/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES
OR FOR DISSEMINATION IN THE UNITED
STATES/
The prospectus supplement, the corresponding
base shelf prospectus and any amendment thereto in connection with
this offering, will be accessible through SEDAR+ within two
business days.
TORONTO, July 9, 2024
/CNW/ - EQB Inc. (TSX: EQB) (TSX: EQB.PR.C) is pleased to announce
the offering of $150 million 8.000%
Limited Recourse Capital Notes, Series 1 (Subordinated
Indebtedness) (the "LRCNs") in Canada. EQB Inc. is the 100% owner of
Equitable Bank (the "Bank"), a Schedule 1 bank regulated by
the Office of the Superintendent of Financial Institutions
Canada.
The LRCNs will bear interest at 8.000% annually, payable
semi-annually, for the initial period ending on, but excluding,
October 31, 2029. Thereafter, the
interest rate on the LRCNs will reset every five years at a rate
equal to the prevailing 5-year Government of Canada Yield plus
4.548%. The LRCNs will mature on October 31,
2084. The expected closing date of the offering of the LRCNs
is July 16, 2024. LRCNs issued by EQB
Inc. are not characterized as Non-Viability Contingent Capital
(NVCC).
The total order book was oversubscribed by more than 4x times
and approximately one-quarter of the 25+ investors were new to the
group's debt platform. "The overwhelming response to our inaugural
LRCN issuance is a testament to investors' belief in EQB's
challenger ethos as we drive change in Canadian banking to enrich
people's lives," said Chadwick
Westlake, chief financial officer, EQB Inc. "This issuance
increases the depth and sophistication of our capital stack, and
the high level of capital markets interest underscores the unique
role we play in the Canadian banking landscape. This issuance
further strengthens our balance sheet as we continue to create
long-term value for our shareholders."
In connection with the issuance of the LRCNs, EQB Inc. will
issue Non-Cumulative 5-Year Fixed Rate Reset Preferred Shares,
Series 5 (the "Series 5 Shares"), to be held by
Computershare Trust Company of Canada, as trustee of EQB LRCN Limited
Recourse Trust (the "Limited Recourse Trust"). In the case
of non-payment of interest on or principal of the LRCNs when due,
the recourse of each LRCN holder will be limited to that holder's
proportionate share of the Limited Recourse Trust's assets held in
respect of the LRCNs, which will consist of the Series 5 Shares,
except in limited circumstances.
The LRCNs may be redeemed during the period from September 30 to and including October 31, 2029, and every five years
thereafter, in whole or in part on not less than 10 nor more than
60 days' prior notice, provided that the Bank elects to complete
and has obtained receipt of all necessary regulatory approvals
relating to a redemption of the same number of Bank Notes (as
defined below).
The gross proceeds from the sale of the LRCNs will be used by
EQB Inc. to acquire $150 million
8.001% Limited Recourse Capital Notes, Series 1 (Non-Viability
Contingent Capital (NVCC)) (Subordinated Indebtedness) of the Bank
(the "Bank Notes"). The Bank Notes are intended to qualify
as additional Tier 1 capital of the Bank within the meaning of the
regulatory capital adequacy requirements to which the Bank is
subject. The proceeds to the Bank from the sale of the Bank Notes
will be added to the Bank's general funds and will be utilized for
general banking purposes, which may include the redemption of
outstanding capital securities of the Bank, and/or the repayment of
other outstanding liabilities of the Bank.
The LRCNs will be offered by way of a prospectus supplement to
EQB Inc.'s short form base shelf prospectus dated July 25, 2022, to be filed on or about
July 9, 2024, with the securities
commissions and other similar regulatory authorities in each of the
provinces and territories of Canada.
Access to the prospectus supplement, the corresponding base
shelf prospectus and any amendment thereto in connection with the
offering of the LRCNs is provided in accordance with securities
legislation relating to procedures for providing access to a shelf
prospectus supplement, a base shelf prospectus and any amendment
thereto.
An electronic or paper copy of the shelf prospectus supplement,
the corresponding base shelf prospectus and any amendment to the
documents may be obtained, without charge, from National Bank
Financial Inc. by email at syndicate-corp@nbc.ca, BMO Nesbitt Burns
Inc. by email at DCMCADSyndicateDesk@bmo.com, CIBC World Markets
Inc. by phone at 416-594-8515 or email at
Mailbox.CIBCDebtSyndication@cibc.com or Scotia Capital Inc. by
email at syndicate.toronto@scotiabank.com.
About EQB Inc.
EQB Inc. (TSX: EQB and EQB.PR.C)
is a leading digital financial services company with $123 billion in combined assets under management
and administration (as at April 30,
2024). It offers banking services through Equitable Bank, a
wholly owned subsidiary and Canada's seventh largest bank by assets, and
wealth management through ACM Advisors, a majority owned subsidiary
specializing in alternative assets. As Canada's Challenger Bank, Equitable Bank has a
clear mission to drive change in Canadian banking to enrich
people's lives. It leverages technology to deliver exceptional
personal and commercial banking experiences and services to over
639,000 customers and more than six million credit union members
through its businesses. Through its digital EQ Bank platform
(eqbank.ca), its customers have named it one of Canada's top banks on the Forbes World's Best
Banks list since 2021.
To learn more, please visit eqb.investorroom.com or connect with
us on LinkedIn.
Investor contact:
David Lee
Associate Director, Investor Relations
investor_enquiry@eqb.com
Media contact:
Maggie Hall
Director, PR & Communications
maggie.hall@eqb.com
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 EQB
Inc.'s objectives, strategies and initiatives, financial results,
expectations and risk management, statements about or containing
the use of proceeds from the offering of the LRCNs and the issuance
of the Bank Notes, the plan of distribution and the expected date
of the offering of the LRCNs and the issuance of the Bank Notes and
any other statements made herein, whether with respect to EQB
Inc.'s and Bank'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 EQB Inc. to be materially different from those
expressed or implied by such forward-looking statements, including
but not limited to risks related to factors discussed in the
prospectus supplement for the offering of the LRCNs, under the
heading "Risk Management" in EQB Inc.'s latest Management's
Discussion and Analysis, and in EQB Inc.'s other documents filed on
SEDAR+ at www.sedarplus.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
EQB Inc., the Bank and the Canadian economy. Although EQB Inc. and
the Bank believe the assumptions used to make such statements are
reasonable at this time and has attempted to identify in the
prospectus for the offering of the LRCNs and 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 EQB Inc. in making
forward-looking statements. 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. EQB Inc. and the Bank do not undertake
to update any forward-looking statements that are contained herein,
except in accordance with applicable securities laws.
The LRCNs have not been, and will not be, registered under the
United States Securities Act of 1933, as amended, or any
state securities laws and may not be offered or delivered, directly
or indirectly, or sold in the United
States. This press release does not constitute an offer to
sell or the solicitation of any offer to buy securities in any
jurisdiction.
SOURCE EQB Inc.