Briefly:

TD Asset Management has announced plans to terminate three mutual funds, citing reduced investment opportunities and decreased client demand. The funds that will be terminated are:

• TD Income Trust Capital Yield Fund • TD Private Income Trust Fund • TD Income Trust Pool

The funds will cease offering units for purchase effective May 29, 2009 and will be terminated by July 31, 2009. Unitholders can switch their holdings in the funds for settlement on or prior the July 31, 2009 termination date. There will be no fees or charges applied to unitholders on redemption of their units.

Unitholders will be contacted and provided with more information regarding the termination.

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Manulife to raise $1 billion in note offering

Manulife Financial plans to issue $1 billion principal amount of medium term notes, in an effort to shore up the firm’s balance sheet.

The five-year notes are expected to be issued on June 2, 2009 and will pay a fixed rate of 4.896%. As a result, the notes are priced at a spread of 230 basis points over the five-year Government of Canada Bond.

As unsecured obligations of the Company, the notes will rank equally with all other unsecured indebtedness of Manulife that is not subordinated.

The proceeds will be used to reduce the amounts outstanding under Manulife’s credit facility with Canadian chartered banks and for general corporate purposes.

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DBRS cuts GM rating

The long-term ratings of General Motors have been downgraded from CC to C by the DBRS, following the automaker’s announcement that its debt exchange offers were not consummated by the May 26, 2009 expiry date.

A minimum tender condition of 90% of the aggregate principal of outstanding notes was required to be satisfied by this date.

DBRS said the passing of the expiration date has increased the likelihood that GM will file for Chapter 11 bankruptcy protection in the United States on or prior to June 1, 2009.

The ratings agency says the diversity and complexity of GM’s operations and stakeholders poses a challenge and decreases the likelihood of an expedited bankruptcy process. By comparison, rival Chrysler could emerge from bankruptcy protection in as little as 60 days.

GM’s board of directors will be meeting to discuss the company’s next step. The ratings of GM remain under review with negative implications.

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U.S. banking group opposes single regulator

The Independent Community Bankers of America (ICBA) has come out swinging, following reports that the U.S. government planned to create a single regulator for the U.S. banking system.

Camden R. Fine, president and CEO of the ICBA said a single banking regulator “is a flawed approach that would ultimately disadvantage our nation’s more than 8,000 community banks and the cities, towns and rural areas across America which they serve.”

In place of a single regulator, the ICBA endorses a federal bank regulatory approach that provides balance and perspective through multiple agencies and is insulated from political pressures.

The benefits of a dual-banking system, according to the ICBA, include: creating a diverse group of financial institutions, recognizing the role that complexity and size play in the process, and providing consumers with options.

“Multiple regulators serve as a check and balance over the use (and sometimes the abuse) of power,” says Fine. “The creation of a single regulator is both dangerous and shortsighted. We should no more eliminate the checks and balances in the current bank regulatory system than eliminate the multiple branches of government that are the foundation of our country.”

(05/29/09)

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.