On August 19, 2009, Export Development Canada announced that it is joining with Brookfield Asset Management Inc. (TSX: BAM), Canadian Imperial Bank of Commerce (TSX: CM-T) and Sun Life Financial Inc. (TSX: SLF-T) to launch a C$1 billion fund.
The fund will provide debtor-in-possession (DIP) financing, which are loans that assist bankrupt companies that are seeking to restructure during their restructurings. Such financing had become scarce earlier in 2009, as many traditional providers, including hedge funds and finance companies, pulled back or pulled out. The lack of DIP funding threatened to leave companies that could have restructured with no choice but to liquidate for lack of operating funds.
The fund will look at deals that require at least C$20 million of financing. Export Development Canada will contribute C$450 million and has indicated that if the fund increases in size, it may put up as much as C$1 billion. Brookfield will contribute at least C$100 million and act as manager. CIBC and Sun Life Financial will also invest.
Further information is found on globeandmail.com.