FREQUENTLY ASKED QUESTIONS
Q: When do I have access to my funds from the Canaccord Relief Program (CRP)?
A: On or before Monday, January 26, 2009, you will see the trades related to the
Canaccord Relief Program pending in your account. These trades should be settled,
with corresponding access to funds, by the late afternoon of Friday, January 30,
2009.
Q: Why doesn’t the Canaccord Relief Program transaction happen at the same
time as the restructuring implementation?
A: The Canaccord Relief Program combines the sale of the restructured ABCP to
third parties with a Canaccord-funded top-up to par value, as well as reimbursement
for restructuring expenses. The settlement timeline for the Canaccord Relief
Program is typical for transactions of this size and complexity.
Q: When do I get my interest?
A: For most ABCP, your first interest payment, for the period up to August 31,
2008, will appear in your account on or before Thursday, January 22, 2009.
Subsequent distributions are expected from the Court Monitor to cover the period
from September 1, 2008 to January 21, 2009. Late on Tuesday, January 20, 2009,
CDS informed us that some last minute changes have resulted in the postponement
of interest payments for a number of specific securities (“CUSIPs”). It only affects
holdings of Encore, Series E. We are told that the interest on these specific CUSIPs
is expected to be paid at the time of the second interest installment.
Q: What is my interest rate?
A: The interest rate on your ABCP holdings will vary by series, size and security
identifier (“CUSIP”). However, an approximate average rate for Structured
Investment Trust III Series A (SIT 3-A) from the date of market dislocation to
August 31, 2008 is 3.4%.
Q: How is interest calculated?
A: The interest is calculated using a methodology developed by Ernst and Young,
the Court Monitor, in the ABCP restructuring process. The methodology is relatively
complex; however, a summary and example of its application is available on
www.canaccordrelief.com.
Q: How are the restructuring expenses billed?
A: Canaccord is reimbursing eligible clients for any restructuring expenses as part of
the Canaccord Relief Program. This reimbursement will appear as an “interest
adjustment” line item in your account and, for the first interest distribution, this
represents approximately 0.31% of the par value of your ABCP investment. These
funds are expected to be available by the late afternoon on Friday, January 30, 2009.
Any additional restructuring expenses will be reimbursed in conjunction with the final interest distribution.
Q: Will the restructured notes appear in my account?
A: No, the restructured notes will not appear in your account. To simplify Canaccord
Relief Program transaction records, you will only see a pending disposition or sale
of your ABCP at par value in your account on, or before, Monday, January 26, 2009
and the cash received for that sale is expected by the late afternoon of Friday,
January 30, 2009.
Q: What if I do not see these transactions or funds in my account by the
specified deadlines?
A: If you have any concerns about your ABCP-related account activity after the
specified deadlines, please contact your Investment Advisor.
Q: Where can I get more details on the specific note entitlements?
A: Details regarding specific note entitlements are included in the 18th report of the
Court-appointed Monitor, Ernst & Young Inc., which is available on their dedicated
website (www.ey.com/ca/commercialpaper).
Q: What does this deal mean for Canaccord’s ABCP noteholders?
A: The Canaccord Relief Program provides certainty of liquidity and certainty of value after a successful restructuring for up to 1,430 or 97% of Canaccord’s impacted clients. Clients who hold $1 million or less of ABCP in aggregate will be eligible for this relief.
The program combines a third-party market bid with a Canaccord-funded top-up to achieve par value. Clients will remain entitled to receive any unpaid interest to the extent it is payable pursuant to the restructuring plan. Canaccord also will reimburse the share of the overall restructuring costs borne by our eligible clients.
The Canaccord Relief Program is dependent on a successful restructuring, as proposed by the Pan-Canadian Investors Committee. Note holders are scheduled to vote for this restructuring under the court process on April 25, 2008.
Q: How did Canaccord get to this deal?
A: Throughout our history, Canaccord has been committed to serving our clients’ needs and we upheld that commitment through this deal. Over the past several months, we have evaluated numerous proposals from a variety of different sources, and ultimately we chose the offer that was in the best interests of our clients. This deal represents the best possible outcome and allows us to repurchase all eligible clients’ ABCP investments at par.
Q: How do Canaccord clients know they can trust this deal?
A: All funds necessary to fund the repurchases of notes will be committed to escrow. The program’s only major condition is the successful completion of the restructuring process.
Q: Why did Canaccord decide to only support the clients holding under $1 million dollars in ABCP?
A: The $1 million level addresses the needs of 97% of Canaccord’s impacted client base, and represents the best offer we were able to negotiate for our clients.
Q: What is Canaccord doing to help clients who are not eligible for this program?
A: Unfortunately, 3% of Canaccord’s impacted clients are not eligible for this program. We will be providing loan facilities for all non-eligible clients, and, additionally our non-corporate clients will receive some form of top-up after the successful completion of the restructuring process. We will have further details on these initiatives at a later date.
Q: What are the next steps for clients who want to participate in the Canaccord Relief Program?
A: Clients who wish to participate in the Canaccord Relief Program should contact their Investment Advisor for details. Formal documentation will be available the week of April 13, 2008.
Clients holding ABCP will still be required to participate in the restructuring vote currently scheduled for April 25, 2008. Clients are required to submit their Voter Identification Forms (blue forms) to Ernst and Young by 5:00 p.m. EDT on Tuesday, April 22, 2008, and their proxies (green forms) by 5:00 p.m. EDT on the last business day before the meeting; as currently scheduled, that date is Thursday, April 24.
We will be updating this website, www.canaccordrelief.com, with all the required forms and instructions to participate in the program. More details are expected during the week of April 13, 2008.
Canaccord remains committed to proactively communicating with our clients throughout this process, and we look forward to providing you with clear and timely updates as they become available.
Q: How does this program work?
A: Eligible clients will be required to execute assignments of all the notes they will receive on the implementation of the restructuring – this will effectively ‘sell’ or ‘transfer ownership’ of these notes to Canaccord in return for their par value. These assignments will only be effective on payment in full of the purchase price by Canaccord to the investor.
Q: When would my investments become liquid, under the Canaccord Relief Program?
A: The closing of this transaction between Canaccord and the client noteholder will take place as soon as possible following the closing of the restructuring, but not more than 20 business days after the completion of the distribution of restructured notes in accordance with the Pan-Canadian Investor Committee plan. The Committee restructuring plan is currently scheduled to close at the end of May 2008.
Q: I have a question that has not been addressed on this website. Who can I contact?
A: The general email address for information about Canaccord’s Relief Program is relief@canaccord.com. Please feel free to submit any comments, questions or concerns to this address.
Q: Where can I get help in completing the voting forms for the noteholder meeting?
A: Please contact your Investment Advisor, who would be happy to help you participate in this important vote.
