TORONTO, April 23, 2024 /CNW/ – Equitable Bank, Canada’s Challenger Bank™, has announced the successful completion of its largest-ever offering of legislative covered bonds. The issuance totaled €500 million (CAD $735 million) in bonds due May 28, 2027. This significant transaction, executed under Equitable Bank’s CAD $3.0 billion Global Legislative Covered Bond Programme, marks a pivotal moment as the Bank’s first foray into social bonds, issued under its Sustainable Bond Framework.
Equitable Bank is committed to supporting communities beyond traditional financial services. The issuance of this social bond is a natural progression of the Bank’s dedication to sustainable business practices. It will enable Equitable Bank to further support lending activities that generate positive social impact, particularly in addressing Canada’s pressing need for social and affordable housing. Recognizing the complexities of the Canadian housing market, characterized by escalating costs and limited affordable options, Equitable Bank structured this covered bond to directly address these challenges and contribute to ensuring adequate and affordable housing solutions.
Chadwick Westlake, Chief Financial Officer of Equitable Bank, commented on this milestone: “This issuance marks twin achievements for Equitable Bank. It is our largest covered bond offering to date and the first-ever social covered bond issued by a Canadian bank. The scale of this issuance broadens our investor base to include those seeking the enhanced liquidity associated with benchmark offerings. The record-setting investor interest underscores the growing global recognition of Equitable Bank’s compelling challenger story.”
Westlake further added, “We are pleased with the continued positive response from investors and rating agencies to our success in diversifying funding sources. This includes the growth of our direct-to-consumer EQ Bank platform and the expansion of our wholesale funding program. Fitch’s recent upgrade of our risk profile and funding and liquidity profile assessment further validates our strategic direction.”
These 3-year, €500 million social covered bonds are rated AA by both Fitch and Morningstar DBRS. They were priced at a spread of 58 basis points over the Euro mid-swap rate. Notably, approximately two-thirds of the investor base, comprising over 100 participants, were new to Equitable Bank’s Covered Bond Programme. The total order book exceeded €4 billion, demonstrating an oversubscription of more than 8 times. Covered bonds remain the most cost-effective wholesale funding instrument available to Equitable Bank, even when factoring in all associated costs.
Listed on the Irish Stock Exchange (Euronext Dublin), these bonds represent Equitable Bank’s fifth issuance since the Canada Mortgage and Housing Corporation (CMHC) approved the Bank’s Covered Bond Programme in July 2021. This latest issuance brings the total outstanding to €1.7 billion (CAD $2.4 billion). Equitable Bank converts all proceeds from its covered bond issuances to CAD, effectively eliminating any foreign exchange or interest rate risk exposure.
The transaction was executed with Barclays, DZ BANK, Erste Group, LBBW, RBC Capital Markets, Scotiabank, and TD Securities acting as joint bookrunners.
This announcement is intended for distribution in the United Kingdom only to Relevant Persons, as defined by the Financial Services and Markets Act (Financial Promotion) Order 2005, and Qualified Investors under Regulation (EU) 2017/1129. In the European Economic Area, this announcement is directed exclusively at Qualified Investors as defined by Regulation (EU) 2017/1129. No other persons should act upon or rely on this information.
About Equitable Bank
Equitable Bank is purposefully driven to reshape Canadian banking to improve the lives of Canadians. As Canada’s Challenger Bank™, and the nation’s seventh-largest bank by assets, Equitable Bank leverages innovative technology to deliver exceptional personal and commercial banking experiences. Serving over 607,000 customers and more than six million credit union members through its various business channels, Equitable Bank is a wholly-owned subsidiary of EQB Inc. (TSX: EQB and EQB.PR.C), a leading digital financial services company with $119 billion in combined assets under management and administration as of January 31, 2024. Through its digital banking platform, EQ Bank (eqbank.ca), Equitable Bank has consistently been recognized by its customers as one of Canada’s top banks, earning a place on the Forbes World’s Best Banks list since 2021.
For further details about Equitable Bank, please visit eqb.investorroom.com or connect with Equitable Bank on LinkedIn.
Investor Contact:
David Lee
Associate Director, Investor Relations
[email protected]
Media Contact:
Maggie Hall
Director, PR & Communications
[email protected]
SOURCE Equitable Bank
