Canaccord Capital Inc. has completed its relief program which resulted from the restructuring of third-party Asset Backed Commercial Paper (ABCP), the full-service investment dealer announced Friday.

The Canaccord Relief Program repurchases, at par value, up to $152 million of restructured third-party ABCP from eligible clients. The transaction has closed and funds are now available in eligible client accounts, Canaccord says.

The programincludes clients who held $1 million or less of ABCP, approximately 1,440, or 98%, of Canaccord’s noteholder clients.

“Over the past seventeen months, Canaccord has worked to protect our clients’ best interests through a very difficult situation,” says Mark Maybank, chief operating officer. “I’d like to thank our investment advisors, operations team and everyone involved at Canaccord for working diligently toward this successful conclusion on behalf of our clients.”

The relief program combines transactions with third-party sources with a Canaccord-funded top-up to achieve par value. Clients have also received any unpaid interest to the extent that it is available under the restructuring plan and Canaccord has reimbursed the eligible clients’ actual share of any restructuring costs incurred, the company says.

Canaccord also announced that further charges are expected to be disclosed in the company’s fiscal third quarter results, scheduled to be announced on Feb. 12.

Additional out-of-pocket charges will result in an increase of the Canaccord Relief Program accounting provision by up to $2.7 million pre-tax. Furthermore, as a result of the completion of the Canaccord Relief Program, Canaccord has purchased MAV 2, Class 15 notes, with a book value of $9.5 million, which will be added to the company’s previously disclosed treasury position of $29.8 million.

As part of the quarterly earnings cycle and as management estimates the fair value of its ABCP holdings, Canaccord may apply further charges to this aggregate treasury position, the company says.

“When combined with the effect of challenging market conditions, including any potential for additional impairment of goodwill, our third quarter earnings are expected to be below the current consensus estimate,” it says.

“We are disappointed by the necessity of additional charges for our firm,” says Paul Reynolds, president and CEO. “However, our commitment to our clients and to the Canaccord Relief Program is unwavering. We remain a well-capitalized company focused on operating effectively in this challenging environment.”

More information about the Canaccord Relief Program is available to clients at www.canaccordrelief.com.

IE