Strategem Capital Corporation

Strategem Capital Corporation

November 28, 2008 20:29 ET

Strategem Capital Corporation: Additional ABCP Write-Down

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 28, 2008) - Strategem Capital Corporation ("Strategem" or the "Company") (TSX VENTURE:SGE) today announced that it had recorded an additional write-down on its Asset-Backed Commercial Paper ("ABCP") holdings in the quarter ended September 30, 2008.

The Company owns ABCP with a face value of $6,364,224. Management has estimated the fair value of the Company's ABCP to be $1,239,277 at September 30, 2008. Based on this valuation, the Company recorded a write-down of $2,323,960 in the quarter ended September 30, 2008, in addition to a charge of $2,800,987 recorded in the fiscal year ended December 31, 2007.

When the ABCP matured but was not redeemed in 2007, it became the subject of an ongoing restructuring process intended to replace the ABCP with long term asset backed securities ("New Notes"). To arrive at its estimate of the fair value of the ABCP, the Company uses market inputs to determine the price a prospective investor would pay for the New Notes. This value was then probability weighted based on estimate that a successful restructuring is 40% likely with a 60% likeliness of failure.

The assumptions which have the most significant impact on the Company's estimates of fair value and impairment include: whether or not the restructuring is successful and the yield required by prospective investors. The value the Company ultimately receives for its ABCP assets may differ significantly from Company estimates.

The Company has adequate working capital to meet its operational needs for the coming year. The company does not expect that it will require additional financing.

About Strategem Capital

Strategem Capital Corporation is a publicly-traded merchant bank specializing in the development of emerging companies with above average growth potential. The current focus is on companies that explore and develop precious or base metals.

This release and prior releases are available on the Company's Internet web site located at


Kenneth W. Morgan, CA, CPA, President, CEO and Director

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

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