The Caisse has rapidly re-established its normal level of liquid assets despite the commercial paper crisis

The Caisse has become aware of an article, published today in a Montréal newspaper, that purports to state the amount of its investments in third-party asset-backed commercial paper (ABCP).

1.  The Caisse would like to reiterate that it is a long-term investor and that its depositors’ undertakings are generally of a long-term nature. The quality of its assets and balance sheet enable the Caisse to cope with a crisis such as the one currently affecting the Canadian and international financial markets.

2.  The Caisse very quickly re-established the level of its liquid assets, which in all respects complies with its policies. The Caisse is able to meet all its depositors’ liquidity requests and adequately meet its own needs. The Caisse no longer considers ABCP to be part of its short-term liquid assets.

3.  The Caisse confirms that it became aware of the scope in the crisis in August and played a leadership role in defusing it by convening in Montréal a group of financial institutions that concluded what is now referred to as the Montréal Proposal. It then made concerted efforts with other partners to ensure all Québec and Canadian investors can benefit from the proposed solution. These concerted efforts led to the creation of a pan-Canadian committee, chaired by Purdy Crawford, with which the Caisse continues to work actively on ABCP restructuring.

The restructuring has three objectives:

• To convert the ABCP into medium-term instruments
• To ensure that in future these instruments are more transparent so that investors can evaluate them on the basis of the intrinsic value of the underlying assets
• To ensure that the new restructured instrument can be traded as quickly as possible on the secondary market that will develop

"In any crisis, we must avoid panic and work with all stakeholders," stated Henri-Paul Rousseau, Caisse President and Chief Executive Officer. "That is the objective of the Montréal Proposal, which has already been endorsed by more than 81%  of investors. I would ask those who have not already done so to complete the noteholder acknowledgment template available on the site www.ey.com/ca/commercialpaper. In that way, they can contribute to the adoption of a sustainable, definitive solution," Mr. Rousseau concluded.

4.  As for the figures given in the article published this morning, the Caisse does not intend to comment on them. The Caisse would like to point out that, under its constituting statute, it fully discloses its holdings once a year, using a rigorous procedure governed by Canadian and international standards. Since the Caisse manages its investments actively, the holdings in its portfolio vary constantly, in line with depositors’ investment policies. For that reason, it provides a list of its investments only when it publishes its annual report.