DBRS Maintains CFI Trust Under Review with Developing Implications

DBRS has today maintained the rating of the Series 2005-1, Class A-1 Notes issued by CFI Trust (the Trust) Under Review with Developing Implications where it was placed on September 2, 2008, and subsequently maintained on September 5, 2008. The Under Review with Developing Implications is based on the requirement of CFI Trust to meet the deadline of December 31, 2008, with respect to complying with DBRS’s “Commentary on Criteria to Establish a Canadian Asset-Backed Commercial Paper Conduit,” published January 26, 2006.

Today’s action follows CFI Trust’s partial refinancing of the $200 million principal amount of the floating-rate receivables-backed Series 2005-1, Class A-1 Notes and the $6 million principal amount of the 4.46% receivables-backed Series 2005-1, Class B Notes (collectively, the Series 2005 Notes), which were issued by the Trust in August 2005 with an Expected Repayment Date of September 15, 2008. As announced by CFI Trust on September 16, 2008, full repayment of the Series 2005 Notes did not occur. The Trust has finalized its plans to partially refinance the Series 2005 Notes with newly issued Series 2008-1, Class A-1 Notes, to which DBRS has assigned a rating of AAA; the Series 2008-1, Class A-1 Notes are supported by the issuance of Series 2008-1, Class B Notes. The failure to fully repay the Series 2005 Notes resulted in a Monthly Pay Event.

As noted by CFI Trust, the Monthly Pay Event is not considered to be an Event of Default under the Trust's Series 2005 Notes supplement to its trust indenture (the Series 2005-1 Supplement) as the Series 2005 Notes have a Legal Final Maturity Date of September 15, 2013. However, the Monthly Pay Event under the Series 2005-1 Supplement results in an amortization of the remaining Series 2005-1 Notes based on a predetermined schedule that has been provided to the Series 2005-1 Noteholders. Failure to pay down the balance of the Series 2005-1 Notes to a minimum monthly level in accordance with the amortization schedules provided to the noteholders will be an Event of Default with respect to the Notes. No new originations of assets are permitted while the Monthly Pay Event continues.

DBRS will continue to actively monitor the performance on the specific pools of assets as they relate to the ability to fully repay the outstanding notes issued by the Trust. Further rating action will depend on the performance of the pool of assets to repay the outstanding notes and the ability of CFI Trust to meet the deadline of December 31, 2008, with respect to complying with DBRS’s “Commentary on Criteria to Establish a Canadian Asset-Backed Commercial Paper Conduit,” published January 26, 2006.

Note:
All figures are in Canadian dollars unless otherwise noted.