Additional information related to the extension of the ABCP standstill agreements

The Pan-Canadian Investors Committee for Third Party Structured Asset Backed Commercial Paper is providing the following additional information with regard to the Montreal Accord’s standstill arrangements, as extended to December 14, 2007. The arrangements include the following key elements:

1. The members of the Investors Committee have agreed to take no action to enforce any default rights they may have against the issuer conduits during the extended standstill period.
2. The asset providers which are counterparties of the Third Party ABCP conduits will not pursue any existing margin calls or make any further margin calls during the extended standstill period.
3. The Investors Committee will take steps to encourage the Third Party ABCP conduits not pursue any existing liquidity calls during the extended standstill period or make any further liquidity calls for 150 days after the extended standstill period.

The extended standstill terms reflect certain modifications to the original Montreal Accord. Notably, holders of Third Party ABCP are no longer being encouraged to “roll over” their commercial paper. It became apparent that the administrative burdens in effecting rollovers during this period were particularly demanding for some of the conduits. The objectives of rolling over the commercial paper are largely achieved by the other elements of the extended standstill. As previously announced by the Investors Committee, the restructuring will ensure that no investor will be disadvantaged by virtue of having rolled over its ABCP. As a result, the Investors Committee will be requesting that each of the conduits discontinue the rolling of their affected ABCP.

Long Term Proposal
The Investors Committee, working closely with its financial advisor, JP Morgan, has concluded that the issues affecting ABCP are primarily a liquidity problem. Any long term proposal to resolve these issues will focus on solving these liquidity concerns.

DBRS has indicated to the Investors Committee that the vast majority of underlying assets in the affected trusts continue to exhibit strong credit characteristics consistent with the ratings that had been previously assigned to these assets.

Discussions between the Investors Committee and its advisors and the bank asset providers are continuing. The general elements of the long term restructuring proposal, first disclosed on August 16, 2007 as part of the Montreal Accord, remain important components of any planned restructuring. These are:

1. All outstanding Third Party ABCP, including extendible Third Party ABCP, will be converted into term floating rate notes (FRNs) maturing no earlier than the scheduled termination date of the corresponding underlying assets (together with pay through notes for Third Party ABCP conduits which have mixed traditional and CDO assets). 
2. Existing liquidity facilities will therefore not be necessary and will be cancelled and all outstanding liquidity calls will be revoked.
3. Interest on the FRNs will be payable monthly or quarterly, as the case may be, to match the fixed payment dates under the underlying assets.
4. Margin provisions will be revised to create renewed stability, thereby reducing the likelihood of near term margin calls.

These principles will be adapted to the circumstances of each Third Party ABCP conduit. In addition, certain conduits, because of their mix of conventional or unleveraged assets, may offer other solutions to providing investor value.

All parties remain focussed on creating restructured notes which are both highly rated and liquid. To that end, successful long term solutions will also require transparency of the assets underlying the restructured notes.

JP Morgan is well progressed in its initial review of the assets underlying the affected ABCP. The Investors Committee has also discussed various alternative restructuring proposals with the bank asset providers. In addition, the Investors Committee has developed coordinated arrangements with the various conduit sponsors and indenture trustees which will help facilitate the development and implementation of a restructuring.

The Investors Committee will continue to keep investors in the affected ABCP apprised of material developments with respect to the restructuring during the extended standstill period.