Mavrix Fund Management Inc. today announced that it would backstop the Asset Backed Commercial Paper (ABCP) held in the funds it manages.

Mavrix says its funds that hold ABCP have approximately $327 million in assets, of which just under $4 million is ABCP.

The company’s money market funds hold less than 3% of ABCP. As well, Mavrix’s Dividend and Income Fund, and the two Flow Through Limited Partnerships from 2006 each hold 1% or less of ABCP.

Mavrix advises that the ABCP held by the funds, “namely Rocket and Gemini ‘E’ series, and the underlying assets, are amongst the very best quality in the ABCP sector.”

Mavrix notes that this is higher quality ABCP — DBRS re-affirmed the highest rating in August of this year.

Mavrix also says that “the ABCP held by the funds have no exposure to U.S. subprime mortgages, and no exposure to the use of leverage which many lesser quality conduits have.”

Mavrix confirms that this ABCP, has been extended in accordance with its terms and that its interest rate has been reset to CDOR + 1.10%.

Mavrix advises that it believes that, “as long as the conduit assets are not tampered with, the funds will receive full payment of the par value of these investments at maturity and that the reset interest rates adequately compensate the funds for the current lack of liquidity and that accordingly, it continues to value these securities at par.”

In advance of the proposed ABCP restructurings expected to be announced by the Pan Canadian Investor Committee on Friday, Mavrix says it has agreed to reimburse the funds for any shortfall should the ABCP realize less than par value at maturity or on a prior sale.