
agreement with these arrangements within the next few hours. In addition, the
Signatories understand that the sponsors of the Third Party ABCP conduits
support the objectives of this initiative.

<<
AGREEMENT

Purpose

The purpose of these arrangements is to help establish normal operations
in the Canadian Third Party ABCP market.

Long Term Proposal

The general agreements summarized below will have to be adapted to the
circumstances of each Third Party ABCP conduit, however they define a
framework for the restructuring of these conduits.

1. All outstanding Third Party ABCP, including extendible Third Party
ABCP, will be converted into term floating rate notes (FRNs) maturing
no earlier than the scheduled termination date of the corresponding
underlying assets (together with pay through notes for Third Party
ABCP conduits which have mixed traditional and CDO assets).
2. Existing liquidity facilities will therefore not be necessary and will
be cancelled and all outstanding liquidity calls will be revoked.
3. Interest on the FRNs will be payable monthly or quarterly, as the case
may be, to match the fixed payment dates under the underlying assets.
4. Margin provisions will be revised to create renewed stability, thereby
reducing the likelihood of near term margin calls.

Interim Agreement

The Signatories have agreed as follows:

1. Holders of Third Party ABCP who are Signatories will continue to roll
their Third Party ABCP during the period ending 60 days following the
date of this Agreement (the "Standstill Period"). For greater
certainty this commitment is limited to Third Party ABCP beneficially
owned by the Signatories.
2. The Signatories will encourage all other holders of Third Party ABCP
to continue to roll their Third Party ABCP.
3. Signatories who are counterparties of the Third Party ABCP conduits
will not pursue any existing margin calls or make any further margin
calls during the Standstill Period.
4. The Third Party ABCP conduits will agree not to pursue any existing
liquidity calls during the Standstill Period or make any further
liquidity calls for 150 days after the Standstill Period.
5. All Signatories will encourage all other Third Party ABCP market
participants, including note trustees, to take all actions to
implement the long term proposal and to refrain from taking any
actions that will hinder the implementation of the long term
proposals.

Process and Timing

Implementing the ultimate resolution will generally require noteholder
meetings and in some cases may require court applications. Although these
processes will need to be carried out on a conduit by conduit basis, it is
expected that all necessary steps to give effect to each restructuring will be
completed within 30 to 60 days.
Ernst & Young has been appointed to assist in the implementation of these
arrangements. Holders of ABCP who would like to participate in the
implementation of the Long Term Proposal should contact Pierre Laporte of
Ernst & Young at the following telephone number: (514) 875-6060.

Further information is available at:
www.ey.com/global/content.nsf/Canada/Canadian_commercial_paper.


ANNEX A
THIRD PARTY ABCP CONDUITS

Apollo Trust
Aurora Trust
Comet Trust
Encore Trust
Gemini Trust
MMAI-I Trust
Planet Trust
Rocket Trust
SLATE Trust
Structured Investment Trust III
Apsley Trust
Aria Trust
Devonshire Trust
Foundation Trust
Ironstone Trust
Opus Trust
Selkirk Funding Trust
Silverstone Trust
Skeena Capital Trust
Structured Asset Trust
Symphony Trust
Whitehall Trust
Newshore Canadian Trust
>>



For further information: NATIONAL Public Relations: Roch Landriault:
(514) 843-2345, Cell.: (514) 249-4537

 

 

 



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