Credit Line

Frontrunning: June 21

  • Republican Handel Wins Georgia House Seat, Dashing Democrats’ Hopes (BBG)
  • Uber CEO Kalanick Quits as Investors Revolt (WSJ)
  • Saudi King’s Surprise Shakeup Clears Son’s Path to the Throne (BBG)
  • After weeks of secrecy, U.S. Senate to unveil healthcare bill (Reuters)
  • Latest Election-Hacking Hearings to Focus on State-Level Events (WSJ)

"Canada Hasn't Seen A Bank Run Such As This In Decades" - Finance Minister Says Home Capital Bailout Is Possible

"In the early hours of Monday, May 1, exhausted representatives for Home Capital and a group of lenders hung up the phone in frustration. A deal to give the company an emergency $2-billion loan appeared to be falling apart. Directors at the mortgage firm felt that without the money, they wouldn’t be able to open for business a few hours later. The dramatic story of a financial institution’s near-collapse."

Home Capital Bank Run Accelerates As Company Scrambles To Find Additional Liquidity

Canada most troulbed non-bank lender Home Capital confirmed that the bank run at subsidiary Home Trust has failed to slowdown, and as of May 8 "deposit balances are expected to be approximately $192 million." According to the latest data, another 50% of deposits have been pulled in the past week, and are now down over 90% since March 28.

Home Capital Uses Up $1 Billion "Lifeline", Seeks Additional Funding

Home Capital Group is "actively seeking expanded sources of funding" as it has drawn half of its C$2b rescue loan. “This is a fluid situation, and we are optimistic our challenges are temporary,” said Pino Decina, executive vice president of residential mortgage lending.

Will Banks Allow Another Slew Of Oil Bankruptcies?

Last week, U.S. banks boosted the borrowing bases for several independent energy companies, lifting spirits in the industry. The move was taken as a sign that lenders are beginning to share in the optimism that oil and gas producers have been enjoying since the beginning of the year. However, while some banks seem to be sharing some of the optimism, others are more cautious.

"Hell To Pay"

"No doubt, there’s hell to pay for 100 years of ever escalating financial insanity.  Take it in stride.  The downside is here and it’s not going away any time soon."

Why Is Loan Growth Collapsing: Goldman Has An Answer

"we believe the current C&I slowdown reflects payback from credit facility usage by commodities firms, many of which began drawing upon credit lines in late 2015 as financial conditions tightened and the debt issuance window closed" - Goldman