ABCP bailout good news for YTG

Over the last eight months, retired Vancouver real estate agent Yulan Wong “nearly lost it.” Wong had $300,000 of her retirement savings…

Over the last eight months, retired Vancouver real estate agent Yulan Wong “nearly lost it.”

Wong had $300,000 of her retirement savings — as well as money that her niece had entrusted to her — invested in frozen asset-backed commercial paper.

“I couldn’t sleep, I couldn’t eat. I was very unhappy to tell my niece that I’d lost her money,” she said.

“Three months ago I thought I would never see the money back again.”

Wong was planning on selling her home, in order to pay back her niece and get some spending money for herself, she said.

“I’m 60. I can’t just pick up and go hustle.”

So it came as a huge relief when she heard that small investors would be paid back in full.

Canaccord Capital announced on Wednesday that it would pay back all of their investors under $1 million.

That means that 1,430 people will have their money returned with interest, if the paper is restructured.

The announcement is good news to more than just individual investors.

The large institutions that own the majority of the $32-billion asset-backed commercial paper market will be happy to see these individuals appeased.

After organizing together using Facebook, the individual investors were threatening to vote down the restructuring agreement, which would turn the defunct short-term investments into long-term ones.

The small investors couldn’t afford to wait up to nine years for the new paper to mature.

And they didn’t want to give up the right to sue for damages.

A majority is required in the upcoming vote to pass the restructuring deal and the 1,800 small investors significantly outnumber the 100 large institutions.

The Yukon government is one of these institutions and has $36.5 million frozen.

“First impressions are it increases the likelihood of a ‘yes’ vote,” said assistant deputy Finance minister Clarke LaPrairie of Wednesday’s bailout.

The government hasn’t officially decided yet but it is leaning toward supporting the restructuring deal, said LaPrairie.

Unfortunately, the deal isn’t good news for everyone involved.

Credential Securities Inc. has not announced whether it will repay its nearly 400 small investors.

“I feel quite sorry because in our (Facebook) group, there are Credential people,” said Wong.

“We can’t really celebrate with our friends not getting their money back.”

“If I went today to vote I would be in a dilemma, definitely,” she continued.

“It seems rather selfish — it’s like a big boat is sinking, there are only two lifeboats and you’re leaving your friends behind.”

Wong describes the whole experience as “confusing, heartbreaking and shocking.”

“I came from China and I was always very proud that we do things right here,” she said.

“I am still quite shocked that the banks run the way they do here. I’m not so trusting anymore.

“Yesterday, I was quite proud again to be Canadian. It’s still a wonderful country.”

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