Home Major Group Inc. has secured a $500-million standby credit line from two unnamed Canadian banks to make good on its more costly emergency funding facility from Warren Buffett’s Berkshire Hathaway Inc.
The Toronto-based additional mortgage lender says its subsidiary Home Trust Company has inked a exactly of commitment from two Canadian Schedule 1 banks for the two-year secured cable of credit facility.
Home Capital’s chief financial officer Brad Kotush phrases this new credit line has a lower aggregate cost than its prevalent $2-billion funding facility, which matures at the end of June.
Last June, Buffett’s investment definite bought a stake in Home Capital Group and provided its subsidiary with a $2-billion procedure of credit.
The credit line gave the Toronto-based lender some much needed liquidity after it tete—tete a run on deposits, amid allegations of misleading disclosure to investors.
Kotush symbolizes Home Capital has sufficient liquidity and has significantly reduced its reliance on demand puts, and does not intend to draw on the new, cheaper credit facility