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HomeTrust On Sale (Oaken Financial)
May 26, 2017
6:55 am
NorthernRaven
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You'd want to check the details of the GIC's terms and conditions. It might be that though the payment (or compounding) was annual, the actual interest accrual calculations might be done daily, or monthly. if so, the interest would be "earned" at that frequency, and CDIC might pay it out as earned if the GIC contract was cancelled.

May 26, 2017
7:25 am
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frank87 said

CDIC indicates that they aim for reimbursement within 3 business days: http://www.cdic.ca/en/about-cd.....s.aspx  

From that same link

CDIC would hold registered deposits in RRSPs, RRIFs and TFSAs for several days while it works with the Canada Revenue Agency to ensure they remain tax-sheltered. CDIC would contact these depositors directly to inform them of next steps.

May 26, 2017
8:21 am
Bill
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NorthernRaven, I don't think it matters what a GIC's terms and conditions say, you are in fact earning interest every single day, regardless of when it's calculated for compounding or payment purposes. For example, when you are cited an annual rate of, say, 3% then you are earning 3%/365 every day no matter what the terms and conditions provide for, and that's what CDIC will calculate and cover. That's my understanding.

May 26, 2017
8:23 am
NorthernRaven
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Bill said
NorthernRaven, I don't think it matters what a GIC's terms and conditions say, you are in fact earning interest every single day, regardless of when it's calculated for compounding or payment purposes. For example, when you are cited an annual rate of, say, 3% then you are earning 3%/365 every day no matter what the terms and conditions provide for, and that's what CDIC will calculate and cover. That's my understanding.  

I suspect that's the case, but anyone making decisions on GIC payment options because of CDIC repayment worries should double check, not assume.

May 26, 2017
11:25 am
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From today's National Post (per Bloomberg)

Two former Home Capital brokers were penalized by Ontario watchdog

http://business.financialpost......o-watchdog

According to Equifax, mortgage fraud jumped 52 per cent last year from 2011, showing the issue may only be growing.

May 26, 2017
11:54 am
Bill
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NorthernRaven, I agree, you are right, the GIC contract provides the basis of how the accrued/earned but yet unpaid amount of interest is calculated for insurance purposes, and that is separate from the general principle that interest accrued/earned but not yet paid out as of default day is covered in the first place. Those are my understandings based on phone conversations with CDIC officers.

May 26, 2017
2:40 pm
Loonie
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Top It Up said
From today's National Post (per Bloomberg)

Two former Home Capital brokers were penalized by Ontario watchdog

http://business.financialpost......o-watchdog

Let's be clear. These people were NO'T employees of HCG. They are the ones who deceived HCG and started this whole mess.

May 26, 2017
2:45 pm
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From today's National Post - a couple of Portfolio Managers openly crying for a Canadian taxpayer funded bailout of HCG

Dear Mr. Morneau: It’s time to step in and save Home Capital

http://business.financialpost......me-capital

May 26, 2017
2:50 pm
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Todays Liquidity and Deposits update from HCG

http://www.homecapital.com/pre.....202017.pdf

It would appear, by today's numbers, that there's been limited uptake of Oaken's sweetened GIC interest rates.

May 27, 2017
4:29 am
ReX
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Top It Up said
It would appear, by today's numbers, that there's been limited uptake of Oaken's sweetened GIC interest rates.  

Chalk me up as one of the contributors. There must've been 9 others.
Let's see if the "limited" per day is sustained for the next 30 days or so...

May 27, 2017
7:34 am
frank87
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Top It Up said
From today's National Post - a couple of Portfolio Managers openly crying for a Canadian taxpayer funded bailout of HCG

Dear Mr. Morneau: It’s time to step in and save Home Capital

http://business.financialpost......apital  

If you actually read the article and not just the title, they call for the Big Banks to offer a LOC similar to what was offered to Equitable, which was what they were already preparing to do if not for the immediacy of the liquidity crisis.

