- The Canadian market's woes began Monday in the wake of
turmoil in the asset-backed commercial paper market, sparked by news Monday
that Coventree Inc. (COF.T) was unable to sell the debt to investors and
were unable to repay maturing issues. This was subsequently followed by
news that 17 issuers have requested funding from their liquidity providers.
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- "I know that there are distinct pressures in the
market for the non-bank sponsored asset-based commercial paper vehicles,"
Finance Minister Jim Flaherty said. "It is in the best interest of
all involved that sponsors, liquidity providers and investors engage constructively
to pursue orderly market solutions to this liquidity situation."
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- The stock sell-off intensified Thursday as investors
looked to reduce risk and get out of equities. This came even as major
participants in the Canadian asset-backed commercial paper market agreed
in principle to stabilize the market by converting outstanding debt into
longer-term floating-rate notes, a move that Flaherty lauded.
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- "I welcome the announcement this morning by major
investors and liquidity providers in the structured product portion of
this market," he said. "One of the attractive features of this
agreement is that it provides time for full information and analysis of
these securities."
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- Dow Jones Newswires
- Copyright (c) 2007 Dow Jones & Company, Inc.
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