Home Capital Announces Closing of $425 Million Residential Mortgage-Backed Securities

Home Capital Group Inc. (“Home Capital”) (TSX:HCG) and its subsidiary Home Trust Company (“Home Trust” ) announce the closing of a previously disclosed private placement of residential mortgage-backed securities (“RMBS”) issued by Classic RMBS Trust (the “Series 2021-2 Notes” or the “Notes”), a securitization vehicle sponsored by Home Trust. The Series 2021-2 Notes are backed by a portfolio of near-prime, uninsured, residential mortgages and are composed of A, B and Z tranches that aggregate to $500 million.

The A tranche of $425 million was sold to accredited investors in Canada and qualified institutional buyers in the United States. The remaining $75 million of Notes, composed of the B and Z tranches, was retained by Home Trust.

The A Tranche is rated AAA(sf) by DBRS and Aaa(sf) by Moody’s. It was priced at an 85 basis point spread over the comparable term Government of Canada bond curve equating to an annual interest rate of 1.528%.

“The healthy investor demand for this RMBS offering demonstrates continuing market support for this program,” stated Brad Kotush, Executive Vice President and Chief Financial Officer at Home Capital. “We expect that programmatic RMBS issuances will be a sustainable element of our ongoing funding strategy.”

The Notes will not be qualified for distribution to the public under the securities laws of any province or territory of Canada and may not be offered or sold in Canada, directly or indirectly, other than pursuant to applicable private placement exemptions. The Notes have not and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act. The Notes are being offered in a private placement, solely to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act, or outside the United States to persons other than “U.S. persons” in compliance with Regulation S under the Securities Act. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the Notes in any jurisdiction, or an offer to purchase.

About Home Capital: Home Capital Group Inc. 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 residential mortgage products, consumer lending and credit card services. In addition, Home Trust offers deposits via brokers and financial planners, and through a direct-to-consumer deposit brand, Oaken Financial. Home Trust also conducts business through its wholly owned subsidiary, Home Bank. Licensed to conduct business across Canada, we have offices in Ontario, Alberta, British Columbia, Nova Scotia, and Quebec.

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Jill MacRae
VP, Investor Relations and ESG
416-933-4991
[email protected]