Home Capital Repays C$2 Billion Credit Line From Berkshire

  • Lender uses proceeds from asset sales to repay Buffett loan
  • Mortgage firm will continue to pay interest on untapped loan

Home Capital Group Inc. said it repaid the balance on a C$2 billion ($1.6 billion) credit line from Warren Buffett’s Berkshire Hathaway Inc. after the Canadian mortgage lender sold assets.

“The full payout of all amounts owing on the Berkshire credit facility is an important next step that highlights the strength of our current liquidity position as we focus on delivering future success," interim Chief Financial Officer Robert Blowes said Tuesday in a statement.

Home Capital received C$662 million from its previously announced agreement to sell some commercial mortgages, the Toronto-based firm said. The company has received about C$1.13 billion in total on the sale and discharges of commercial mortgages tied to its initiatives to increase liquidity.

Home Capital said it will continue to pay a 1 percent standby fee on undrawn funds until the Berkshire facility matures one year from the initial funding date. Buffett last month agreed to buy C$400 million in shares and provide the credit line after the alternative mortgage lender faced a run on deposits.

Home Capital jumped 8 percent to C$14.59 in Toronto. Berskhire agreed to pay about C$10 a share on average for its Home Capital stake.

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