Company Announcements

Equitable Bank set to launch $2 billion legislative covered bond programme with approval received from CMHC

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TORONTO, July 27, 2021 /CNW/ - Equitable Bank (the "Bank"), today announced that it has received approval from Canada Mortgage and Housing Corporation ("CMHC") to launch a CAD $2.0 billion legislative covered bond programme (the "Programme") in accordance with the Canadian Registered Covered Bond Programs Guide, published by CMHC.

"We have had our sights set on launching this important funding program, and are really pleased with the news of today's approval. Covered bonds will be an important piece of our funding diversification plan going forward," said Chadwick Westlake, Chief Financial Officer of Equitable Bank. "This lever will enable us to continue to lower our cost of funds, as we bring innovative products to Canadians to drive change in banking to enrich people's lives."

The Bank as issuer and the Programme are now registered, as a registered issuer and registered covered bond program, respectively, in the registry maintained by CMHC in accordance with the National Housing Act (Canada), which will allow the Bank to issue legislative covered bonds (the "Covered Bonds"). The Covered Bonds will be senior, unsecured and unconditional obligations of the Bank and will rank pari passu in right of payment with all of the Bank's deposit liabilities.

Payments of interest and principal on the covered bonds are guaranteed by EQB Covered Bond (Legislative) Guarantor Limited Partnership (the "Guarantor") and will be secured by the assets of the Guarantor, including a portfolio of uninsured residential mortgage loans originated and serviced by the Bank and sold to the Guarantor.

"With approval complete, we will be strategic about timing for each regular issuance. We look forward to our first issuance in Europe, which will make Equitable Bank the first Canadian mid-sized Schedule I Bank to do so, with timing expected to be by early fall this year," Westlake continued.

Covered Bonds issued under the programme will be subject to the Office of the Superintendent of Financial Institutions' requirement that the assets of a financial institution pledged for covered bonds must not represent more than 5.5% of the issuer's total on-balance sheet assets.

In the United Kingdom, this announcement is being distributed only to, and is directed only at, persons who: (A) (i) are "investment professionals" specified in Article 19(5) of the Financial Services and Markets Act (Financial Promotion) Order 2005 (the "Order") or (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order or (iii) are other persons to whom it may otherwise lawfully be communicated; and (B) are "qualified investors" within the meaning of Article 2(e) of Regulation (EU) 2017/1129 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018 (all such persons together being referred to as "Relevant Persons"). In the European Economic Area (the "EEA"), this announcement is addressed only to and directed only at, persons in member states who are "qualified investors" within the meaning of Article 2(e) of Regulation ((EU) 2017/1129 ("Qualified Investors"). This announcement must not be acted on or relied on (i) in the United Kingdom, by persons who are not Relevant Persons, and (ii) in any member state of the EEA, by persons who are not Qualified Investors. Any investment or investment activity to which this announcement relates is available only to: (i) in the United Kingdom, Relevant Persons; and (ii) in any member state of the EEA, Qualified Investors, and will be engaged in only with such persons.

About Equitable

Equitable Group Inc. (the "Company") trades on the Toronto Stock Exchange (TSX: EQB and EQB.PR.C) and serves over a quarter million Canadians through Equitable Bank, Canada's Challenger Bank™. Equitable Bank has grown to become the country's eighth largest independent Schedule I bank with a clear mandate to drive real change in Canadian banking to enrich people's lives. Founded over 50 years ago, Equitable Bank provides diversified personal and commercial banking and through its EQ Bank platform (eqbank.ca) has been named #1 Bank in Canada on the Forbes World's Best Banks 2021 list. Please visit equitablebank.ca for details.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements made in this news release, in other filings with Canadian securities regulators and in other communications include forward-looking statements within the meaning of applicable securities laws ("forward-looking statements"). These statements include, but are not limited to, statements about the Company's objectives, strategies and initiatives, financial result expectations and risk management, statements about or containing possible future issuances of covered bonds of the Bank, statements made by our CFO and any other statements made herein, whether with respect to the Company's businesses or the Canadian economy. Generally, forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "planned", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases which state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, closing of transactions, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements, including but not limited to risks related to capital markets and additional funding requirements, fluctuating interest rates and general economic conditions, legislative and regulatory developments, the nature of our customers and rates of default, and competition as well as those factors discussed under the heading "Risk Management" in the Management's Discussion and Analysis and in the Company's documents filed on SEDAR at www.sedar.com. All material assumptions used in making forward-looking statements are based on management's knowledge of current business conditions and expectations of future business conditions and trends, including their knowledge of the current credit, interest rate and liquidity conditions affecting the Company and the Canadian economy. Although the Company believes the assumptions used to make such statements are reasonable at this time and has attempted to identify in its continuous disclosure documents important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Certain material assumptions are applied by the Company in making forward-looking statements, including without limitation, assumptions regarding its continued ability to fund its mortgage business at current levels, a continuation of the current level of economic uncertainty that affects real estate market conditions, continued acceptance of its products in the marketplace, as well as no material changes in its operating cost structure and the current tax regime. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements that are contained herein, except in accordance with applicable securities laws.

This press release does not constitute an offer to sell or the solicitation of any offer to buy securities in any province, state or jurisdiction in which such offer or solicitation would be unlawful prior to registration or qualification under the securities laws of any such province, state or jurisdiction.

SOURCE Equitable Bank

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