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Home Capital Slide Deepens as Rival Seeks to Avoid Contagion

  • Canadian mortgage lender could see investors yank GICs
  • Regulator, Canada’s finance minister are monitoring situation
Bloomberg business news

Home Capital Sale May Be Next After Pension Fund Loan

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Home Capital Group Inc. extended declines after the Canadian mortgage lender reported additional deposit withdrawals, prompting one of its biggest rivals to seek a C$2 billion ($1.5 billion) credit line to stem any contagion across the country’s financial markets.

Home Capital fell 13 percent to C$6.96 in Toronto, bringing its two-week drop to about 69 percent, on concern that redemptions of guaranteed investment certificates by nervous investors would worsen a cash crunch. High-interest deposits have declined about C$1.6 billion, or 80 percent, over the past month to C$391 million, the company said Monday.