Alternative lender Home Capital Group Inc. said Tuesday it has struck an arrangement to offer a group of commercial mortgage assets valuable at $1.2 billion to private real estate investment firm KingSett Capital.
The deal is intended to give Home Capital some more money as it has confronted hefty withdrawals from its high-interest savings accounts, which it uses to finance its home loan lending.
The arrangement will be able to make Home Capital to diminish its debts, in the wake of going up against an emergency $2-billion credit extension on expensive terms from the Healthcare of Ontario Pension Plan.
On the trade with KingSett, the alternative mortgage lender says it hopes to lose around $15 million. KingSett will purchase the assets for 99.61 percent of their remarkable key value, less a share of future credit losses.
DBRS likewise said it considers the “very humble” price reduction to par on the portfolio deal as indicating “the still-sound credit performance” of Home Capital’s assets.