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Home Capital Group offering residential mortgage-backed securities

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Home Capital Group offering residential mortgage-backed securities

Home Capital Group Inc. priced an offering of residential mortgage-backed securities comprised of three tranches with total principal of C$500 million.

The residential mortgages backing the securities are near-prime and are uninsured. The private placement is by Classic RMBS Trust, a securitization vehicle sponsored by unit Home Trust Co.

The A tranche of C$425 million will pay annual interest of 3.011%. It will be sold to accredited investors in Canada and the U.S. by a syndicate led by Bank of America Merrill Lynch and co-managed by BMO Capital Markets and RBC Capital Markets. Home Trust will take up the remaining C$75 million of notes in the B and Z tranches.

The private placement is expected to close Sept. 27.