TORONTO, March 6, 2013 /CNW/ - Equitable Group Inc. (TSX: ETC and ETC.PR.A) ("Equitable" or the "Company") today announced it has repurchased
$15.8 million of its $23 million 6.50% fixed rate Series 8 Debentures,
an initiative that will further reduce its expenses in future periods.
On January 3, 2013, the Company also redeemed $9.5 million of 7.10%
Series 7 Debentures and repaid its $12.5 million bank term loan, which
bore an interest rate of 6.41%.
The combined savings from these repayments will amount to $0.02 per
share per quarter through until the end of 2014. An early payment
premium of $0.04 per share related to the Series 8 debentures will be
incurred in the first quarter of 2013, which will result in a net cost
of $0.02 in that period.
These repayments were made possible by the successful issuance of $65
million of 5.40% fixed rate Series 10 Debentures in October, 2012,
which elevated the Company's already strong capital ratios.
On a pro forma basis assuming these redemptions took place December 31,
2012, the Company's total capital ratio was a strong 16.5%, fully
supportive of the Company's continued growth and performance. Moreover,
the redemption would not affect the company's December 31, 2012
pro-forma Common Equity Tier I ratio of 12.2%. The Company believes
that even after the redemptions its current capital base and its
earnings in future periods will provide sufficient capital to support
its strategic objectives and ongoing growth.
"These deliberate moves serve to lower our expenses without diminishing
our ability to grow or altering the fact that on every measure,
including new CET1 rules now in force, Equitable is well capitalized,"
said Andrew Moor, President and Chief Executive Officer. "We are
pleased that these redemptions have reduced our average cost of debt to
5.6% from 6.4% just one year ago."
ABOUT EQUITABLE GROUP INC.
Equitable Group Inc. is a niche mortgage lender. Our primary business is
first charge mortgage financing, which we offer through our wholly
owned subsidiary, The Equitable Trust Company. Founded in 1970,
Equitable Trust is a federally incorporated trust company. It actively
originates mortgages across Canada. It serves single family, small and
large commercial borrowers and their mortgage advisors. It also serves
the investing public as a provider of insured Guaranteed Investment
Certificates. Equitable Trust is active in providing GICs across all
Canadian provinces and territories. Equitable Group's 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.
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", 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
SOURCE: Equitable Group Inc.
For further information:
President and CEO
Vice President and CFO