Just two work days after we reported that Home Capital had already used up half of its C$2 billion emergency “lifeline” credit facility (yielding 22.5%) and was seeking additional emergency funding, on Monday Canada’s most troubled alt-mortgage lender provided a liquidity update in which it said that it had drawn an addition C$400 million on its loan, leaving just C$600 million available. At the same time, the company confirmed that the bank run at subsidiary Home Trust has failed to slowdown, and as of May 8 “deposit balances are expected to be approximately $192 million.” According to the latest data, another 50% of deposits have been pulled in the past week, and are now down over 90% since March 28.
Additionally, the company announced that its all important Total Guaranteed Investment Certificate (GIC) deposits, including Oaken and broker GICs, stood at $12.64 billion as at May 5, 2017 compared with $12.86 billion as at April 28, 2017. Oaken savings accounts stood at $167 million as at May 5, 2017 compared $222 million as at April 28, 2017. As a reminder, Home Capital’s GICs are the final lifeline that keeps it alive: as they mature, unless replaced with frash liquidity, the company’s day of reckoning gets dangerously close.
Home Capital also said that as of the close of Friday, its total liquid assets stood at $1.160 billion, a number which is shrinking rapidly with each passing day.
This post was published at Zero Hedge on May 8, 2017.
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