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So Wholesale North Carolina Tar Heels Jerseys , in August of 2007, it became painfully clear that the U.S. subprime mortgage sector was nearing a complete collapse, being tied to the underhanded U.S. housing loans, to say the least. What started as a small brush fire in an obscure market segment spread quickly and violently, impacting other types of derivatives, regardless of the type of loans serving as underlying assets.

In Canada, investors have also bought millions of asset-backed commercial paper (ABCP) notes Wholesale Michigan Wolverines Jerseys , which bundled anything and everything from mortgages to car loans to personal loans. At a time when banks were operating in an ultra-soft interest rate environment, ABCPs offered comparably solid returns for securities that were deemed low credit risk. As a result, in 2007, the popularity of ABCPs rose to the point that these investments accounted for approximately 30% of Canada's entire short-term debt market.

But when the smelly stuff hit the fan in the U.S., suddenly it was revealed that an unknown amount of ABCPs in Canada were tied to the U.S. subprime mess. What happened next was typical ? buyers vanished into thin air and the market in Canadian ABCPs came to a screeching halt. To avoid meltdowns on the institutional level, a group of financial institutions led by the Caisse de Depot et Placement du Quebec got organized and proposed a freeze in the ABCP market until some things could be figured out.

After months of "figuring things out," it became clear that only a very small portion of the ABCP market was connected to the U.S. subprime mortgage market. Unfortunately Wholesale Miami Hurricanes Jerseys , the damage was already done, and earnings of many solid corporate investors, such as Transat Group, who dared to have ABCPs in their investment portfolios, have been taking huge hits.

What now? Unfreezing a frozen market is not as easy as one might think. A restructuring plan has been put in motion, which, if approved by the majority of investors Wholesale Lsu Tigers Jerseys , could see all of their notes mature, as well as most, if not all, of their money paid out, too. The only problem is that some of these ABCP notes have long maturity dates, some up to nine years; yet, many investors don't have that long. Meaning Wholesale Kansas Jayhawks Jerseys , their mandates might have short investment horizons and those who have to sell short-term, like Transat Group had to for the past two quarters, are more than likely to lose money.

Adding to the problem is the fact that, since no one is currently trading ABCPs, there is no sure way of determining what their market value is. So, if the restructuring does not move forward, many of the ABCPs will have to be called in by the creditors and sold off at deep discounts. That would mean that investors who own the paper would get next to nothing.

There's more bad news. The restructuring deal Wholesale Georgia Bulldogs Jerseys , if voted in, is going to be costly, between eighty million dollars and one hundred million dollars, all of which will have to be paid for by the investors. Where is the money going, or rather who is going to receive the money? Well, the list is long, from lawyers to financial advisors Wholesale Florida State Seminoles Jerseys , to court officials to rating agencies ? most of the players who dropped the ball on this in the first place. And, on top of that, if the restructuring plan is approved, investors who have suffered damages due to ABCPs will not be able to sue the parties who got them to that point.

However, the alternative is much bleaker. If the restructuring does not get passed, the ABCP market will unfreeze and an overall meltdown is a distinct possibility. If trust companies holding the assets default, investors are likely to suffer considerable Wholesale Clemson Tigers Jerseys , irrevocable and perhaps even total losses.

On the balance of things, even though the Canadian ABCP market is not, and never was, as infested with bad loans as the U.S. subprime mortgage market was, the stigma has hit, and it has hit hard. The market is currently frozen and the restructuring plan is far from ideal, and not all that fair either Wholesale Auburn Tigers Jerseys , but it is still the best solution offered out there at the moment. And if some among our readers think that they're not impacted by what is going on in the ABCP market, you may want to think again; public companies that you own shares in might have invested in the ABCPs and might be eagerly awaiting the results of the April 25 vote