Home Capital Announces Closing of Residential Mortgage-Backed Securities, Series 2021-1

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 2021-1 Notes”), a securitization vehicle sponsored by Home Trust. The Series 2021-1 Notes are backed by a portfolio of near-prime, uninsured, residential mortgages and are comprised of A, B and Z tranches that aggregate to $400 million.

The A tranche of $340 million was sold to accredited investors in Canada and qualified institutional buyers in the United States. The remaining $60 million, 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 a 110 basis point spread over the comparable term Government of Canada bond curve equating to an annual interest rate of 1.433%.

“The performance of our inaugural 2019 RMBS offering led to healthy demand for these notes by a broad group of Canadian and US institutional investors,” affirmed Brad Kotush, Executive Vice President and Chief Financial Officer at Home Capital. “The reception for this offering by the market supports our conviction that we can grow this funding channel by issuing further RMBS on a sustainable, programmatic basis.”

The Series 2021-1 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 Series 2021-1 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 Series 2021-1 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 Series 2021-1 Notes in any jurisdiction, or an offer to purchase.

Caution Regarding Forward-Looking Statements

From time to time Home Capital Group Inc. makes written and verbal forward-looking statements. These are included in the Annual Report, periodic reports to shareholders, regulatory filings, press releases, Company presentations and other Company communications. Forward-looking statements are made in connection with business objectives and targets, Company strategies, operations, anticipated financial results and the outlook for the Company, its industry, and the Canadian economy. These statements regarding expected future performance are “financial outlooks” within the meaning of National Instrument 51-102. Please see the risk factors, which are set forth in detail in the Risk Management section of the 2021 First Quarter Report, as well as the Company’s other publicly filed information, which is available on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com, for the material factors that could cause the Company’s actual results to differ materially from these statements. These risk factors are material risk factors a reader should consider, and include credit risk, liquidity and funding risk, structural interest rate risk, operational risk, investment risk, strategic risk, reputational risk, compliance risk and capital adequacy risk along with additional risk factors that may affect future results. Forward-looking statements can be found in the Report to the Shareholders and the Outlook section in the Annual Report. Forward-looking statements are typically identified by words such as “will,” “believe,” “expect,” “anticipate,” “intend,” “should,” “estimate,” “plan,” “forecast,” “may,” and “could” or other similar expressions.

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]