Company Announcements

Equitable Bank announces another significant growth and diversification milestone with the highly successful inaugural issuance of Covered Bonds in Europe

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TORONTO, Sept. 16, 2021 /CNW/ - Equitable Bank (the "Bank"), is pleased to announce that it has issued €350,000,000 of legislative covered bonds due September 16, 2024 (the "Covered Bonds").

The 3-year Covered Bonds, which are in line with the Bank's stated goals of diversifying its funding structure and reducing funding costs, will be listed on the Irish Stock Exchange (Euronext Dublin).

"This is a watershed milestone for Canada'sChallenger Bank," said Chadwick Westlake, Chief Financial Officer of the Bank. "We are excited with this inaugural issuance and are pleased to have attracted a broad range of new international investors." In total, more than 40 investors participated across 15 countries in the offering, and the issue was close to three times oversubscribed. 

"The support we saw was phenomenal. We believe that this success provides a strong source of third-party validation of the Bank's growth and strategic vision," Westlake continued.

The Bank issued EUR350mm of Covered Bonds at a spread of 15 basis points over EUR mid swaps. Inclusive of all costs, this transaction introduces a source of the lowest cost of wholesale funding available to the Bank by a significant margin. 

"The issuance, which we hope to be the first of several in the coming years, helps support the funding of our growing Personal and Commercial Banking assets. Looking at a longer horizon, lower funding costs for the Bank translates into positives for our customers, employees and shareholders," Westlake said.

This issuance provides the Bank with access to an additional funding source in what is one of the oldest established debt markets in the world and which has proven to be resilient in the face of stress.

The Bank announced on July 27, 2021 that approval was received from Canada Mortgage and Housing Corporation ("CMHC") to establish a CAD $2.0 billion legislative covered bond programme (the "Programme") in accordance with the Canadian Registered Covered Bond Programs Guide, published by CMHC. The offering of the Covered Bonds will be made under the Programme.

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.

Information on the Bank's Covered Bonds is available at: https://www.equitablebank.ca/about-us/investor-relations/covered-bonds-terms-of-access

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 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