The Bay Street sign is shown in the heart of Toronto’s financial district.MARK BLINCH/Reuters
Editor's note: An earlier version of the Streetwise newsletter was sent in error. This is the correct version.
OSC nixed deal with Home Capital founder: sources
The founder of Home Capital Group Inc. attempted to reach a settlement with the Ontario Securities Commission over allegations the company violated securities laws, but the negotiations broke down and led to a formal case that has helped push the mortgage lender into financial trouble.
Former chief executive officer Gerald Soloway, 78, offered to accept personal responsibility and penalties from the regulator to settle allegations that Home Capital failed to properly disclose information about mortgage fraud by some brokers working with the country's largest alternative lender, according to sources familiar with the negotiations. The commission turned down that deal because investigators felt that sanctions were also warranted against the company and two other Home Capital executives, according to two sources who spoke on condition of anonymit. Story (Andrew Willis)
Home Capital drawing on lifeline loan as depositors flee
As beleaguered Home Capital Group Inc. begins to draw down a loan designed to backstop the mortgage lender's bleeding deposit base, the onerous terms of the financing will cause the company to miss its financial targets for the year.
The Toronto-based company, which is Canada's largest alternative mortgage lender with $18-billion in home loans outstanding, was expecting to draw down half of a $2-billion line of credit secured in an attempt to stabilize the bank, as promised last week. Story (James Bradshaw)
Equitable moves to reassure investors
Equitable Group Inc. tried to distance itself Monday from the troubles plaguing rival Home Capital Group Inc., disclosing some deposit withdrawals and plans for $2-billion in standby financing in a bid to reassure investors of its stability.
Shares of Equitable rose 30 per cent after the Toronto-based alternative mortgage lender announced that it had negotiated a $2-billion credit facility with a syndicate of five major banks to act as a buffer at a time when its deposit base is on the decline. Between last Wednesday and Friday, Equitable said that it averaged daily net deposit outflows of $75-million, with the total representing 2.4 per cent of its overall deposit base. It said these withdrawals were "elevated but manageable." Story (Christina Pellegrini)
DAILY DEALS
Pembina Pipeline Corp. is buying Veresen Inc. for $5.8-billion in the fourth major takeover in Canada's energy infrastructure sector in just over a year. Story (Jeffrey Jones)
PortsToronto is selling the historic Toronto Harbour Commission building and an accompanying surface parking lot in Toronto's South Core to Oxford Properties Group and the Canada Pension Plan Investment Board for $96-million. Story (Paul Attfield)
GSO Capital Partners, private equity firm Blackstone Group LP's credit arm, is acquiring more of J. Crew Group Inc's debt, hoping for a profitable trade that could also give the U.S. fashion retailer more time to stave off bankruptcy, people familiar with the matter said. Story (Reuters)
In March, CIBC upped its bid for PrivateBancorp Inc., and next week, PrivateBancorp shareholders will finally vote on whether or not the new sum is up to scratch. Story (Bloomberg)
Celestica Inc. has been many things since going public 19 years ago. Now, under CEO Rob Mionis, Celestica is something it hasn't been for years: a growth story. Story (Sean Silcoff)
ELSEWHERE IN FINANCE
U.S. President Donald Trump said he was actively considering breaking up big banks, Bloomberg Television reported on Monday. Story
Corporate deal making has hit a dry spell, despite robust stock and bond markets that should call for a deluge. Mergers and acquisitions this year have plunged to their lowest level globally in nearly 20 years, because prices are too high and political and economic uncertainty is making potential buyers wary. Story (WSJ)