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Email this5:10 pm
December 17, 2016
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From Reuters
Home Capital reportedly approached by Catalyst Capital to form partnership
http://ca.reuters.com/article/.....02WZ-OCABS
Private equity fund Catalyst Capital Group Inc recently proposed a strategic partnership with Home Capital Group that would see it injecting new capital into the lender, the Toronto-based Globe & Mail newspaper reported on Friday.
Citing sources familiar with the proposal, the Globe & Mail reported that Catalyst, an asset manager that focuses on distressed companies, had also put forward a proposed new management team for Home Capital with banking experience.
...
The report said Catalyst is understood to have lined up support for the proposal from a group of institutional investors.
12:30 pm
September 5, 2013
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Today's FP for some update on HCG sales:
http://www.financialpost.com/m.....2017-06-12
12:39 pm
December 17, 2016
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HCG Investor Relations group becoming a little more agressive in the market - from their online home page -
http://www.hometrust.ca/update.aspx
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Todays Liquidity and Deposits update from HCG
1:46 pm
December 17, 2016
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A little straight talk on HCG - from BNN -
Home Capital has nothing to buy, takeover talk is just rumour: PAA Research
http://www.bnn.ca/video/home-c.....ch~1144808
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Todays Liquidity and Deposits update from HCG
http://www.homecapital.com/pre.....202017.pdf
Total Guaranteed Investment Certificate (GIC) deposits, including Oaken and broker GICS, stood at approximately $12.05 billion ... down considerably from the $12.58 billion reported in their May 8th news release.
5:16 pm
April 7, 2017
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How is down by 4.2% "considerable"?
5:38 pm
December 17, 2016
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Cranston said
How is down by 4.2% "considerable"?
Let's see ... down $1 Billion since March 28th, $500 Million in this past month alone ... extrapolating out they could be down $4 Billion at year's end if they can't stanch the flow and the business model can't maintain or increase their market share. Sometimes %s don't tell the story.
10:37 am
April 22, 2017
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FYI, Home lining up a bank syndicate for a $2 billion loan to replace its HOOPP-led LOC: http://ca.reuters.com/article/.....38;sp=true
3:58 pm
April 22, 2017
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Home settles with the OSC: http://www.homecapital.com/pre.....202017.pdf
4:18 pm
December 17, 2016
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Obviously a whole lot more to this case than many on this forum thought, played out by the knuckle-rapping, fines, and sanctions levied against 3 former officers of the company - from the HCG press release -
Under its proposed settlement with the Commission, Home Capital will make a payment of $10 million and reimburse Commission costs in the amount of $500,000. Gerald Soloway (“Soloway”) will be reprimanded, prohibited from acting as a director or officer of any reporting issuer for a period of four years and pay an administrative penalty in the amount of $1 million. Each of Robert Morton (“Morton”) and Martin Reid (“Reid”) will be reprimanded, prohibited from acting as a director or officer of any reporting issuer for a period of 2 years and pay an administrative penalty in the amount of $500,000.
7:21 pm
May 20, 2017
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I'm not sure why you'd say that "Top it up", because we all knew from the beginning that those three former officers were accused of aiding in the alleged cover-up. And I, for one, had taken it as a "given" that they, along with the company, would be penalized by the OSC if penalties were imposed. But also that if it was settled before it got that far, they would be participants in whatever was decided upon. So no surprises when that is exactly what happened.
The important thing now is for the company to put all this behind them and find a way to move on. Something that will be a heck of a lot easier now that the OSC issue and the Class Action Lawsuit appear to be settled.
The withdrawals have slowed, the stock price is beginning to rise, a new Board is in place, and the future is starting to look a lot brighter. Fingers crossed it stays that way, because Oaken is a nice company to deal with. And their current GIC rates are fantastic.
8:07 pm
April 22, 2017
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Incredible how disingenuous the OSC is: they announced that the settlement was for $12 million, but the truth is that the settlement is really $1 million with the other $11 million going toward the $29.5 million class action settlement.
Quite clear that they asked for the higher number in the headlines to save face.
They are going to receive some heat for the way they handled this. So it's no surprise that they made Home's Chair make a statement absolving them of the blame for sparking the liquidity crisis.
