Canada’s Home Capital draws down further on credit line

May 23 Canada’s biggest non-bank lender
Home Capital said on Tuesday that it had drawn down an
additional C$250 million ($185 million) from a high interest
credit line to meet a repayment on its debt due on Wednesday.

Home Capital said in a statement that it had now drawn down
C$1.65 billion from a C$2 billion facility it agreed last month
with the Healthcare of Ontario Pension Plan (HOOPP).

Director Alan Hibben had told Reuters in an interview
earlier this month that the company might need to draw down
further on the funds to pay back an outstanding C$325 million
bond on its maturity date of May 24.

Depositors have withdrawn more than 90 percent of funds from
Home Capital’s high interest savings accounts since March 27,
when the company terminated the employment of former Chief
Executive Martin Reid.

Withdrawals accelerated after April 19, when the Ontario
Securities Commission accused Home Capital of making misleading
statements to investors about its mortgage underwriting
business. The company has said the accusations are without
merit.

Home Capital’s high interest savings deposits had fallen to
about C$115 million at the end of May 22, from just under C$2
billion on March 27, the company said on Tuesday.

Home Capital provides loans to borrowers, such as
self-employed workers or newcomers to Canada, who may not meet
the strict criteria of the country’s biggest banks.

The company said it had access to C$1.46 billion in
available liquidity and credit capacity as of Monday, unchanged
from Friday.

($1 = 1.3511 Canadian dollars)
(Reporting by Matt Scuffham; Editing by Toni Reinhold)


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