Welcome to the major leagues of debt. Collateralized debt obligations, almost always referred to as a CDOs, are horrendously complicated deals that often leave anyone without a MBA wondering what was put into these CDOs.

The first thing to understand about bonds, (aka debt) is that bonds are often backed by something else. Think about your home mortgage. If you don't pay your mortgage, the bank can take the house. You end up homeless, and the bank sells the house to pay off the rest of that mortgage. There is something "backing" that mortgage; something lender can fall back on, if you don't pay your bills like a good human being. That's called collateral.

CDOs are one flavor of an entire sector of investing called structured finance, and they are also backed. CDOs, in the simplest concept, are just bonds backed by something else. In most cases, a CDO is backed by a collection of various types of debt. CDOs can be home mortgages, or other types of debt like credit cards, auto loans, and personal loans. Most of these types of debt are usually considered a bit more risky and they don't have the backing that a home loan does. So, if you think it through, you can imagine that CDOs are usually considered a risky investment.

To take a step further, understand that CDOs have multiple flavors within each CDO. These flavors are called tranches. If you've taken French, you might recognize the word, it means "slice" or "portion." Each slice of that CDO you invest in is a little different and carries different amounts of risk.

You could invest in the lowest risk tranche of the CDO, which would provide you lower risk. But, you don't get a good return on that investment. Or, you can be the heroic adventurer of bonds and invest in the lowest-grade tranche of the CDO. You'll make an amazing return, but if the economy even looks at you wrong, you might lose the entire investment.

CDOs aren¿t easy, and are almost always invested in by mutual funds, insurance companies and hedge funds. As an individual investor, you will probably not come across a CDO you can participate in.

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Tuesday, August 05, 2008

CAE to acquire Bell Aliant's xwave Defence, Security and Aerospace business

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Comtex

MONTREAL, QUEBEC AND HALIFAX, NOVA SCOTIA, Aug 05, 2008 (MARKET WIRE via COMTEX) ----CAE (TSX: CAE)(NYSE: CGT) and Bell Aliant Regional Communications Income Fund ("Bell Aliant") (TSX: BA.UN) today announced that CAE has signed an asset purchase agreement to acquire Bell Aliant's Defence, Security and Aerospace (DSA) business unit, currently operated by the xwave division of Bell Aliant Regional Communications, Limited Partnership. The purchase price paid on closing will be C$15.1 million with an additional C$11.0 million to be paid contingent upon the occurrence of certain events for a potential total purchase price of $26.1 million.

xwave's DSA team supplies real-time software and systems for simulation, training, defence, and integrated lifecycle information management for the aerospace and defence industries. The division employs approximately 200 people in Ottawa, Ontario; Halifax, Nova Scotia; and Esquimalt, British Columbia.

"We are happy to expand CAE's defence capabilities and footprint across Canada, particularly in Ottawa, Atlantic Canada and British Columbia," said Marc Parent, CAE's Group President, Simulation Products and Military Training & Services. "xwave DSA is already a valued partner of CAE on several programs. By joining CAE and our CAE Professional Services team, xwave's DSA professionals will provide us with a portfolio of complementary capabilities, including systems integration that will enhance CAE's ability to serve Canada as well as the global defence and homeland security markets."

Over the past year, Bell Aliant conducted a strategic review of its DSA business and concluded that to further grow the business, it should be operated by an organization that supports large scale, multi-year and international projects in this sector.

"I am pleased that CAE, a Canadian-based company and world leader in the defence and civil aviation industries, will be leading our DSA business through the next phase of its growth," said Stephen Wetmore, President and CEO of Bell Aliant. "We look forward to working with CAE, our employees and clients through this transition."

This acquisition is an important step in CAE's strategy to expand the use of modelling and simulation throughout the defence systems lifecycle. xwave's DSA unit offers a suite of training products focused on rear crew trainers and mission rehearsal systems that will further enhance CAE's military training and services offerings. The acquisition will also allow CAE to add new customers and capabilities in the electronic warfare market, the land command and control market, and significantly enhance its presence in the C4ISR (command, control, communications, computers, intelligence, surveillance and reconnaissance) domain.

