One of Canada’s largest private lenders has announced that it is planning to sell as much as 11% of its loans to boost its war chest and weather the COVID-19 pandemic.
The resulting funds will be a welcome respite for Bridging Finance, which froze redemptions in April. The company currently has $1.8 billion in assets under management, Bloomberg reported.
“We are selling some loans at par value to improve liquidity,” said David Sharpe, chief executive of Bridging Finance. “We are doing it in a prudent fashion, as we need to keep cash on hand for the revolvers and for foreign-exchange effects, and once we are comfortable with our liquidity, we will lift the gating of the funds.”
As of last week, the company had already sold $30 million in loans, and is slated to let go of $170 million more.
No lender was left unscathed by the coronavirus outbreak, which took hold of the Canadian financial system in mid-March.
Trez Capital froze approximately $2.6 billion in assets, saying it cannot provide an estimate as to when investors can begin redeeming again to “avoid building unrealistic expectations.”
“We have to protect everything,” said Morley Greene, chairman and chief executive officer of Trez Capital.
Fiera Capital Corp. informed investors in April that it will be able to accommodate only around 20% of redemption requests in its Diversified Lending Fund, which has around $1.5 billion.