TORONTO, April 27, 2017 /CNW/ - Home Capital Group Inc.
("The Company" TSX: HCG) today announced that its subsidiary, Home
Trust, has secured a firm commitment for a $2 billion credit line from a major Canadian
institutional investor.
The Company also announced it has retained RBC Capital Markets
and BMO Capital Markets to advise on further financing and
strategic options.
The $2 billion loan facility is
secured against a portfolio of mortgages originated by Home
Trust.
Home Trust has agreed to paying a non-refundable commitment fee
of $100 million and will make an
initial draw of $1 billion. The
interest rate on outstanding balances is 10 per cent, and the
standby fee on undrawn funds is 2.5 per cent. The facility matures
in 364 days, at the option of Home Trust.
The facility, combined with Home Trust's current available
liquidity, provides the Company with access to approximately
$3.5 billion in total funding,
exceeding the amount of outstanding High Interest Savings Account
(HISA) balances.
Home Trust had liquid assets of $1.3
billion as at April 25, plus
an additional portfolio of available for sale securities totaling
approximately $200 million.
Access to these funds is intended to mitigate the impact of a
decline in Home Trust's HISA deposit balances that has occurred
over the past four weeks and that has accelerated since
April 20. The Company will work
closely with the lender to have the funds available as soon as
possible.
Home Trust expects to have a HISA balance of approximately
$814 million on Thursday, April
27, after settlement of Wednesday's transactions.
Total Guaranteed Investment Certificate deposits, including both
Oaken and broker GICs, stood at $12.98
billion as at April 25.
Home Capital also advises that the terms of the agreement will
have a material impact on earnings, and will leave the Company
unable to meet previously announced financial targets.
Home Trust's GICs and HISA deposits are eligible for Canada
Deposit Insurance Corp. coverage.
Caution Regarding Forward-looking Statements
This press release contains forward-looking information within
the meaning of applicable Canadian securities legislation. Please
refer to the Home Capital's 2016 Annual Report, available on Home
Capital's website at www.homecapital.com, and on the Canadian
Securities Administrators' website at www.sedar.com, for Home
Capital's Caution Regarding Forward-looking Statements.
About Home Capital Group Inc.
Home Capital Group Inc. is a public company, traded on the Toronto
Stock Exchange (HCG), operating through its principal subsidiary,
Home Trust Company. Home Trust is a federally regulated trust
company offering residential and non-residential mortgage lending,
securitization of insured residential mortgage products, consumer
lending and credit card services. In addition, Home Trust offers
deposits via brokers and financial planners, and through its direct
to consumer deposit brand, Oaken Financial. Home Trust also
conducts business through its wholly owned subsidiary, Home Bank.
Licensed to conduct business across Canada, Home Trust has offices in Ontario, Alberta, British
Columbia, Nova Scotia,
Quebec and Manitoba.
SOURCE Home Capital Group Inc.