Dec. 17 (Bloomberg) -- Investors holding some of the C$33 billion ($32.4 billion) in frozen Canadian commercial paper say they're fed up with another delay in the restructuring plan, though they're willing to give negotiators another six weeks to finish the task.

``It's frustrating,'' Entrée Gold Inc. Chief Executive Officer Gregory Crowe said yesterday in an interview. ``I'd like to see it resolved, but I want it resolved properly with the backing of all the banks.'' The Vancouver-based miner, which has $4 million in commercial paper, ``can afford to wait a little bit'' for a solution, Crowe said.

An investors' group led by Toronto lawyer Purdy Crawford missed its deadline for a second time on Dec. 14 to draft a deal to restructure the securities that haven't traded since mid- August. Crawford said Dec. 15 that he's ``very committed'' to getting an agreement before the end of January to restructure the debt into longer-term notes by March 14.

``Investors that I've talked to are at best disillusioned by the process and some are quite angry,'' said Colin Kilgour, president of a unit of money manager Connor, Clark & Lunn Financial Group. ``They're all fed up.''

Canada's market for commercial paper sold by non-bank dealers ground to a halt in August after Coventree Inc. and other trusts failed to renew maturing debt because investors were concerned about ties to U.S. subprime mortgages. Banks refused to provide backup financing, freezing the market and putting funds at risk of collapsing.

Foreign Banks

A group of foreign banks, Canadian lenders and pension funds led by Caisse de Depot et Placement du Quebec negotiated the so-called Montreal Proposal standstill on Aug. 16 and agreed to convert the short-term debt into longer-term notes. Crawford's committee, made up of some of the biggest holders of the frozen debt, has been working on a restructuring since September.

``The pace is unacceptable,'' said Kilgour, who's advising some companies holding the debt. ``Money and time are being burnt at a remarkable rate and there are corporate investors who were expecting their cash back in August who are still sitting on these notes and don't know what they're worth.''

Crawford's group is handling 21 trusts that hold about C$33 billion in assets, according to a statement. One fund, the C$2.1 billion Skeena Capital Trust, has already been restructured under the process and awaits investor approval.

Investors are getting frustrated, said Daryl Ching of Clarity Financial Strategy, a Toronto-based firm that advises companies on their commercial-paper investments.

Waiting Game

``Investors can't just be told every two months to wait another two months,'' he said in an interview. ``The investors are owed a lot more information than they are getting now. While this may have been acceptable back in October, it's not acceptable now.''

One reason for the delay is that Crawford's group is trying to get Canada's five biggest banks and several foreign banks to backstop the new notes, according to the Globe and Mail. Toronto-Dominion Bank, the country's second-biggest lender, said it's willing to consider measures aimed at restoring ``liquidity'' in financial markets, though it won't take on more risk.

``Our position has been that it would not be in the best interest of TD shareholders to assume incremental risk for activities in which we were not involved,'' Toronto-Dominion CEO Ed Clark said today in a statement.

More Funding

The Canadian banks have been asked to provide C$500 million each in back-up loan guarantees for the notes, after balking at requests to provide C$1 billion each, the Globe reported Dec. 15. Crawford declined to comment on the banks, in an interview.

``Substantial progress has been made and Deutsche Bank will continue to work with the group toward reaching a final agreement,'' Germany's biggest bank said in a statement. Deutsche Bank was among the banks that signed the Montreal agreement.

Crawford's group is pursuing three solutions for the commercial paper, depending on the assets backing the funds, according to a statement. The commercial paper will be swapped for new notes maturing in seven years on average, up to a maximum nine years, Crawford said. Most of the commercial paper that's been frozen matured in 30 to 90 days, to a maximum 364 days.

``There's not enough information for an investor to make an informed decision about what they want to do,'' Ching said.

Same Crossroads

Transat A.T. Inc., owner of Canada's largest charter airline, is waiting for more details before deciding what to do with its C$154.5 million in frozen commercial paper.

``We're still at the same crossroads,'' Transat Chief Financial Officer Francois Laurin said today in an interview. ``We want our money as quickly as possible, the sooner the better. But on the other end we would like a reasonable conclusion to this.''

Perimeter Financial Corp., a Toronto-based brokerage, is offering buyers and sellers a marketplace to swap the frozen debt ahead of any restructuring proposal.

``We're focusing our attention on continuing to keep our market open for people who want to trade,'' Perimeter Chief Executive Officer Doug Steiner said in an interview. ``I would suspect we will get a few more bids and offers, though probably not a lot more.''

Can't Match

Perimeter has been unable to match buyers with sellers since it began operating Nov. 14, with some offers of about 50 cents and 60 cents on the dollar.

``The common wisdom is that these things are not going to be fully valued,'' Steiner said. ``Obviously, if people are expecting to get their money back seven years from now, they'll be trading at a discount.''

The Caisse, Canada's biggest pension-fund manager, is the largest holder of non-bank issued commercial paper, with about C$13.2 billion. Other large holders include National Bank of Canada, the country's sixth-biggest, and ATB Financial, an Alberta bank.

To contact the reporter on this story: Doug Alexander in Toronto at dalexander3@bloomberg.net

Last Updated: December 17, 2007 16:53 EST