Liquidity issues that destabilized the delicately balanced ABCP market in recent weeks migrated north into Canada. Similar to problems that unfolded in the U.S. ABCP market, lack of investor confidence in the debt capital and credit markets widened spreads on all types of Canadian ABCP.

More to the point, investors virtually stopped supporting ABCP vehicles that were sponsored by specialty finance companies and that funded residential MBS, particularly securities supported by U.S. assets.

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