Home Capital gets $2.4 billion confidence vote from Warren Buffett

Home Capital gets $2.4 billion confidence vote from Warren Buffett

Home Capital gets $2.4 billion confidence vote from Warren Buffett Home Capital Group has secured a new $2 billion line of credit from Berkshire Hathaway plus an investment of up to $400 million.

The mortgage lender says that the backing of the world-renowned long-term investor is a “very strong validation and endorsement” of its business, which is under considerable financial pressure.

"Berkshire's investment in Home Capital is a strong vote of confidence in the fundamental, long-term value of our business," said Brenda Eprile, Chair of the Home Capital Board of Directors. "We are pleased to partner with such a renowned institution in a transaction that we believe will reward all our investors for their patience and loyalty by enhancing the value of Home Capital over time."

Around $247 million of the $400 million investment is subject to shareholder approval with the initial investment amounting to around $153.2 million. Assuming both investments are completed, Berkshire Hathaway will hold around 40 per cent of Home Capital stock.

"Home Capital's strong assets, its ability to originate and underwrite well-performing mortgages, and its leading position in a growing market sector make this a very attractive investment," said Warren E.

Buffett, Berkshire Chairman and Chief Executive Officer.

More market update: