Canadian group in ABCP revamp deal

``The majority of the paper held in 20 highly-leveraged trusts, or conduits, will be pooled and converted into floating-rate notes with maturities based on the underlying assets. The average maturity of these notes is expected to be seven years.... Purdy Crawford, chairman of a committee representing major investors, said on Sunday night that while the deal might mean “some diminution” in value, “the restructuring gives investors a reasonable expectation of receiving the full par value over time”.'' -- That'll be the day.

This is a fairly "hail mary" style bailout. Lots of renegotiation; a $14 B credit facility in the case of further margin calls, pooling and conversion to variable rate, and out pops a `AAA' rating (were you surprised?). The banks are certainly putting everything they've got into bailing this paper out. Our question is what happens if more and not less pressure is gradually put on the participants of this deal, i.e. if asset values refuse to come back up, and general cash flows diminish? Are we going to continue to play this game of allowing the rating agencies to hold their noses and pretend this sh** doesn't smell---until we're all knee-deep in it?