“‘A long, tough struggle’ ends finally, with deal: Crawford praised for his steady leadership”, by Boyd Erman, Toronto Globe & Mail, December 26, 2008.

The broad terms of the plan, which required last-minute government support and backing from banks in Canada and abroad, came together last weekend, but the final details had yet to be ironed out, with a year-end deadline approaching. It wasn’t until late on Christmas Eve that the committee announced that finally, the terms were set and there was a new plan to get investors access to the $32-billion that’s been locked in frozen ABCP since August, 2007.

The judge overseeing the restructuring must still sign off on the plan, but that’s expected to happen in early January, clearing the way for the seized-up paper to be exchanged for new bonds.

Many small investors should receive cash under relief plans offered by their brokerages soon after. Although the process has had a few false starts, Mr. Crawford is confident the deal is finally done.

“This is not going to be held up,” he said. [translation: before it was premature to hold a public debate and by Monday it will be too late]
…

Dealing with the government was also difficult, because Finance Minister Jim Flaherty at first wanted to avoid using public money. [uh, what about the public's attitude on their own money ... oh never mind]

“Getting the government involved was a lot of time over about three or four weeks,” said Mr. Crawford, who stressed that without Ottawa, the deal may not have succeeded.

“Bugged” is right, Igor.

“Canadian commercial-paper plan takes step forward”, Reuters, December 24, 2008.

Canada’s federal government and three provinces have agreed to provide C$4.45 billion ($3.65 billion) in backstops to support a plan to restructure C$32 billion in asset-backed commercial paper that has been frozen for more than a year.

The margin facilities provided by Ottawa and the provinces of Quebec, Ontario and Alberta bring the total guarantees for the restructuring to $17.82 billion, the investor committee that organized the plan said in a statement on Wednesday.

“Ottawa, provinces provide $4.45B for ABCP rescue”, by Philip Ling, Vancouver Sun, December 24, 2008.

The government support “were vital for the conclusion of this agreement,” said Fernand Perreault, Caisse’s acting president. “The closing of the restructuring plan is very much in sight.”

Finance Minister Jim Flaherty said Tuesday that he would have preferred it if the government did not have to provide financial backing to support a deal to restructure frozen ABCPs held by Canadians.

“This was a private sector created problem, and I would have preferred a private sector solution,” Flaherty said.

“Having said that, as minister of finance I am responsible for the systemic integrity of our financial system in Canada and my conclusion was that we needed to participate.”

“The Caisse de dépôt et placement du Québec comments on the restructuring of canadian third-party ABCP”, Press Release, Newswire (Canada) -source: Caisse, December 24, 2008.

“The involvement and support of the governments of Québec and Canada in
particular were vital for the conclusion of this agreement. I should also like
to point out the excellent effort by the Caisse teams, which made a remarkable
contribution to the work of the Pan-Canadian Committee,” Mr. Perreault added.

“Governments to back ABCP deal with $4.45B”, by Rita Trichur, Toronto Star, December 25, 2008.

Canadian non-bank ABCP, a type of short-term commercial debt, has been in crisis since seizing up in August 2007. The market experienced a dearth of buyers over worries that American subprime mortgages were among the assets backing the securities.

“Canadian Government Agrees to Backstop Commercial Paper Plan”, by Sean B. Pasternak, Bloomberg, December 24, 2008.

The governments and other parties will provide a total of C$4.45 billion in additional margin facilities, the group charged with restructuring the paper said today in an e-mailed statement. The margin facilities for the plan now total C$17.8 billion.

“‘Tentative’ ABCP plan touted: $32-Billion Frozen; Investors committee has funding deals with governments”, by Jim Middlemiss, National Post, December 24, 2008.

It’s deja vu all over again in the asset-backed commercial paper saga.

One year ago to the day that the Pan-Canadian Investors Committee first claimed victory by announcing a “tentative” deal to restructure the frozen $32-billion market, the committee has confirmed it has a new “tentative” agreement that would lead to some investors being paid in full and others left holding long-term notes that will pay back their capital in eight years or so.
…

“It’s very difficult to polish a turd … maybe these guys have done the unthinkable. Maybe they actually polished a turd, who knows. If they do, I will be very excited to get my resources back,” he added.

On Dec. 23 last year, after missing a number of self-imposed deadlines, the committee announced it had a deal in place to turn the short-term paper into long-term notes, which would see investors repaid their capital if they held them to term, about eight years.

“Court extends deadline for ABCP restructuring as panel confirms deal”, Canadian Press, December 25, 2008.

The documents were made available by the court-appointed monitor, Ernst & Young Inc. on its website (www.ey.com/ca/commercialpaper).

“Xmas present for ABCP holders courtesy of federal and provincial govts”, KenOnCanPolitics blog, December 25, 2008.

It seems that the old free market let losers fail philosophy is now being abandoned by govts. in power no matter what their political stripes. Of course this is all just temporary. …

I’ve learned in the past year to be suspicious of anything the government does on the weekend, a Christmas Eve deal has got to be even worse.

Igor’s feeling sad- and he’s not even a Canadian taxpayer!