Equitable Group to enhance capital structure with new issue of debentures

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

TORONTO, Oct. 17, 2012 /CNW/ - Equitable Group Inc. ("Equitable" or the "Company") today announced that it has entered into an underwriting agreement with a syndicate of underwriters led by TD Securities Inc. and RBC Dominion Securities Inc., and which includes GMP Securities L.P. , BMO Nesbitt Burns Inc. and CIBC World Markets Inc. (collectively, the "Underwriters") pursuant to which the Underwriters have agreed to purchase $65 million of 5.4% debentures due  October 23, 2017 (the "Series 10 Debentures") on a private placement basis.

The gross proceeds of the offering are being used by the Company to acquire debentures from its wholly owned subsidiary, The Equitable Trust Company (the "Series 10 Trustco Debentures"). It is anticipated that the Series 10 Trustco Debentures will qualify as Tier 2B capital of Equitable Trust (subject to the receipt of approval of the Superintendent of Financial Institutions Canada).  Equitable Trust intends to use the proceeds to fund upcoming redemptions of its existing subordinated debt (subject to the prior approval of the Superintendent of Financial Institutions Canada) and for general corporate purposes, including the expansion of its business. The Company plans to use the proceeds received from Equitable Trust on the redemption of certain of Equitable Trust's subordinated debentures to fully repay an outstanding $12,500,000 bank term loan prior to January 31, 2013.

Equitable's current capital levels are in excess of both current and proposed future (Basel III) regulatory standards and more than sufficient to support the Company's ongoing growth.  The Company chose to offer the Series 10 Debentures in anticipation of upcoming maturities of existing debt and in advance of new regulatory capital requirements that will become effective in 2013.

"This offering is a proactive move, made from a position of obvious strength, that allows Equitable to secure capital in anticipation of upcoming maturities and in advance of new rules for capital instruments coming into effect for most Canadian financial institutions next year," said Andrew Moor, President and CEO. "I'm pleased that the interest rate on this debt is lower than the rate on the debt that we intend to redeem over the next few years."

ABOUT EQUITABLE GROUP INC.
Equitable Group Inc. is a niche mortgage lender. Its primary business is first charge mortgage financing, which it offers through its wholly-owned subsidiary, The Equitable Trust Company. Founded in 1970, Equitable Trust is a federally incorporated trust company. It actively originates mortgages across Canada. The Company serves single family, small and large commercial borrowers and their mortgage advisors. It also serves the investing public across all Canadian provinces and territories as a provider of insured Guaranteed Investment Certificates. Equitable Group's common shares and Series 1 preferred shares are traded on the Toronto Stock Exchange under the symbols ETC and ETC.PR.A, respectively. Visit the Company on-line at www.equitabletrust.com and click on Investor Relations.

The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

Cautionary NOTE Regarding FORWARD-LOOKING STATEMENTS
Statements made by the Company 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 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", "it is anticipated", 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.

SOURCE: Equitable Group Inc.

Andrew Moor
President and Chief Executive Officer
[phone]     

Tim Wilson
Vice President and Chief Financial Officer
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