Strategem Capital Corp. sold 100% of its Canadian ABCP for proceeds of CDN$1,884,993 and bought units in a managed fund that will provide similar exposure to the ABCP market, according to a release from the company.
The sale price represents $0.40 per $1.00 of face value of the MAV 2 A1 notes, and $0.28 per $1.00 for the A2 notes, the release said.
Stratege, Capital paid CDN$2,340,000 for 234,000 units of the Absolute Core Return Fund, whihc is managed by KCS Fund Strategies, a boutique investment management firm that is also located in Vancouver, B.C.
The Fund now has about 80% of its assets invested in a portfolio of various classes of the restructured ABCP including MAV 2 A1 and A2 notes. The balance of its assets are invested in publicly listed securities.
By selling its ABCP holdings and buying fund units, Strategem retains similar exposure to the ABCP market, and benefits as well from a fund management team with experience in structured finance.
Strategem held CDN$6.5 million of ABCP in 2007 when the products matured but were not redeemed. According to the release, the ABCP then became the subject of a continuing restructuring process that replaced the ABCP with restructured notes in 2009.
The firm has recorded a series of write-downs on the ABCP since 2007 and at June 30 valued its ABCP holdings at CDN$1,303,861.