DBRS downgrades Home Capital

DBRS said it downgraded Home Capital Group Inc.’s senior debt rating to CCC from BB and short-term instruments rating to R-5 from R-4.

The agency also said it downgraded the ratings of Home Trust Co., Home Capital's primary operating subsidiary, including its issuer rating deposit and senior debt ratings to B from BB (high).

DBRS also said it downgraded the trust company’s short-term instruments rating to R-5 from R-4.

All of the ratings remain under review with negative implications.

DBRS also said it lowered Home Trust's intrinsic assessment to B from BB (high).

The downgrades reflect the agency's concern over recent events, including news that Home Capital as postponed the release of its first quarter 2017 earnings, DBRS said.

This delay is considered negative, especially given that the initial Ontario Securities Commission’s hearing regarding the statement of allegations made against three former members of Home Capital's senior management is scheduled for May 4, the agency said.

These events are likely to continue to draw unfavorable attention to the group, DBRS said.

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