Ottawa - While the Canadian economy is beginning to recover from one of the worst recessions since the Second World War, many of our companies are still struggling to make ends meet.

This is why EDC is partnering with Brookfield Asset Management Inc., a global asset management company, to establish a $1-billion Debtor-in-Possession (DIP) Fund to help Canadian corporations undergoing restructuring during the credit crunch.

The Fund, which extends credit to borrowers, gives companies the necessary liquidity to operate their businesses while they reorganize their operations in an effort to become viable again. It will help them in the recovery process by giving them access to credit during a critical time of financial reorganization, when they need it most.

The availability of DIP financing is important at all times, but it is particularly important during this challenging period to help companies avoid prematurely liquidating when they can restructure their arrangements instead.

This new partnership with Brookfield builds on EDC's commitment to help Canadian companies during the credit crunch, by working with other financial institutions to further assist even more businesses. This is a key aspect of EDC's strategy - complementing the private sector in a way that makes it easier for companies to access credit when they need it most.

EDC played a lead role in structuring the Fund and is the largest investor with an initial participation of $450 million, which has the potential to be increased up to $1 billion if Brookfield is successful in attracting more investors to grow the size of the Fund. Our corporation was an important initial source of lending capacity that will allow us to be able to approach others and leverage other capacity into the Fund.

Brookfield has committed to provide 10 per cent of the Fund's capital on a subordinated basis and will act as the Fund Manager by identifying and evaluating investment opportunities and managing the loans after signing. The Fund also has the backing of Canadian Imperial Bank of Commerce and Sun Life Financial.

The Fund will be a welcomed and significant player in the DIP/rescue financing market in Canada because many traditional DIP lenders have seen their balance sheets contract due to the credit crisis.

As we begin the road to recovery, this Fund will help Canadian companies gain access to credit when it's most needed, so they can focus on rebuilding and thriving in months and years ahead.