Flexible parameters enable participants to access Facility until March 2010
Montreal, Quebec, September 17, 2009 - The Business Development Bank of Canada (BDC) today announced revised parameters for the Canadian Secured Credit Facility (CSCF).
In consultation with the Departments of Finance and Industry, BDC has determined that uncommitted CSCF funds will be offered on a "first-come, first-served" basis until March 31, 2010 to provide continued support for participants in the auto and equipment financing sectors. The new parameters are based on information from the price-discovery process BDC undertook in August, as well as other feedback from participants since the program was announced.
Previously, CSCF commitments were available only to companies that participated in a price-discovery process. Those that participated in August will be the first to receive commitments; other companies may apply should the need arise. The facility is offered to all participants at 1.50 per cent (150 basis points) above Government of Canada funding costs.
"Since the initial parameters of the Facility were established, there has been a significant reduction in credit spreads in the ABS market", explained Jean-René Halde, BDC's President and Chief Executive Officer. "These new parameters and pricing were developed in response to recent market trends. They underscore BDC's commitment to play a positive role in supporting the auto and equipment financing sectors."
"I am pleased the CSCF is improving access to credit to a broad range of lenders across Canada," said the Honourable Minister of Finance, Jim Flaherty. "The changes to the program announced today will further enhance the availability of financing for the sale of vehicles and equipment, supporting key manufacturers and Canada's economic recovery."
The Honourable Tony Clement, Minister of Industry, said he is encouraged by recent improvements in the market for asset-backed securities. "I am pleased the CSCF is helping support access to financing for the purchase of vehicles and equipment," Minister Clement said. "This is just one of the many ways in which BDC is helping Canadian businesses weather the global economic downturn."A
total of $12 billion allocated in the 2009 federal budget to the CSCF will be made available to large and small companies alike. Large participants need a minimum of $300 million per transaction. Small participants can qualify with a minimum transaction size of $100 million. All securities purchased require two AAA ratings.
Consult the changes to the Terms & Conditions of the CSCF and other details. Interested financial institutions who meet the eligibility requirements of the CSCF should contact BDC at CSCF@bdc.ca.
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