Industrial Alliance Announces the Closing of an Offering of $250 million of 2.80% Fixed/Floating Subordinated Debentures

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

QUEBEC CITY, May 16, 2014 /CNW Telbec/ - Industrial Alliance Insurance and Financial Services Inc. ("Industrial Alliance" or the "Company") announced today the closing of its previously announced offering of $250 million principal amount of 2.80% fixed/floating subordinated debentures due May 16, 2024 (the "Debentures").

The Debentures will mature on May 16, 2024 and, for the period from May 16, 2014 to but excluding May 16, 2019, will bear interest at a fixed annual rate of 2.80%, payable semi-annually, and, for the period from May 16, 2019 to but excluding May 16, 2024, will bear interest at a variable annual rate equal to the 3-month bankers' acceptance rate (CDOR) plus 0.79%, payable quarterly. Subject to prior regulatory approval, Industrial Alliance may redeem the Debentures, in whole or in part, on or after May 16, 2019.

The Debentures have been rated "A" by DBRS Limited and "A" by Standard & Poor's.

The Debentures were offered through a syndicate of agents co-led by TD Securities and RBC Capital Markets, and consisting of BMO Capital Markets, Scotia Capital, CIBC World Markets, National Bank Financial, Casgrain & Company and Industrial Alliance Securities.

The Debentures were issued under a prospectus supplement dated May 13, 2014 to the short form base shelf prospectus dated April 10, 2013. Details of the offering are set out in the prospectus supplement which is available on the SEDAR website at www.sedar.com and on the Company's website at www.inalco.com.

Notice

The Debentures have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or the securities laws of any state of the United States of America, and may not be offered, sold or delivered, directly or indirectly, within the United States, its territories, its possessions and other areas subject to its jurisdiction or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the U.S. Securities Act), except in certain transactions exempt from, or not subject to, the registration requirements of the U.S. Securities Act and applicable state securities laws. This press release does not constitute an offer to sell or a solicitation of an offer to buy any of these securities within the United States.

Forward-looking Statements

This press release may contain statements relating to strategies used by Industrial Alliance or statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "may", "will", "could", "should", "would", "suspect", "expect", "anticipate", "intend", "plan", "believe", "estimate", and "continue" (or the negative thereof), as well as words such as "objective" or "goal" or other similar words or expressions. Such statements constitute forward-looking statements within the meaning of securities laws. Forward-looking statements include, but are not limited to, information concerning the Company's possible or assumed future operating results. These statements are not historical facts; they represent only the Company's expectations, estimates and projections regarding future events.

Although Industrial Alliance believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements. Factors that could cause actual results to differ materially from expectations include, but are not limited to: general business and economic conditions; level of competition and consolidation; changes in laws and regulations including tax laws; liquidity of Industrial Alliance including the availability of financing to meet existing financial commitments on their expected maturity dates when required; accuracy of information received from counterparties and the ability of counterparties to meet their obligations; accuracy of accounting policies and actuarial methods used by Industrial Alliance; insurance risks including mortality, morbidity, longevity and policyholder behaviour including the occurrence of natural or man-made disasters, pandemic diseases and acts of terrorism.

Additional information about the material factors that could cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements may be found under "Risk Factors" in Industrial Alliance's most recent annual information form, in Industrial Alliance's most recent management's discussion and analysis under "Risk Management", in the "Management of Risks Associated with Financial Instruments" and "Insurance Contract Liabilities" notes to Industrial Alliance's most recent audited consolidated financial statements, and elsewhere in Industrial Alliance's filings with Canadian securities regulators, which are available for review at www.sedar.com.

The forward-looking statements in this news release reflect the Company's expectations as of the date of this document. Industrial Alliance does not undertake to update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events, except as required by law.

About Industrial Alliance

Founded in 1892, Industrial Alliance Insurance and Financial Services Inc. operates throughout Canada as well as in the United States. The Company offers life and health insurance products, mutual and segregated funds, savings and retirement plans, securities, auto and home insurance, mortgage and car loans and other financial products and services for both individuals and groups. Ranked among the top four life and health insurance companies in Canada, Industrial Alliance is one of Canada's largest public companies and trades on the Toronto Stock Exchange under the ticker symbol IAG.

SOURCE: Industrial Alliance Insurance and Financial Services Inc.

Investor Relations

Grace Pollock
Office: 418 780-5945
Email: [email protected]
Website: www.inalco.com