November 10, 2008 / 11:48 PM / 9 years ago

DundeeWealth posts smaller loss, writes down asset-backed CP

TORONTO, Nov 10 (Reuters) - Canadian money manager DundeeWealth Inc (DW.TO) said on Monday that its loss narrowed in the third quarter, but global financial market declines hurt revenues and it further trimmed the estimated fair value of certain asset-backed commercial paper holdings.

DundeeWealth said it lost C$26.6 million ($22.35 million) in the three months ended Sept. 30, or 19 Canadian cents a diluted share. That was down from a loss of C$121.4 million, or C$1.00 a share, in the same 2007 period, when the company sold its Dundee Bank of Canada unit to Bank of Nova Scotia (BNS.TO).

In the latest period, DundeeWealth said it took a further C$37.9 million reduction on the fair value of its asset-backed commercial paper portfolio. The investments have been caught up in a 15-month-long attempt to restructure this part of the Canadian credit market, which was worth a total of C$32 billion before it seized up in August 2007.

“The additional fair value adjustment resulted from a detailed analysis of the current market, including significant increases in credit spreads, and the continued lack of liquidity in the ABCP market,” DundeeWealth said in its management discussion and analysis.

So far, the company has written down by 55 percent the original C$379.4 million par value of its ABCP holdings.

DundeeWealth also said it expected annual cost savings of about C$30 million, starting next year, as a result of cutting staff by about 250 people over the course of 2008.

The company, which owns the Dynamic Funds family of mutual funds, said that assets under management rose 13 percent to C$30.8 billion, due in part to two recent acquisitions.

Revenues from capital markets activities in its Dundee Securities Corp unit plunged more than 40 percent in the quarter, and it posted a C$7 million trading loss.

DundeeWealth shares have fallen 64 percent in 2008, and it has been steadily buying back shares this year.

It spent C$15.3 million to repurchase almost 1.2 million shares in the first nine months, and a further C$7.5 million to buy back 868,900 more shares after the end of September, according to the management discussion document.

On the Toronto Stock Exchange, DundeeWealth shares closed at C$6.43 a share on Monday, up 2.9 percent.

The company is controlled by Dundee Corp DCa.TO. ($1=$1.19 Canadian) (Reporting by Lynne Olver; Editing by Phil Berlowitz)

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