TORONTO - Home Capital Group Inc. (TSX:HCG) says its Home Trust subsidiary has secured a firm commitment for a $2-billion credit line from an unidentified Canadian institutional investor.
The mortgage lender also says it has hired RBC Capital Markets and BMO Capital Markets to advise on further financing and strategic options.
Shares in Home Capital plunged on Wednesday after the company said it was working to secure the credit line and would not meet its financial targets.
The mortgage lender sought the credit line as savers stepped up withdrawals from the high-interest savings accounts of Home Trust, used by the company to fund its lending.
Last week, the Ontario Securities Commission alleged that the company, two former CEOs and the current CFO broke the law in their handling of a scandal involving falsified loan applications. The company has said the allegations are without merit and vowed to defend itself.
The $2-billion line of credit is secured against a portfolio of mortgages originated by Home Trust.
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