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.