EQB Inc. to issue 8.000% inaugural Limited Recourse Capital Notes

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The prospectus supplement, the corresponding base shelf prospectus and any amendment thereto in connection with this offering, will be accessible through SEDAR+ within two business days.

TORONTO, July 9, 2024 /CNW/ - EQB Inc. (TSX: EQB) (TSX: EQB.PR.C) is pleased to announce the offering of $150 million 8.000% Limited Recourse Capital Notes, Series 1 (Subordinated Indebtedness) (the "LRCNs") in Canada. EQB Inc. is the 100% owner of Equitable Bank (the "Bank"), a Schedule 1 bank regulated by the Office of the Superintendent of Financial Institutions Canada. 

The LRCNs will bear interest at 8.000% annually, payable semi-annually, for the initial period ending on, but excluding, October 31, 2029. Thereafter, the interest rate on the LRCNs will reset every five years at a rate equal to the prevailing 5-year Government of Canada Yield plus 4.548%. The LRCNs will mature on October 31, 2084. The expected closing date of the offering of the LRCNs is July 16, 2024. LRCNs issued by EQB Inc. are not characterized as Non-Viability Contingent Capital (NVCC).

The total order book was oversubscribed by more than 4x times and approximately one-quarter of the 25+ investors were new to the group's debt platform. "The overwhelming response to our inaugural LRCN issuance is a testament to investors' belief in EQB's challenger ethos as we drive change in Canadian banking to enrich people's lives," said Chadwick Westlake, chief financial officer, EQB Inc. "This issuance increases the depth and sophistication of our capital stack, and the high level of capital markets interest underscores the unique role we play in the Canadian banking landscape. This issuance further strengthens our balance sheet as we continue to create long-term value for our shareholders."

In connection with the issuance of the LRCNs, EQB Inc. will issue Non-Cumulative 5-Year Fixed Rate Reset Preferred Shares, Series 5 (the "Series 5 Shares"), to be held by Computershare Trust Company of Canada, as trustee of EQB LRCN Limited Recourse Trust (the "Limited Recourse Trust"). In the case of non-payment of interest on or principal of the LRCNs when due, the recourse of each LRCN holder will be limited to that holder's proportionate share of the Limited Recourse Trust's assets held in respect of the LRCNs, which will consist of the Series 5 Shares, except in limited circumstances.

The LRCNs may be redeemed during the period from September 30 to and including October 31, 2029, and every five years thereafter, in whole or in part on not less than 10 nor more than 60 days' prior notice, provided that the Bank elects to complete and has obtained receipt of all necessary regulatory approvals relating to a redemption of the same number of Bank Notes (as defined below).

The gross proceeds from the sale of the LRCNs will be used by EQB Inc. to acquire $150 million 8.001% Limited Recourse Capital Notes, Series 1 (Non-Viability Contingent Capital (NVCC)) (Subordinated Indebtedness) of the Bank (the "Bank Notes"). The Bank Notes are intended to qualify as additional Tier 1 capital of the Bank within the meaning of the regulatory capital adequacy requirements to which the Bank is subject. The proceeds to the Bank from the sale of the Bank Notes will be added to the Bank's general funds and will be utilized for general banking purposes, which may include the redemption of outstanding capital securities of the Bank, and/or the repayment of other outstanding liabilities of the Bank.

The LRCNs will be offered by way of a prospectus supplement to EQB Inc.'s short form base shelf prospectus dated July 25, 2022, to be filed on or about July 9, 2024, with the securities commissions and other similar regulatory authorities in each of the provinces and territories of Canada. 

Access to the prospectus supplement, the corresponding base shelf prospectus and any amendment thereto in connection with the offering of the LRCNs is provided in accordance with securities legislation relating to procedures for providing access to a shelf prospectus supplement, a base shelf prospectus and any amendment thereto.

An electronic or paper copy of the shelf prospectus supplement, the corresponding base shelf prospectus and any amendment to the documents may be obtained, without charge, from National Bank Financial Inc. by email at [e-mail], BMO Nesbitt Burns Inc. by email at [e-mail], CIBC World Markets Inc. by phone at 416-594-8515 or email at [e-mail] or Scotia Capital Inc. by email at [e-mail].

About EQB Inc.
EQB Inc. (TSX: EQB and EQB.PR.C) is a leading digital financial services company with $123 billion in combined assets under management and administration (as at April 30, 2024). It offers banking services through Equitable Bank, a wholly owned subsidiary and Canada's seventh largest bank by assets, and wealth management through ACM Advisors, a majority owned subsidiary specializing in alternative assets. As Canada's Challenger Bank, Equitable Bank has a clear mission to drive change in Canadian banking to enrich people's lives. It leverages technology to deliver exceptional personal and commercial banking experiences and services to over 639,000 customers and more than six million credit union members through its businesses. Through its digital EQ Bank platform (eqbank.ca), its customers have named it one of Canada's top banks 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:

David Lee
Associate Director, Investor Relations
[e-mail] 

Media contact:

Maggie Hall
Director, PR & Communications
[e-mail]

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 objectives, strategies and initiatives, financial results, expectations and risk management, statements about or containing the use of proceeds from the offering of the LRCNs and the issuance of the Bank Notes, the plan of distribution and the expected date of the offering of the LRCNs and the issuance of the Bank Notes and any other statements made herein, whether with respect to EQB Inc.'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 EQB Inc. to be materially different from those expressed or implied by such forward-looking statements, including but not limited to risks related to factors discussed in the prospectus supplement for the offering of the LRCNs, under the heading "Risk Management" in EQB Inc.'s latest Management's Discussion and Analysis, and in EQB Inc.'s other documents filed on SEDAR+ at www.sedarplus.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 EQB Inc., the Bank and the Canadian economy. Although EQB Inc. and the Bank believe the assumptions used to make such statements are reasonable at this time and has attempted to identify in the prospectus for the offering of the LRCNs and 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 EQB Inc. in making forward-looking statements. 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. EQB Inc. and the Bank do not undertake to update any forward-looking statements that are contained herein, except in accordance with applicable securities laws.

The LRCNs have 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 EQB Inc.