Equitable Bank continues funding diversification with another successful issuance of Covered Bonds in Europe

/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

TORONTO, May 31, 2023 /CNW/ - Equitable Bank (the "Bank" or "Equitable"), is pleased to announce that it has completed an offering of €300 million of legislative Covered Bonds due May 28, 2026 (the "Covered Bonds"). The bonds were issued under the Bank's Global Legislative Covered Bond Programme, which recently increased in size from a capacity of $2 billion to $3 billion, reflecting the growth in total assets of the Bank since launching the programme.

The 3-year €300 million Covered Bonds are rated AA by Fitch and DBRS and were issued at a spread of 52 basis points over the Euro mid-swap rate. The bonds are listed on the Irish Stock Exchange (Euronext Dublin). This offering is the Bank's fourth issuance since CMHC approved the Bank's programme, and  brings total outstanding to €1.2 billion.

"We regularly profile the benefits of adding more and diverse funding levers, and we have made excellent progress in this strategy over the past few years," said Chadwick Westlake, Chief Financial Officer of the Bank. "This has been translating in the strength and stability of the Bank's margin and liquidity, which we shared more about in our recent Q1 2023 results. Inclusive of all costs, covered bonds remain the lowest cost of wholesale funding available to the Bank. In addition to providing favourably priced funding to the Bank, covered bonds attract foreign investors who do not typically participate in Canadian wholesale funding transactions, and would therefore not be accessible to the Bank otherwise. The issue attracted 24 investors, of which 7 were new investors of Equitable' s covered bonds." 

"Equitable's acquisition of Concentra Bank, which was completed November 1, 2022, provided great synergy to expand the issuance capacity of the programme and add margin tailwind with this strategically important funding source. We intend to remain a regular issuer of covered bonds in Europe," Westlake said.

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 Bank

Equitable Bank, Canada's Challenger Bank™—is a wholly owned subsidiary of EQB Inc., which trades on the Toronto Stock Exchange (TSX: EQB) (TSX: EQB.PR.C) and serves more than 515,000 customers. Equitable Bank's wholly owned subsidiary Concentra Bank supports Canadian credit unions and their more than 6 million members. With nearly $105 billion in combined assets under management and administration, Equitable Bank has a clear mandate to drive change in Canadian banking to enrich people's lives. Founded more than 50 years ago, Canada's Challenger Bank™ provides diversified personal and commercial banking, and through its digital EQ Bank platform (eqbank.ca) has been named the best bank in Canada on the Forbes World's Best Banks 2021, 2022 and 2023 lists. Please visit eqbank.investorroom.com for more 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 that 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 EQB Inc.