AmeriHome Mortgage has cancelled its IPO. Instead, the company is being bought by Western Alliance Bancorporation. Even though you won’t be able to buy stock in AmeriHome Mortgage directly, there are still ways to back the company.
On February 16, 2021, Western Alliance Bancorporation announced that it reached an agreement to buy AmeriHome Mortgage from Apollo Global Management, Inc. and Athene Holding Ltd. The deal is valued at approximately $1 billion and will reportedly close in the second quarter of 2021.
Prior to this, AmeriHome had been indecisive about whether it should go public. On October 1, 2020 AmeriHome filed a draft registration with the US Securities and Exchange Commission. The company had planned to go public on the NYSE under the ticker symbol AHM. The value of the proposed deal was $250 million.
About a month later, on October 29, AmeriHome announced it was postponing its IPO due to unfavourable conditions in the financial market. But by early January, 2021, the company had resumed its plans to go public.
Western Alliance has not indicated that it will move forward with an AmeriHome Mortgage IPO in the future.
Western Alliance Bancorporation (NYSE: WAL) is a large public bank headquartered in Phoenix, Arizona (US). It manages over $35 billion in assets and provides full-service banking, loan, deposit and treasury management services under a number of individually-branded divisions. Such divisions include Alliance Bank of Arizona, the Bank of Nevada, First Independent Bank in Nevada and Bridge Bank in Northern California.
Western Alliance also provides customized financing solutions to niche markets like hotel franchises, public and nonprofit organizations and homeowner’s associations (HOAs). As of April 2021, the company is among the top 100 largest banks in the US out of more than 5,000 commercial banks and savings institutions.
Although you won’t be able to buy stock in AmeriHome Mortgage directly, there are 2 ways investors can back the company.
Although it’s a less direct investment than purchasing AmeriHome stocks outright, one option is for investors to buy stock in its soon-to-be parent company, Western Alliance Bancorporation. Western Alliance trades on the New York Stock Exchange (NYSE) under the ticker symbol WAL.
You can access stocks sold on the NYSE using Canadian trading platforms like Questrade, Wealthsimple, Scotia iTRADE and Interactive Brokers.
You’ll need a brokerage account to invest in Western Alliance Group. Here’s how it works:
You can also indirectly buy into AmeriHome Mortgage by investing in exchange-traded funds (ETFs) that track Western Alliance Bancorporation. By purchasing these ETFs, you can potentially earn gains when Western Alliance holdings like AmeriHome Mortgage are performing well.
The following ETFs hold investments in Western Alliance Bancorporation:
Agreements between Canada and the US require Canadians holding US stock investments to pay the US Internal Revenue Service (IRS) a 15% withholding tax on any dividends earned on their US stocks. Interest earned from bonds or other interest-yielding US investments are similarly taxed at a rate of 10%.
An exception is made for stock investments held in trust exclusively designed to provide retirement income. Such trusts include RRIFs, LIRAs, LIFs, LRIFs and Prescribed RRIFs. RRSPs are also exempt from US withholding tax if you own US investments in the form of US stocks, bonds or ETFs.
Investment accounts that do not qualify for this exemption include RESPs, TFSAs and RDSPs.
All income from investments, including foreign investments, must be declared as part of your income on your Canadian tax return. Unless your US earnings are exempt from withholding tax, this means you’ll be double taxed on those earnings — first by the IRS, then by the CRA. However, the CRA may allow you to claim foreign tax credits for any taxes you’ve already paid to the IRS.
Speak with a tax professional to find out what rules and exceptions apply to your circumstances.
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