An Ontario judge has approved a plan to unfreeze the asset-backed commercial paper market, the Pan-Canadian Investors Committee for Third-Party Structured Asset-Backed Commercial Paper, said Monday.

As a result of the judge’s approval, the plan for restructuring $32 billion of third-party ABCP can now be implemented, the committee said. The restructuring is expected to close on January 16.

The approved plan involves swapping the frozen paper for new notes that will mature in about eight years’ time.

“After more than a year of patience and understanding on the part of investors, both large and small, and through the efforts and compromises of all the stakeholders around the table, we are very pleased to be entering this final phase of the restructuring,” said Purdy Crawford, chairman of the investors committee, in a release. “While no one could have predicted the scope and extent of the challenges that we’ve faced along the way, we continue to believe in the benefits of this restructuring and are pleased that we are arriving at its long-awaited and successful conclusion,” he stated.

The investors committee also announced that the first payment to be made to noteholders on account of interest on their existing holdings of ABCP or otherwise accruing in the ABCP conduits has been determined for each series of affected ABCP. “The amount of this initial payment — representing interest that has accrued on ABCP between August of 2007 and August 31, 2008, net of expenses, including restructuring costs and reserves — varies by Series pursuant to the provisions of the plan,” the committee said.

The first interest payment to noteholders is expected to be made within three business days after the closing date of the restructuring.

Further payments representing interest earned in the ABCP conduits for the period between September 1, 2008 and the closing date will also be made to noteholders. “The amount per Series of these further payments will not be known until after closing,” the committee said.

IE