11:30 am
December 17, 2016
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From the National Post - with a cautionary analysis -
Home Capital shares surge in wake of settlement
http://business.financialpost......settlement
However, Jaeme Gloyn, an analyst with National Bank of Canada Financial Markets, warned that taking responsibility for disclosure problems could be a “negative factor” in the eyes of depositors and investors.
“We still believe reputational damage, liquidity concerns, impaired funding capabilities, and persistent and material uncertainty have raised the probability the company is unable to continue as a going concern,” he told clients in a note on Thursday. “In our view, these factors continue to outweigh the positive steps management has taken to avoid such an outcome (e.g. recent board hires, third-party purchase funding arrangement and this settlement).”
1:39 pm
December 17, 2016
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From BNN Canada -
"The remaining key hurdle (and the most significant) is getting sufficient funding. Replacing the credit line at a lower cost helps profitability but doesn’t solve the funding issue. The key is getting depositors to buy HCG’s GICs again at levels that don’t just fund renewals, but also fund new originations."
- RBC Capital Markets Analyst Geoffrey Kwan, in a report to clients
4:40 pm
December 17, 2016
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Todays Liquidity and Deposits update from HCG
http://www.homecapital.com/pre.....202017.pdf
The company just seems unable to build let alone sustain the Total Guaranteed Investment Certificate (GIC) deposits, including Oaken and broker GICs number.
4:52 pm
April 22, 2017
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As the true story begins To unfold, it's becoming clearer that the OSC did not have a strong case with respect to their allegations: http://www.pressreader.com/can.....9988885863
In effect, the regulator called "rape!" on this company.
6:23 pm
May 20, 2017
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frank87 said
As the true story begins To unfold, it's becoming clearer that the OSC did not have a strong case with respect to their allegations: http://www.pressreader.com/can.....9988885863In effect, the regulator called "rape!" on this company.
There are those who've been saying right from the start that the OSC didn't have a very strong case. And many who have wondered what the value was in destroying shareholders equity, in the name of "protecting" those very same shareholders.
Despite the deal with Home Capital, the Government needs to take a good long look at what happened here, and take steps to make sure it never happens again. "Heads should roll" over at OSC, regardless of what they forced Home Capital to sign.
On the depositor side, the "bleeding" seems to have stopped now that the news is no longer all bad, and people appear to be slowly regaining confidence in the company. So I'm still very hopeful that things will gradually start to turn around.
Dealing with Oaken is far nicer than dealing with any of the big banks. And Oaken always has better interest rates. So fingers crossed they manage to "ride out" this temporary storm. They've been doing pretty well so far, and I think the worst is now behind them.
8:59 pm
December 4, 2016
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Typhoon said
There are those who've been saying right from the start that the OSC didn't have a very strong case. And many who have wondered what the value was in destroying shareholders equity, in the name of "protecting" those very same shareholders.
Despite the deal with Home Capital, the Government needs to take a good long look at what happened here, and take steps to make sure it never happens again. "Heads should roll" over at OSC, regardless of what they forced Home Capital to sign.
On the depositor side, the "bleeding" seems to have stopped now that the news is no longer all bad, and people appear to be slowly regaining confidence in the company. So I'm still very hopeful that things will gradually start to turn around.
Dealing with Oaken is far nicer than dealing with any of the big banks. And Oaken always has better interest rates. So fingers crossed they manage to "ride out" this temporary storm. They've been doing pretty well so far, and I think the worst is now behind them.
"They've been doing pretty well so far"
I think they did very poorly. Their management was behind the 8 ball. They should have disclosed everything and cleared the air (they waited for regulators to force them to). They should have sought a line of credit sooner. They should have explained, in great detail, how 45 brokers could be accused of wrong doing.
It really had to do with the companies poor management and not regulators.
http://globalnews.ca/news/2140.....ged-fraud/
"Home Capital provided details about the suspensions and its investigation in a news release after markets closed Wednesday. The Ontario Securities Commission had requested the information be released"
The OSC basically had to force Home Capital to disclose.
