Bank towers are shown from Bay Street in Toronto's financial district, on Wednesday, June 16, 2010. Canada's largest city is getting itself a new resident this year: the headquarters of the federal government's new infrastructure financing agency. THE CANADIAN PRESS/Adrien Veczan
Deal with MCAP allows Home Capital to issue new mortgages
After three weeks of playing defence, lender Home Capital Group Inc. is attempting to move forward by cutting a deal with rival MCAP Corp. that allows Home Capital to make new mortgages and roll over existing ones.
Home Capital, Canada's largest alternative-mortgage provider, said Tuesday that an "independent third party" intends to buy up to $1.5-billion of its commitments to new mortgages, along with home loans that are up for renewal and existing mortgages in its $18-billion portfolio. On Wednesday, sources familiar with the situation identified the mortgage buyer as MCAP, a sizable Toronto-based firm that does mortgage finance. Story (Andrew Willis, Niall McGee, Jacqueline Nelson and Christina Pellegrini)
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Kinder Morgan seeks $1.75-billion IPO to fund Trans Mountain
Kinder Morgan Inc.'s Canadian unit is seeking to raise $1.75-billion in an initial public offering to help fund its contentious Trans Mountain pipeline expansion as the project inches closer to construction.
Houston-based Kinder Morgan plans to offer the restricted voting shares at between $19 and $22 apiece while retaining an ownership stake of up to 77 per cent, according to an updated prospectus filed Wednesday.
The offering is led by Toronto-Dominion Bank and Royal Bank of Canada and is expected to be completed by the end of May. It will list on the Toronto Stock Exchange. Story (Jeff Lewis)
PSP charts ambitious investment course with European hub
The Public Sector Pension Investment Board is ramping up plans for international expansion, opening a London office and charting a more ambitious investment course.
The pension fund said Wednesday that it would launch a European hub to boost the fund's investment exposure to the region, primarily through asset classes such as private equity and debt, infrastructure and real estate. It's the latest effort by PSP to expand to key financial markets beyond Canada, and catch up to other Canadian pension giants that have steadily built beachheads around the globe. Story (Jacqueline Nelson)
DAILY DEALS
Teen retailer Abercrombie & Fitch Co. is in merger talks with at least two interested buyers, according to people familiar with the discussions, as the once-hot brand struggles to find its place in a shifting retail landscape. Story (WSJ)
We are at peak sandwich.The owner of cafe chain Pret A Manger Ltd. is considering a U.S. initial public offering later this year, Bloomberg News reported Wednesday. Story (Bloomberg)
ELSEWHERE IN FINANCE
Deutsche Bank AG's new biggest shareholder, Chinese conglomerate HNA Group, used billions in financing—not just its own money—to help buy its nearly 10% stake in the German lender and protect itself against potential losses on the position. Story (WSJ, subscription required)
Wells Fargo & Co. is investigating whether three senior executives in Chicago inappropriately steered business toward certain individuals in its private-banking unit, according to people familiar with the matter, a move that comes months after the bank settled claims it engaged in "widespread illegal" sales practices in its retail unit. Story (WSJ, subscription required)
Another leveraged buyout, another group of disappointed shareholders.West Corp. – which specializes in conference calls, 911 calls and other communications services – agreed late Tuesday to be acquired by Apollo Global Management LLC. Story (Bloomberg)