Strategem Capital Corporation
TSX VENTURE : SGE

Strategem Capital Corporation

October 01, 2009 17:38 ET

Strategem Sells ABCP and Buys Fund Units

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 1, 2009) - Strategem Capital Corporation ("Strategem" or "the Company") (TSX VENTURE:SGE) announced today that is has sold 100% of its Canadian Asset Backed Commercial Paper ("ABCP") for proceeds of CDN $1,884,993 and purchased units in a managed fund which will provide similar exposure to the ABCP market. The sale price represents $0.40 per $1.00 of face value of the MAV 2 A1 notes, and $0.28 per $1.00 for the A2 notes.

The Company paid CDN $2,340,000 for 234,000 units of the Absolute Core Return Fund, managed by KCS Fund Strategies Inc., a boutique investment management company that is also located in Vancouver, B.C. The Fund currently has approximately 80% of its assets invested in a portfolio of various classes of the restructured ABCP including MAV 2 A1 and A2 notes. The balance of its assets are invested in publicly listed securities.

By selling its ABCP holdings and buying fund units, Strategem retains similar exposure to the ABCP market, and also benefits from a fund management team with experience in structured finance.

Strategem held CDN $6.5 million of ABCP in 2007 when the products matured but were not redeemed. The ABCP then became the subject of a continuing restructuring process which eventually replaced the ABCP with restructured notes in 2009. Strategem has recorded a series of write-downs on the ABCP since 2007 and at June 30, 2009 valued its ABCP holdings at CDN $1,303,861.

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 www.strategemcapital.com.

BY ORDER OF THE BOARD OF DIRECTORS

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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