An Ontario judge has approved a plan to restructure $32 billion in assets that have been frozen since last August, a major step in what has been Canada’s largest debt restructuring.
Canada’s market involving nonbank asset-backed commercial paper, or ABCP, froze last August after news of defaults on subprime mortgages in the United States. Investors became concerned their assets would be affected by the U.S. crisis and stopped buying ABCP. They demanded repayment, but new buyers couldn’t be found, and the ABPC could not be repaid.
