Thursday, January 8, 2009

ABCP Canadian Saga: Lawyers and Advisors $200M, Investors: 0.M

This blog started about 1.5 years ago at the height of the Canadian Asset-Backed Commercial Paper (ABCP) fiasco, where some mining companies and banks (and private investors) had their funds locked. Many of these were discussed here. I wish this would be a conclusion, but there won't be any until 2016.

After many turns and twists, that issue is still unresolved and that market remains as illiquid as it ever was, and none of those companies has seen their money.

However, there are some winners: according to the Financial Post on Tuesday, the lawyers and financial advisors of the ABCP restructuring. They have billed noteholders $200M in fees (or $199.1M to be exact, until December 16). $87M of this is going to JP Morgan.

The latest plan has some individual holdes getting their money back, while companies and institutions will have to wait until 2016 to get any money. This for investment that was supposed to be short term. Some deal!

Reference: Lawyers and advisors: $200M. Investors: 0.

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