{"id":9870,"date":"2018-05-16T14:37:41","date_gmt":"2018-05-16T18:37:41","guid":{"rendered":"http:\/\/lifeinsurance-orleans.ca\/Life-Insurance-Blog\/?guid=40ab6759b5119dddd369fd347f9d849f"},"modified":"2018-05-16T14:37:41","modified_gmt":"2018-05-16T18:37:41","slug":"home-capital-receives-new-credit-line-from-two-canadian-banks-as-buffett-backing-expires","status":"publish","type":"post","link":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/2018\/05\/16\/home-capital-receives-new-credit-line-from-two-canadian-banks-as-buffett-backing-expires\/","title":{"rendered":"Home Capital receives new credit line from two Canadian banks as Buffett backing expires"},"content":{"rendered":"<p>Home Capital Group Inc., the Canadian alternative lender that was bailed out by Warren Buffett&#8217;s Berkshire Hathaway Inc., received a commitment for a new credit line from two banks as backing from the billionaire investor expires next month.<\/p>\n<p>The two-year $500 million (US$389 million) loan from two Canadian banks to Home Trust Company will replace a $2 billion (US$1.6 billion) credit line from Berkshire, Home Capital said in a statement Wednesday. Buffett stepped in to backstop Toronto-based Home Capital last year after it was found by regulators to have improperly disclosed falsified home-loan applications and short-sellers targeted the stock.<\/p>\n<p>The new loan results in a lower aggregate cost than the existing facility, Home Capital&#8217;s Chief Financial Officer Brad Kotush said in a statement. &#8220;We have significantly reduced our reliance on demand deposits for funding.&#8221;<\/p>\n<ul class=\"related_links\">\n<li><a href=\"http:\/\/business.financialpost.com\/news\/fp-street\/home-capital-predicts-record-surge-in-mortgage-renewals-as-it-reports-drop-in-profit\">Home Capital predicts record surge in mortgage renewals as it reports drop in profit<\/a><\/li>\n<li><a href=\"http:\/\/business.financialpost.com\/news\/fp-street\/mortgage-fraud-prompts-sp-to-lower-canada-bank-risk-metric\">Evidence of mortgage fraud in Canada raises red flag at credit rating giant<\/a><\/li>\n<li><a href=\"http:\/\/business.financialpost.com\/pmn\/business-pmn\/home-capital-group-says-new-mortgage-rules-have-clients-migrating-from-big-banks\">Home Capital Group says new mortgage rules have clients migrating from big banks<\/a><\/li>\n<\/ul>\n<p>The terms of the new line of credit includes a 0.75 per cent upfront commitment fee, 0.6 per cent annual standby charge on any unused portion and an interest rate on the drawn portion equal to three-month the Canadian Deposit Offered Rate plus 150 basis points. Three-month CDOR stands at about 1.75 per cent so the interest rate would be about 3.25 per cent.<\/p>\n<p>The previous credit agreement from Berkshire carried about a 9 per cent interest rate on outstanding balances and 1 per cent on the undrawn funds.<\/p>\n<p>Berkshire didn&#8217;t immediately respond to a request for comment left with an assistant.<\/p>\n<p>Home Capital shares have risen 59 per cent in the past 12 months to $14.13. Berkshire holds about a 20 per cent stake, according to data compiled by Bloomberg.<\/p>\n<p><a href=\"http:\/\/www.bloomberg.com\/\"><em>Bloomberg.com<\/em><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The two-year $500 million from the Canadian banks replaces a $2 billion credit line from Berkshire Hathaway<\/p>\n","protected":false},"author":578,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/9870"}],"collection":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/users\/578"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/comments?post=9870"}],"version-history":[{"count":1,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/9870\/revisions"}],"predecessor-version":[{"id":9871,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/9870\/revisions\/9871"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=9870"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=9870"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=9870"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}