Home Equity Income Trust Announces July Distribution and Suspension of Distribution Reinvestment Plan



    TORONTO, July 16 /CNW/ - Home Equity Income Trust (TSX: HEQ.UN) ("HOMEQ"
or the "Trust") today announced a cash distribution of $0.09 per unit for the
month of July 2008 (equivalent to $1.08 per unit on an annualized basis). The
distribution is payable to unitholders of record on July 31 and will be paid
on August 15, 2008.
    Unitholders who are non-residents of Canada will be required to pay all
withholding taxes payable in respect of any distributions by the Trust.
    Effective immediately, the Trust will suspend its optional distribution
reinvestment plan permitting unitholders to use the monthly cash distribution
paid on their existing units to purchase additional units. The plan also paid
4 percent in additional units. At June 30 approximately 13% of issued and
outstanding units were enrolled in the plan. "At current market prices the
equity issued under the plan is expensive. We are within the leverage limits
prescribed by DBRS for the AAA rating on the medium term notes of CHIP
Mortgage Trust and no longer receiving the equity raised by the plan will not
materially impact our ability to maintain these ratios," said Steven Ranson,
President and CEO of the Trust.
    The Trust may consider reinstating the dividend reinvestment plan in the
future.

    Forward Looking Statements

    Home Equity Income Trust from time to time makes written and verbal
forward-looking statements about business objectives, operations, performance,
and financial condition, including, in particular, the forecast of cash
distributions and the likelihood of HOMEQ's success in developing and
expanding its business. These may be included in the Annual Reports,
regulatory filings, reports to unitholders, press releases, Trust
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 Home Equity Income Trust

    Home Equity Income Trust provides unitholders with stable monthly cash
distributions from a portfolio of reverse mortgages originated by its wholly
owned subsidiary Canadian Home Income Plan Corporation ("CHIP"). The Trust's
units are rated SR-2 by Standard and Poor's, which assigns this rating to
funds that have "a very high level of cash distribution stability relative to
other rated Canadian income funds." As of March 31, 2008, the portfolio
generating cash returns to the Trust comprised approximately 6,800 reverse
mortgages with an accrued value of $738 million, secured by residential
properties across Canada worth approximately of $2.1 billion. CHIP
(www.chip.ca), has been the main underwriter of reverse mortgages in Canada
since pioneering the concept in 1986.
    The Trust's units trade on the Toronto Stock Exchange under the symbol
HEQ.UN. Additional information on HOMEQ, including annual and quarterly
reports and the Trust's distribution reinvestment plan, can be viewed at
www.homeq.ca.

    %SEDAR: 00018040E




For further information:

For further information: Steven Ranson, President and Chief Executive
Officer, (416) 413-4663, sranson@homeq.ca; or Scott Cameron, Vice President,
Finance, (416) 413-6605, scameron@homeq.ca

Organization Profile

HOME EQUITY INCOME TRUST

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