TORONTO, April 9, 2024 /CNW/ - Equitable Bank, Canada's Challenger Bank™, announces its latest milestone as it closes a $300 million fixed rate deposit note and returns to this funding market for the first time since 2022. Investor demand led to an issuance at the top end of the announced target size and included the largest-ever number of investors, jointly reinforcing the strength and stability of Equitable Bank's challenger bank value proposition.
The 2.75-year $300 million deposit note was offered at a 5.16% fixed rate and matures on January 11, 2027. Approximately one-third of the 47 investors were new to Equitable Bank's deposit note program, and the total order book was 4.2 times oversubscribed. The transaction, priced at 130bps over the Government of Canada curve, represents Equitable Bank's tightest-ever new issue spread for this tenor and also resulted in significant secondary curve re-pricing.
"The success of this milestone issuance reflects both the efficacy of our funding diversification strategy as well as rapidly growing investor appetite for Equitable Bank's unique challenger story," said Chadwick Westlake, chief financial officer. "Investors are clearly ready for the new kind of bank that we have championed since day one. We are invigorated by this outsized response to our offering as we continue to plan for a bold future in which funding diversification will remain a critical lever."
The issuance was completed with CIBC World Markets, Scotia Capital and TD Securities acting as joint leads and bookrunners, supported by BMO Nesbitt Burns, National Bank Financial and RBC Dominion Securities as co-managers. This deposit note ranks equally and rateably with all of Equitable Bank's present and future unsecured and unsubordinated liabilities, and deposit notes are not eligible for Canada Deposit Insurance Corporation insurance.
About Equitable Bank
Equitable Bank has a clear mission to drive change in Canadian banking to enrich people's lives. As Canada's Challenger Bank™ and seventh largest bank by assets, it leverages technology to deliver exceptional personal and commercial banking experiences and services to over 607,000 customers and more than six million credit union members through its businesses. It is a wholly owned subsidiary of EQB Inc. (TSX: EQB and EQB.PR.C), a leading digital financial services company with $119 billion in combined assets under management and administration (as at January 31, 2024). Through its digital EQ Bank platform (eqbank.ca), its customers have named it the best bank in Canada 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:
Sandie Douville
VP, Investor Relations & ESG Strategy
investor_enquiry@eqb.com
Media contact:
Maggie Hall
Director, PR & Communications
maggie.hall@eqbank.ca
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 (the "Company") objectives, strategies and initiatives, financial results, expectations and risk management, statements about or containing possible future issuances of deposit notes of the Equitable Bank (the "Bank"), a wholly owned subsidiary of the Company, statements made by EQB's CFO and any other statements made herein, whether with respect to the Company'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 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, the Bank and the Canadian economy. Although the Company and the Bank believe 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 and the Bank do not undertake to update any forward-looking statements that are contained herein, except in accordance with applicable securities laws.
The Deposit Note has 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 Equitable Bank
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