Shares of Home Capital Group rebounded sharply Thursday after the company announced it had secured a $2-billion lifeline and had hired two Canadian banks to consider further financing and other “strategic options.”

Shares in Home Capital (HCG.TO) were up more than 18 per cent early Thursday afternoon.

The news comes a day after the market value of the company dropped by more than 60 per cent on Wednesday. The embattled mortgage lender said it needed to secure a costly loan facility after skittish investors pulled millions from high interest savings accounts used to fund mortgage lending. The company said that it expects its Home Trust subsidiary to have a balance of about $814 million in its high interest savings accounts. That’s down from about $1.4 billion earlier at the end of March.

Investors drew some comfort from the news that Home Capital would indeed be able to tap into the $2-billion line of credit offered by an unnamed institutional investor. The deal sees Home Capital pay a non-refundable commitment fee of $100 million at the offset on the high-interest line, which carries a 10 per cent rate on outstanding balances, and a standby fee of 2.5 per cent on undrawn funds. The company reiterated its warning that the deal will leave it unable to meet previously announced financial targets.

Home Capital uses the high interest savings accounts, along with short and long-term Guaranteed Investment Certificates (GICs) to help fund its mortgage originations, making a lack of available capital a grave concern for the firm. A slate of the big banks, including Scotiabank and CIBC, have placed a $100,000 per-client cap on Home Trust GICs in recent weeks, as they look to limit client exposure to a credit event. The Canada Deposit Insurance Corporation insures deposits up to $100,000 on GICs with an original term of five years or less.

Home Capital also it has retained RBC Capital Markets and BMO Capital Markets “to advise on further financing and strategic options.”