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Two banks back Home Capital with new $500-million credit line

May 16, 2018 6:32 PM
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The new loan results in a lower aggregate cost than the existing facility, Home Capital’s chief financial officer Brad Kotush said in a statement. “We have significantly reduced our reliance on demand deposits for funding.”

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 (CDOR) 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.

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.


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