A mortgage servicer at Sun Bank, the country’s largest lender, says it can’t guarantee the payment of a $2 billion loan.
“Sun loan is a loan secured by the bank’s balance sheet and we have no ability to guarantee the repayment of that loan,” the mortgage loan officer said in a statement.
“If you were to lose your Sun loan and need to refinance or refinance your mortgage, you would need to wait until the bank could repay the loan.”
The mortgage loan office was responding to a CBC News story in which Sun Bank said it had “no access” to any Sun loan to guarantee repayment.CBC News asked the Sun loan office about the statement and received no response.
Sun Bank’s loan office declined to comment to CBC News.
The Sun loan program is part of a wider $1.9 billion loan program to finance infrastructure projects across the country.
The company’s debt-to-equity ratio has fallen from more than 90 per cent in 2012 to 70 per cent today.
Sun Bank is in the midst of a major restructuring effort, including a $6 billion restructuring of its business.
Its $2-billion Sun Loan, which is designed to allow borrowers to refloat their mortgages and pay off their debt, was approved last month by the Canadian government and is set to come into effect next month.
Sun loan servicer Lisa Paz said in the statement that the Sun Loan is an “important loan to be used to refranchise mortgages, to refinances existing mortgages, and to finance the development of a new property.”CBC News has reached out to the company for comment and will update this story if we hear back.