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(June 19, 2008) A group of primarily corporate noteholders is appealing the recent decision by an Ontario Superior Court judge to approve the restructuring deal of $32 billion of frozen asset-backed commercial paper.

A joint notice of motion for leave to appeal and stay of execution has been filed in an Ontario Court of Appeal by a group of disgruntled noteholders. The appellants, including Canadian companies like Air Transat and the Jean Coutu Group, are not satisfied with Ontario Superior Court Justice Colin Campbell’s reasoning for approving the ABCP deal on June 5.

The appeal is already being slammed by the Pan-Canadian Investors Committee, which spearheaded the restructuring deal.

“The plan has been developed over nearly ten months and reflects compromise by all parties,” says Purdy Crawford, chair of the investors committee. “We regret that a few noteholders are seeking to prevent the implementation of a plan which the Ontario Superior Court has agreed is fair and reasonable and meets the criteria of the Companies’ Creditors Arrangement Act.”

The Ontario Court of Appeal will hear the matter on June 25 and 26, 2008. The committee will ask the Court of Appeal to dismiss the proceedings and to leave in place approval of the restructuring plan that the overwhelming majority of affected noteholders voted in favour of in April.

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Raymond James names co-president, co-CEO

(June 19, 2008) Raymond James Ltd. has announced the appointment of Paul Allison as co-president and co-chief executive officer, alongside the current president and CEO, Peter Bailey, effective August 4.

“Paul is widely respected and admired across the investment industry in Canada,” says Bailey. “Working together with our existing strong team of professionals, we believe Paul’s addition will make an immediate impact in accelerating our growth efforts in winning mandates and building client relationships in all of our businesses, and especially within capital markets.”

Allison has more than 20 years of senior capital markets experience, having most recently served as executive vice-president and vice-chairman at Merrill Lynch Canada.

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Scotia confirms commodities jumped in May

(June 19, 2008) Anyone with a car — or a stomach for that matter — probably already suspected it, but Scotiabank has revealed that commodity prices soared in May.

Scotiabank’s Commodity Price Index climbed 3.9% in May alone, setting a fifth consecutive record. The index measures virtually every major commodity that Canada exports, 32 in all, including oil and gas, metals, lumber and agricultural products.

The oil and gas segment led the way — no surprise there — rising a whopping 10.5% in the month, and almost 66% year over year. Natural gas, which had been the laggard in the sector, hit $10.60 U.S. per thousand cubic feet in May, while West Texas Intermediate crude spiked to $139.12 US per barrel. Since the end of May, gas has continued to climb, topping $13.25 on NYMEX.

“While [Saudi Arabia] will reportedly boost output temporarily to cool prices, this development does not address the underlying reason for record oil prices: limited exploration access by oil companies, particularly foreign oil companies, in many areas of the world, including Russia, contributing to only slow new field development outside of OPEC,” said Patricia Mohr, vice-president, economics, and commodity market specialist at Scotiabank.

On the mineral market, base metals continued to lose some ground, as global economic growth slowed. The price of potash, on the other hand, showed no sign of slowing down, as global demand for fertilizers remained strong.

The agricultural sector of the index slipped in May but remained 40% higher than in May 2007.

“U.S. corn inventories at the end of the 2008–09 crop year will be cut in half, possibly more, increasing upward pressure on ethanol prices for gasoline,” said Mohr. “The spring planting season in Canada has also been unusually cold, dimming the crop outlook.”

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Alberta companies optimistic for Q3

(June 19, 2008) The Alberta business community is riding a wave of optimism, according to new data from ATB Financial and the Western Centre for Economic Research.

The ATB Financial Business Sentiments Index clocked in at 141.1 for opinions on the third quarter of 2008, an increase from 130.5 for the second quarter. Anything above 100 indicates optimism.

“Coming out of 2007 and early this year, business attitudes were decidedly less cheerful. But the ‘feel good’ economy seems to be making a comeback in Alberta,” says Todd Hirsch, ATB Financial’s senior economist. “Most remarkably, business sentiment in the province appears to be improving in an environment where sentiment throughout the U.S. and much of Central Canada is deteriorating.”

Not surprisingly, much of that ebullience is accredited to the most recent run-up in the price of oil and natural gas. That has, in turn, fuelled growth in the construction and transportation sectors.

Sentiment in the manufacturing and wholesale sectors slipped a little, while the professional/technical sector was essentially unchanged.

Optimism was highest in the northern half of Alberta, the locus of the oil sands projects, with a reading of 148.7, while the reading for the south end was just 133.5. The overall reading of 141.1 is down from a strong reading of 152.5 in the comparable third quarter of 2007.

(06/19/08)