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* Company must pay outstanding C$325 bln bond on May 24
* Company prioritizing new management, alternative funding
* Says asset sales not among three top priorities
* Targets new CEO appointment in next 8 weeks
* Finance minister says Canada mortgage market is healthy (Adds comments from Home Capital director, Canada's finance minister)
By Matt Scuffham
TORONTO, May 15 (Reuters) - Home Capital Group Inc may need to draw down more from a high-interest credit facility provided by the Healthcare of Ontario Pension Plan in order to meet a debt repayment due next week, director Alan Hibben told Reuters on Monday.
Canada's largest non-bank lender is struggling with financing problems after depositors withdrew more than 90 percent of funds from its high-interest savings accounts since March 27, when the company terminated the employment of former Chief Executive Martin Reid.
The withdrawals accelerated after April 19, when Canada's biggest securities regulator, the Ontario Securities Commission, accused Home Capital of making misleading statements to investors about its mortgage underwriting business. The company has said the accusations are without merit.
Home Capital has pledged to pay back all of an outstanding C$325 million bond on its maturity date of May 24. To do so, Hibben said it would likely need to draw down more on a C$2 billion credit line it received last month from HOOPP which analysts said carries an effective interest rate that could be as high as 22.5 percent. Home Capital has so far drawn down C$1.4 billion from the facility.
"That is certainly one of the possibilities, yes," Hibben said. "We're looking at a wide range of alternatives but I'm not sure that any of the other alternatives are going to be in place by May 24 so it's going to be a combination, I would assume, of some of our existing liquidity plus a draw on the HOOPP (facility)."
Hibben, a former Royal Bank of Canada executive, joined the Home Capital board earlier this month to replace founder Gerald Soloway in the first of a series of appointments designed to beef up the company's board as it works with advisers to secure new funding.
In an interview on Monday, he said that Home Capital is prioritizing finding an alternative to the HOOPP loan, agreed on April 27, but could continue operating for "months" with the existing facility in place. He played down the prospect of asset sales, saying they were not among his top three priorities.
Instead, he said the board was prioritizing "management, additional governance and the replacement of the HOOPP deal."
Home Capital's interim Chief Financial Officer Bob Blowes said on Friday the company may need to sell assets to refinance quicker and pay off the HOOPP loan, which he said would significantly impact its performance in 2017.
Reuters reported last Thursday that Home Capital was in talks to divest about C$2 billion in assets, according to people familiar with the situation.
Home Capital, which appointed Brenda Eprile as its chairwoman last week, is searching for a new chief executive and CFO. Hibben said it was targeting the appointment of a new CEO in the next eight weeks.
Home Capital relies on deposits from savers to fund its lending to borrowers, such as self-employed workers or newcomers to Canada, who may not meet the strict criteria of the country's biggest banks.
Home Capital disclosed data on Monday that showed its deposit base had stabilized. Its shares were up 2.3 percent at C$9.35 in late trading.
Canada's Finance Minister Bill Morneau said on Monday he believed Canada's overall mortgage market is healthy.
"We've always seen the Home Capital issue as one that's a Home Capital issue. We don't see a contagion risk here," he told reporters.
Bank of Canada Governor Stephen Poloz also said Home Capital's problems were contained. (Additional reporting by Leah Schnurr in Ottawa; Editing by Nick Zieminski and Bill Rigby)