7:59 am
April 22, 2017
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I do agree that the behaviour of the company's management at the time left a lot to be desired. They unwittingly put themselves into a horrible PR position. But let's also get some facts here:
1. They did disclose everything. The question here is whether they did it in a timely enough manner. What's becoming clearer is that the veracity of the OSC's statement of allegations are now increasingly in doubt.
2. Quite easy to say that they should've secured an LOC sooner when its HISAs depleted in a matter of DAYS. It's not easy to negotiate a favourable one in such circumstances.
3. Not proven at all that the 45 brokers were complicit of fraud. To date, only 2 out of the 45 have been sanctioned. Could very well be that the home buyer himself was fudging things.
7:16 pm
August 4, 2010
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frank87 said
I do agree that the behaviour of the company's management at the time left a lot to be desired. They unwittingly put themselves into a horrible PR position. But let's also get some facts here:1. They did disclose everything. The question here is whether they did it in a timely enough manner. What's becoming clearer is that the veracity of the OSC's statement of allegations are now increasingly in doubt.
2. Quite easy to say that they should've secured an LOC sooner when its HISAs depleted in a matter of DAYS. It's not easy to negotiate a favourable one in such circumstances.
3. Not proven at all that the 45 brokers were complicit of fraud. To date, only 2 out of the 45 have been sanctioned. Could very well be that the home buyer himself was fudging things.
This is nonsense. There is nothing unclear about what the OSC was saying. They very plainly lay out what Home knew and when, from Home's own records of its internal investigations, and what Home did and didn't do. There is no question of "veracity" or "doubt" in what they lay out. The only "allegation" is that these actions and non-actions violated the disclosure regulations. That would have been a question for the OSC commissioners at the end of the proceedings, and has now been made moot by the settlement.
The question is not whether their July 2015 disclosure (where their hand was forced) was "timely" or not. If Home's knowledge of the problems in originations and verification, and the consequences it would have on their future financials, were actually "material" as defined by the regulations, then they were obliged to disclose it during their reports in February and May 2015. In this view, their actual responses about "the weather" and such to direct public questions about their originations results are quite reasonably seen as misleading.
Setting aside the likely difficulty in nailing somewhat sleazy mortgage brokers, Home found significant problems with their own underwriting employees in the matter of income verification.
If OSC should have somehow believed and acted on the assumption that going forward with their enforcement actions would cause a deposit run, then Home's management would have even more reason to. It was not a "few days", but at least a couple months, from the time the OSC delivered enforcement notices in February 2017, that Home would have realized that formal allegation proceedings were a real possibility. Probably they, no more than the OSC, thought that an actual massive deposit run was a serious possibility.
It is certainly possible to argue (certainly with hindsight) that all parties might have acted differently in various ways, but not by sweeping the actual situation under the carpet.
4:44 am
December 17, 2016
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NorthernRaven said
This is nonsense. There is nothing unclear about what the OSC was saying. They very plainly lay out what Home knew and when, from Home's own records of its internal investigations, and what Home did and didn't do. There is no question of "veracity" or "doubt" in what they lay out. The only "allegation" is that these actions and non-actions violated the disclosure regulations. That would have been a question for the OSC commissioners at the end of the proceedings, and has now been made moot by the settlement.
The question is not whether their July 2015 disclosure (where their hand was forced) was "timely" or not. If Home's knowledge of the problems in originations and verification, and the consequences it would have on their future financials, were actually "material" as defined by the regulations, then they were obliged to disclose it during their reports in February and May 2015. In this view, their actual responses about "the weather" and such to direct public questions about their originations results are quite reasonably seen as misleading.
Setting aside the likely difficulty in nailing somewhat sleazy mortgage brokers, Home found significant problems with their own underwriting employees in the matter of income verification.
If OSC should have somehow believed and acted on the assumption that going forward with their enforcement actions would cause a deposit run, then Home's management would have even more reason to. It was not a "few days", but at least a couple months, from the time the OSC delivered enforcement notices in February 2017, that Home would have realized that formal allegation proceedings were a real possibility. Probably they, no more than the OSC, thought that an actual massive deposit run was a serious possibility.
It is certainly possible to argue (certainly with hindsight) that all parties might have acted differently in various ways, but not by sweeping the actual situation under the carpet.
+1
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