VANCOUVER, BRITISH COLUMBIA — The recent problems in the financial markets have led to the postponement of a merger between Credit Union Central of British Columbia and Credit Union Central of Ontario, both announced on Friday.
The transaction had been scheduled to close on Oct 1. Shareholders of the two organizations had approved the combination on June 22.
"While most conditions have been met, recent problems in the financial markets make it difficult to complete the relative valuation of each organization for the purpose of closing the transaction, the centrals said in a statement. The difficulties in valuation result from each central's investments in non-bank asset-backed commercial paper, "which has become illiquid in light of global credit conditions."
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B.C. Central holds $23 million in non-bank ABCP while Ontario Central's has $161 million. These investments do not affect the ability of the two centrals to meet their member credit unions' liquidity needs, but the current trading halt in these securities agreed to under the Montreal Proposal makes it impossible to quantify the relative value of each central with certainty, the centrals said.
The merger is expected to be complete by year-end.
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