May 27, 2017
7:45 am
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From the National Post article

He [Morneau] should encourage Canada’s big banks to do what they recently did for another alternative Canadian mortgage company (Equitable Bank), provide a lending backstop that halts a run on deposits and gives Home time to move forward. Perhaps a short-term lending facility by the Bank of Canada accompanied by a Ministerial statement to Home depositors and mortgage holders about the guarantees provided by the CDIC would help.

encourage the banks - yeah, right ... if the big banks wanted to do business with HCG it would have already happened ... I'm sure the big banks might be encouraged with some tax breaks from the government (read taxpayers).

What part did I miss? OR are you in favour of the government threatening the big banks if they don't help out?

May 27, 2017
8:54 am
Norman1
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No encouragement is needed.

Contrary to that National Post opinion piece, the big banks were in the process of giving Home Trust and Home Bank a backstop similar to the one they gave Equitable Bank.

Unfortunately, Home Trust and Home Bank were in a hurry and couldn't wait for the usual diligence to be done for a less-onerous backstop from the banks. Instead, they had to quickly sign on with the backstop offered by the Healthcare of Ontario Pension Plan syndicate.

May 27, 2017
9:20 am
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YEAH, so where is that deal - here's what Hibben said way back on May 11th

“The top priority if I would be able to point one is somebody who would write a liquidity piece” with medium-term notes, Hibben said. “Somewhat similar to the Equitable deal, but as you can imagine the market is thin for these sorts of things.”

May 27, 2017
9:37 am
Norman1
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Not sure why medium-term notes are needed. The syndicate of big banks can just take the $2 billion out of their quarterly profits.

Royal Bank just reported Q2 2017 net income of $2.8 billion. Bank of Montreal reported $1.25-billion. TD Bank reported $2.5 billion. There's $6.55 billion from just three of the big banks in the Equitable Bank backstop syndicate.

In another three months, the three banks will have another $6 billion of profits to do business with.

If Home Trust and Home Bank could have waited a bit longer for their $2 billion backstop, they would have been able to get one like Equitable Bank did.

May 27, 2017
9:48 am
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Norman1 said

If Home Trust and Home Bank could have waited a bit longer for their $2 billion backstop, they would have been able to get one like Equitable Bank did.  

Do you know that for a fact? do you have insider information?

--------------------------------------

With each and every passing day, it's looking more and more like HCG ain't the "great" company, with the well-managed mortgage book, that so many on this forum are making them out to be.

May 27, 2017
10:41 am
frank87
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Top It Up said

Do you know that for a fact? do you have insider information?

--------------------------------------

With each and every passing day, it's looking more and more like HCG ain't the "great" company, with the well-managed mortgage book, that so many on this forum are making them out to be.  

Read the Globe piece from a few weekends ago. A senior banker from one of the Big Banks did approach Home's board about providing a line of credit as part of a syndicate.

Instead of repeating your points ad nauseam, how about providing some facts that back up your claims? Home's book of mortgages have non performing rates and loan loss rates similar to that of the Big Banks.

May 27, 2017
10:55 am
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frank87 said

Read the Globe piece from a few weekends ago. A senior banker from one of the Big Banks did approach Home's board about providing a line of credit as part of a syndicate.
  

For those of us who are pay-walled from the G&M article, perhaps you can capture that entire senior banker part of the story and post it on this thread, 'cause I'm sure Alan Hibben wants to talk to that same senior banker.

May 27, 2017
11:05 am
frank87
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Top It Up said

For those of us who are pay-walled from the G&M article, perhaps you can capture that entire senior banker part of the story and post it on this thread, 'cause I'm sure Alan Hibben wants to talk to that same senior banker.  

Cut and paste:

"As the board was taking steps to negotiate the HOOPP loan, a senior Canadian banker came forward with another offer, according to a source involved in the financing.

The offer included a $2-billion line of credit backed by Canada's largest banks, at a much lower interest rate, along with a proposed candidate for a new CEO and proposed new board candidates. But the source said the offer came when Home Capital was late in negotiations with HOOPP..."

It was also mentioned in a BNN interview with Andrew Willis, the author of the piece:

http://www.bnn.ca/company-news.....gh~1123648

May 27, 2017
11:11 am
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"...along with a proposed candidate for a new CEO and proposed new board candidates."

That deal was NEVER close - HCG's hubris won out and they refused to accept the "banks" conditions - as they say, it was a non-starter from the get-go.

Please write your comments in the forum.