Some of the key programs involving xwave's DSA include a range of air, land and sea programs in Canada, such as the Maritime Helicopter Program, where DSA is providing lifecycle support capabilities. In addition, the DSA team's electronic warfare technology is currently used by Canadian troops in Afghanistan. The xwave DSA team is also part of the Lockheed Martin team pursuing the Canadian Navy's Halifax Class Modernization Program.

The transaction is subject to customary closing conditions and is expected to close by the end of the calendar year.

Caution Concerning Forward-Looking Statements

This news release contains forward-looking statements relating to the proposed sale of Bell Aliant's xwave Defence, Security and Aerospace business unit to CAE. Such statements are made as of the date of this release and are therefore subject to change after that date. These statements are also subject to important known and unknown risks, assumptions, uncertainties and other factors that may cause actual events, results, performance or achievements to differ materially from those expressed in the forward-looking statements. The timing and completion of the proposed sale transaction is subject to each of the parties fulfilling their commitments under the transaction, as well as a number of other terms and conditions, some of which may be outside of the control of the parties. Therefore it cannot be guaranteed that any forward-looking statement will materialize. Bell Aliant and CAE assume no responsibility for the accuracy and completeness of the forward-looking statements and, except as may be required by applicable law, disclaim any intention and assume no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. Readers should not place undue reliance on any forward-looking statements.

About Bell Aliant

Bell Aliant (TSX: BA.UN) is one of North America's largest regional communications providers. Through its operating entities it serves customers in six Canadian provinces with innovative information, communication and technology services, including voice, data, Internet, video and value-added business solutions. Through its xwave offices, Bell Aliant also provides IT professional services in Canada and the US. Bell Aliant's 10,000 employees are committed to deliver the highest quality of customer service, choice and convenience.

About xwave

xwave, a division of Bell Aliant, is a full-service business-solutions provider that serves clients through systems integration, infrastructure services, and advanced technology solutions. These areas offer clients a broad delivery capability: xwave plans, designs, builds and operates complete information and communications technology (ICT) solutions that meet business-process needs and are designed to deliver a measurable return on technology investments. With almost $300 million in revenues and 1,500 people, xwave is one of the largest business-solutions organizations in Canada, with locations in St. John's, Halifax, Moncton, Saint John, Fredericton, Charlottetown, Summerside, Montreal, Ottawa, Toronto, and New England. More information can be found at www.xwave.com

About CAE

CAE (TSX: CAE)(NYSE: CGT) is a world leader in providing simulation and modelling technologies and integrated training solutions for the civil aviation industry and defence forces around the globe. With annual revenues exceeding C$1.4 billion, CAE employs approximately 7,000 people at more than 75 sites and training locations in 20 countries. We have the largest installed base of civil and military full-flight simulators and training devices. Through our global network of 27 civil aviation and military training centres, we train more than 75,000 crewmembers yearly. We also offer modelling and simulation software to various market segments and, through CAE's professional services division, we assist customers with a wide range of simulation-based needs. www.cae.com

 Contacts: Media relations: CAE Nathalie
   Bourque Vice President, Public Affairs and Global Communications +1-514-734-5788 nathalie.bourque@cae.com Bell Aliant Alyson
   Queen Public Affairs 902-487-5653 alyson.queen@bell.aliant.ca Investor relations: CAE Andrew Arnovitz Vice President, Investor
   Relations and Strategy +1-514-734-5760 andrew.arnovitz@cae.com Bell Aliant Zeda Redden Investor Relations 902-487-5726 zeda.redden@bell.aliant.ca

SOURCE: CAE Inc. and Bell Aliant

mailto:nathalie.bourque@cae.com mailto:alyson.queen@bell.aliant.ca mailto:andrew.arnovitz@cae.com
   mailto:zeda.redden@bell.aliant.ca

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