Saturday, November 10, 2007

ABCP to Start Trading Wednesday - Watch Out Below

Perimeter Financial will defy the terms of the Montreal Accord and start trading $35-billion of frozen debt. As soon as trading starts new prices will be set and owners of the paper will likely be forced to write down the value of their papers at a discounted price. Small resource companies and wealthy individuals that have made these terrible investments by holding ABCP never signed on to the Montreal Accord. Perimeter is giving these parties an exit. Some of these investors will dump their ABCP and then sue the banks that sold it to them.

The Caisse would be forced to take a $1.8-billion writedown if trading is at say 85c on the dollar (quite a a high figure actually).

The trusts eligible for trading next Wednesday are the ones mentioned here in past months: Apollo Trust, Aurora Trust, Comet Trust, Gemini Trust, Planet Trust, Rocket Trust, Slate Trust, Ironstone Trust, MMAI Trust, Silverstone Trust, Structured Asset Trust, Structured Investment Trust III, Skeena Capital Trust, Aria Trust, Encore Trust, Newshore Canadian Trust, Opus Trust, Symphony Trust, Apsley Trust, Devonshire Trust, White Hall Trust and Selkirk Funding Trust.

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