Foreign banks play ball on ABCP

The $32-billion restructuring of Canada's asset-backed commercial paper market could be back on track by the middle of this week after a group of key foreign banks backed down on a threat to scuttle the deal rather than bow to concessions demanded by a judge.

Germany's Deutsche Bank AG and other big foreign banks, whose co-operation is crucial for the plan to swap the frozen ABCP for new bonds, are in talks to create a system by which investors stuck with ABCP can try to bring fraud claims, sources said. Allowing fraud claims is a big concession from the banks, which had previously said they would back the plan only if they had broad legal immunity, including from allegations of fraud.