$2 billion backstop repaid | Oaken Financial | Discussion forum

Please consider registering
guest

sp_LogInOut Log In sp_Registration Register

Register | Lost password?
Advanced Search

— Forum Scope —




— Match —





— Forum Options —





Minimum search word length is 3 characters - maximum search word length is 84 characters

sp_Feed Topic RSS sp_TopicIcon
$2 billion backstop repaid
July 26, 2017
8:19 am
Norman1
Member
Members
Forum Posts: 6898
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

Good news for Home Capital Group. It announced yesterday that it has paid down its $2 billion backstop from Berkshire Hathaway:

The full repayment of the Berkshire backstop credit facility significantly reduces interest expense for the Company going forward. The Company will continue to pay a stand by fee of 1% on undrawn funds until the Berkshire facility matures one year from the initial funding date.


As of July 25, 2017, the Company’s aggregate available liquidity and credit capacity stood at approximately $3.59 billion including an undrawn amount of $2 billion under the Company’s credit facility agreement with Berkshire.

July 26, 2017
10:57 am
Top It Up
Member
Members (temp break)
Forum Posts: 1363
Member Since:
December 17, 2016
sp_UserOfflineSmall Offline

What's the status of HCG's liquidity agreement with HOOPP?

July 27, 2017
7:48 pm
Norman1
Member
Members
Forum Posts: 6898
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

Their agreement, with the group led by Healthcare of Ontario Pension Plan, was terminated on June 29:

On closing [June 29], Home Trust Company drew approximately $1.65 billion on the New Credit Agreement [with a wholly-owned subsidiary of Berkshire Hathaway Inc.] to repay all amounts outstanding under the Old Credit Agreement and the Old Credit Agreement was terminated.

July 30, 2017
1:49 pm
Doug
British Columbia, Canada
Member
Members
Forum Posts: 4257
Member Since:
December 12, 2009
sp_UserOfflineSmall Offline

On closing [June 29], Home Trust Company drew approximately $1.65 billion on the New Credit Agreement [with a wholly-owned subsidiary of Berkshire Hathaway Inc.] to repay all amounts outstanding under the Old Credit Agreement and the Old Credit Agreement was terminated.

  

Exactly, the Berkshire subsidiary revolving credit agreement/standby facility was to replace the exorbitant HOOPP line, specifically as it had no "commitment fee" (as I understood it, HCG paid $100 million to HOOPP before any standby fee or interest was paid on drawn funds which, when taken together, amounted to more than 20% APR. I suspect HOOPP CEO Jim Keohane is likely going to face increasing regulatory scrutiny, and perhaps pressure for him to retire as HOOPP's CEO, given the obvious conflicting interests in his fiduciary duty to HOOPP and to HCG, where he sat on the Board at the time. 🙁

At any rate, HOOPP is generally regarded as one of the more riskier pension plans in Canada when compared to CPPIB, Caisse de depot de placements du Quebec, bcIMC, AIMCo, OTPP, OMERS and now the new IMCO. 😉

Cheers,
Doug

Please write your comments in the forum.