Home Capital completes C$425 million private placement of residential mortgage-backed securities

September 27, 2019

Torys represented Home Trust with a team that included Michael Feldman, Jim Hong, Paulina Taneva, Brett Saulnier and Vidushi Hora (corporate/securities) and Nina Mansoori and Yinka Olusoga (debt finance).

On September 27, 2019, Home Capital Group Inc. (“Home Capital”) and its subsidiary Home Trust Company (“Home Trust”) announced the closing of a C$425 million private placement of residential mortgage-backed securities by Classic RMBS Trust, a securitization vehicle sponsored by Home Trust. The Series 2019-1 notes are backed by a portfolio of near-prime, uninsured, residential mortgages and are comprised of A, B and Z tranches that aggregate C$500 million.

The A tranche of C$425 million was sold to accredited investors in Canada and the United States. The remaining C$75 million of the Series 2019-1 notes, composed of the B and Z tranches, was taken up by Home Trust.

The monthly coupon for the A tranche was updated to an annual interest rate of 3.064%, which was increased from the 3.011% previously announced to account for the delayed payment schedule that is typical for Canadian residential mortgage-backed securities in order to reflect the semi-annual equivalent yield agreed with investors.

Home Capital operates through its principal subsidiary, Home Trust Company and Home Trust’s subsidiary Home Bank. 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. In addition, Home Trust and Home Bank offer deposits via brokers and financial planners, and through a direct-to-consumer deposit brand, Oaken Financial.

Further information can be found on Home Capital’s website.

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