There’s a good chance Credential Securities Inc. will announce a buyout program for small investors who bought asset-backed commercial paper from the firm, the chair of the committee that is restructuring Canada’s $32 billion ABCP market, said today.
“We are reasonably optimistic that [a plan] will be announced in the next few days,” said Purdy Crawford, chairman of the Pan Canadian Investors Committee for Third Party ABCP, in a conference call with investors today.
Credential is one of two major sellers of the currently frozen notes. Last week, Canaccord Capital Inc. announced its plan to buy back 97% of the paper bought by clients who own less than $1 million of the notes.
The so-called Canaccord Relief Program, through which the firm will buy back at par value up to $138 million of restructured ABCP notes from its clients, applies to about 1,430 investors, according to the company.
Credential investors have been awaiting word on their frozen notes since Canaccord released its plan last Wednesday.
“We’re very, very hopeful that credential will come up with a plan similar to Canaccord’s,” Crawford said. “If my anticipation turns out to be right,” he told one investor looking for answers. “You’ll get all your money back with interest.”
“We’re encouraging Credential and we’re optimistic,” he added.
Credential Securities Inc. is the full-service investment dealer for the Canadian credit union system.
Reports have estimated that about 335 people have invested approximately $48 million in ABCP with Credential.
“Not only Credential, but all of the credit unions that they sold the paper for or through, have a question of reputation here,” said Crawford when asked about the likelihood of a plan being announced soon. “That’s why I think they are working hard to come up with a solution.”
Credential likely to announce ABCP buyback plan this week, says Crawford
Committee hopeful dealer will follow Canaccord’s lead
- By: Regan Ray
- April 14, 2008 April 14, 2008
- 12:30