There is more trouble at Coventree Inc. , the firm at the epicenter of the debt crunch in Canada and another company that has bought debt repackaged and sold by the structured finance specialist is also sounding alarms. Redcorp Ventures Ltd. , a Vancouver mineral exploration and development company, issued a statement Thursday morning disclosing that fully $102.2-million of its approximately $239.8-million in cash investments is tied up in A notes issued by five of the nine trusts Coventree manages. And which bank recomended the trusts?
Redcorp also noted that that it had invested in the trusts at the recommendation of its bank, HSBC Bank Canada. HSBC North America oversees HSBC operations in the United States and Canada. The unit also controls HSBC Finance Corporation which is the former Household International. At least one analyst put HSBC Finance at the center of subprime problems.