HOMEQ Corporation Extends Maturity of Bank Term Loan, Increases HomEquity Bank Capital Base

TORONTO, Nov. 16, 2011 /CNW/ - HOMEQ Corporation (TSX: HEQ) ("HOMEQ") today announced that it has completed an amendment to an existing loan agreement with a Canadian chartered bank which extends the maturity date of a $10,000,000 bank term loan to November 15, 2016, from May 31, 2016.  There was no change to the coupon of 8.21%.

Contemporaneously with this amendment, the terms of a related investment by HOMEQ in subordinated debt of its subsidiary, HomEquity Bank, have also been amended.  The maturity date of the subordinated debt has been extended to November 15, 2021 from May 31, 2016.  The coupon remains at 8.21% for the first five years following which the debt will bear interest at a rate equal to 3-Month CDOR plus 6.96%.  The subordinated debt constitutes subordinated indebtedness within the meaning of the Bank Act (Canada) and qualifies as Tier 2 B Capital.

"We are extremely happy with this transaction. It improves the capital inclusion of the subordinated debt and adds to the already strong capital base of HomEquity Bank, enabling us to continue the growth we have experienced since receiving our bank charter in late 2009", said Gary Krikler, Senior Vice President and Chief Financial Officer.

Forward Looking Statements

HOMEQ Corporation from time to time makes written and verbal forward-looking statements about business objectives, operations, performance, and financial condition, including the likelihood of HOMEQ's success in developing and expanding its business. These may be included in HOMEQ's and its predecessor's annual reports, regulatory filings, reports to shareholders, press releases, presentations and other communications. These forward-looking statements are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of HOMEQ. Actual results may differ materially from those expressed or implied by such forward-looking statements. HOMEQ does not undertake to update any forward-looking statement, whether written or verbal, that may be made from time to time.

About HOMEQ Corporation

HOMEQ's wholly owned subsidiary HomEquity Bank is Canada's only national provider of reverse mortgages to homeowners aged 55 and over, Canada's fastest growing demographic segment. HomEquity Bank originates and administers Canada's largest portfolio of reverse mortgages under the CHIP Home Income Plan brand. As of September 30, 2011, the mortgage portfolio comprised approximately 8,700 reverse mortgages with an accrued value of $1.1 billion, secured by residential properties across Canada worth approximately $3.1 billion. HomEquity Bank has been the main underwriter of reverse mortgages in Canada since its predecessor, Canadian Home Income Plan, pioneered the concept in 1986.

HOMEQ's shares trade on the Toronto Stock Exchange under the symbol HEQ. Additional information on HOMEQ, including annual and quarterly reports can be viewed at www.homeq.ca.

SOURCE HOMEQ Corporation

For further information:

Steven K. Ranson, President and Chief Executive Officer, (416) 413-4663 or Gary Krikler, Senior Vice President and Chief Financial Officer, (416) 413-4679.

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HOMEQ Corporation

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