Home Capital Group Inc. plans to issue residential mortgage-backed securities regularly, a sign that Bank of Canada efforts to jump start the market are catching on.
The terms were “competitive” compared with the rates the trust is paying its depositors, Kotush said in an interview Monday. “We’d like to come to the market probably twice a year.” “By starting this sustainable program of RMBS issuance we may, with the support of other industry participants, help to establish a private RMBS market in Canada,” Kotush said in a statement.
Home Capital is turning to the securitization market at a time when it doesn’t have any senior unsecured bonds outstanding, said Kotush. The company, which came close to collapse in 2017, is focused on re-gaining its investment grade rating, he said. Home Trust is rated BB+ by S&P Global while Home Capital is rated BB-, both below investment grade.