Press Releases

National Bank welcomes new step in ABCP restructuring

Montreal, 18 March 2008 -

The National Bank of Canada (TSX: NA) welcomes the major step taken yesterday by the Pan-Canadian Investors Committee for Third-Party Structured ABCP (Asset-backed commercial paper). 

The Committee, headed by Purdy Crawford, presented yesterday its proposed restructuring plan in its application to the Ontario Superior Court, under the Companies' Creditors Arrangement Act. The committee was formed following the Montreal Accord to create the conditions for an orderly restructuring of the third-party ABCP market in the interests of all stakeholders.

“The implementation of the restructuring plan will provide the best opportunity for the majority of the assets to mature at par by avoiding the threat of an early, disorderly liquidation,” said Ricardo Pascoe, co-president and co-CEO of National Bank Financial.

To support the efforts of the proposed restructuring plan, the Bank has committed to contribute to the margin funding facility in an amount of approximately $815 million. The margin funding facilitiy provided by Canadian investors and financial institutions is an integral part of the overall restructuring plan for the ABCP and is designed to reduce the risk that the restructured notes will be unable to fund margin calls if future circumstances warrant.

In anticipation of the final outcome of the ABCP market restructuring, the Bank has made credit lines available to its corporate clients that hold this financial instrument. The Bank is continuing its work to support these clients and minimize the consequences of the ABCP market freeze on their operations.

With the legal implementation of the Bank’s margin facility commitment, and based upon the Bank’s current Tier-1 regulatory capital ratio, this ratio would decline by approximately 15 basis points, remaining well above its target ratio of 8%. The Bank’s balance sheet remains very strong, with a very good liquidity level and a very solid capital base.

If the proposed restructuring plan is implemented, the vast majority of the new notes that the Bank will hold to replace its ABCP will have investment grade credit ratings, reflecting the expectation that the Bank, and other investors holding these restructured notes, can expect to maximize value of these investments over time. 

About National Bank of Canada
National Bank of Canada is an integrated group which provides comprehensive financial services to consumers, small and medium-sized enterprises and large corporations in its core market, while offering specialized services to its clients elsewhere in the world. The National Bank offers a full array of banking services, including retail, corporate and investment banking. It is an active player on international capital markets and, through its subsidiaries, is involved in securities brokerage, insurance and wealth management as well as mutual fund and retirement plan management. National Bank has more than $120 billion in assets and, together with its subsidiaries, employs 16,856 people. The Bank’s securities are listed on the Toronto Stock Exchange (NA:TSX). For more information, visit the Bank’s website atwww.nbc.ca.

Information (The telephone number provided below is for the exclusive use of journalists and other media representatives.):

Marie-Claude Lavigne
Senior Advisor, Public Relations Department
National Bank of Canada
Tel.: 514-394-6500