TORONTO, Jan 30 (Reuters) - Canaccord Capital Inc CCI.TO said on Friday it expects to book further charges as the investment dealer also announced the completion of its repurchase program for restructured third-party asset backed commercial paper.
Additional out-of-pocket charges will result in an increase of its Canaccord relief program accounting provision by up to C$2.7 million ($2.2 million) before tax, the company said.
The Canaccord program repurchases, at par value, up to C$152 million of restructured third-party ABCP from eligible clients.
It has also purchased MAV 2, Class 15 notes, with a book value of C$9.5 million, which will be added to the it treasury position of C$29.8 million. Further charges to this aggregate treasury position may be needed as management estimates the fair value of its ABCP holdings, the company said.
“We are disappointed by the necessity of additional charges for our firm,” said Paul Reynolds, president and chief executive officer at Canaccord.
Earlier this month, a plan to restructure billions of dollars worth of Canadian nonbank asset-backed commercial paper was implemented, allowing small individual investors to get their money back. The market had seized up in 2007 amid concerns about the worsening U.S. subprime mortgage market, leaving ABCP investors unable to sell or redeem the paper.
The company’s shares were halted on the Toronto Stock Exchange ahead of the announcement. They were last at C$4.52, up 7 Canadian cents.
Canaccord is scheduled to announce its third-quarter results on Feb. 12.
$1=$1.23 Canadian Reporting by Ka Yan Ng; editing by Rob Wilson