Business
Petrolifera provides information on its short term money market investments
Petrolifera provides information on its short term money market investments.
About this update from Medexus Pharmaceuticals Inc.
[{"type":"text","content":"\n\n\n\nCALGARY, Aug. 20 /CNW/ - Petrolifera Petroleum Limited (PDP - TSX) hereby\nadvises its shareholders and capital markets on the current status of the\ncompany's exposure to short-term asset-backed security investments in Canada.\nAs at July 31, 2007 the company had approximately $37.7 million of its total\n$64.6 million in cash and cash equivalents invested in asset-backed\nsecurities. Petrolifera's cash management policy has been to invest in\nshort-term investments ("Notes") that are rated R1-High by the Dominion Bond\nRating Service ("DBRS"). This is the highest rating assigned to commercial\npaper by DBRS. Through the facilities of the money desk of its Canadian\nbanker, the company had invested $20.0 million in Series A Notes issued by\nMMAI-I Trust and $17.7 million in Series A Notes issued by Apsley Trust, for a\ntotal maturing value of $37.7 million.\n\n\nAs a result of recent disruptions in the global credit markets (and\nspecifically the market for asset-backed security investments in Canada), on\nAugust 15, 2007 $20.0 million of Series A Notes issued by MMAI-I Trust and\n$11.4 million of Series A Notes issued by Apsley Trust became due and payable,\nbut were not repaid and are currently outstanding. Petrolifera also holds\n$6.3 million of Series A Notes issued by Apsley Trust which are due and\npayable on August 31, 2007.\n\n\nPetrolifera has been monitoring and will continue to closely monitor\nCanadian short-term credit markets. The company has been repeatedly informed\nor advised that the situation which has developed is primarily related to\nliquidity concerns in respect of asset-backed securities, rather than the\ncreditworthiness of the underlying assets owned by the aforementioned trusts.\nThe company has been in discussions with its Canadian banker and\nrepresentatives of the trusts and will continue to review and assess\ndevelopments.\n\n\nOn August 16, 2007 a group of financial institutions, led by the Caisse\nde depot et placement du Quebec, announced that it had agreed in principle to\na long-term proposal and an interim agreement regarding asset backed\ncommercial paper, including the Notes issued by MMAI-I Trust and Apsley Trust.\nThe effect of this, if agreed to by the parties and Note holders would, among\nother things, be to convert the Notes into term floating rate notes ma...