Home Capital announces the successful completion of the equity investment by Berkshire Hathaway and the provision of a new C$2 billion credit facility
On June 21, 2017, Home Capital Group Inc. ("Home Capital") announced that Berkshire Hathaway Inc. ("Berkshire") agreed to indirectly acquire approximately C$153 million of Home Capital's common shares on a private placement basis and provide a new C$2 billion line of credit facility to Home Trust Company.
Equity Investment
Berkshire, through its wholly-owned subsidiary Columbia Insurance Company, agreed to make an investment of C$153,225,739 to acquire 16,044,580 common shares, at a price of C$9.55 per share, representing an approximate 19.99% equity stake in Home Capital on a post-issuance basis (25% on a pre-issuance basis). Home Capital announced the completion of the investment on June 29, 2017.
Credit Facility
Home Capital, through Home Trust Company, as borrower, agreed to enter into a new C$2 billion loan facility with a wholly-owned subsidiary of Berkshire, as the agent and initial lender, to be secured against a portfolio of mortgages originated by Home Trust Company, replacing the existing C$2 billion loan facility between Home Trust Company and a major institutional investor. The credit facility was effective as of June 29, 2017.
On July 25, 2017, Home Capital announced that it fully repaid the outstanding balance under its C$2 billion credit facility, significantly reducing its interest expenses going forward.
Home Capital Group is a public company, traded on the Toronto Stock Exchange (HCG), operating through its principal subsidiary, Home Trust Company. Home Trust is a federally regulated trust company offering residential and non-residential mortgage lending, securitization of insured residential mortgage products, consumer lending and credit card services.
Berkshire Hathaway and its subsidiaries engage in diverse business activities including insurance and reinsurance, utilities and energy, freight rail transportation, finance, manufacturing, retailing and services.
Further information can be found on Home Capital's website: Equity Investment and Credit Facility.