May 23, 2017 / 11:19 PM / 2 years ago

Canada's Home Capital draws down further on credit line

The entry to the Home Capital Group's headquarters is seen at an office tower in the financial district of Toronto, Ontario, Canada May 1, 2017. REUTERS/Chris Helgren

TORONTO (Reuters) - Canada’s biggest non-bank lender Home Capital (HCG.TO) 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Depositors have withdrawn more than 90 percent of funds from Home Capital’s high interest savings accounts since March 27, when the company terminated the employment of former Chief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.

Reporting by Matt Scuffham; Editing by Toni Reinhold

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