Equitable Group Enhances Capital Structure

Equitable Group Inc. (Company) has issued $20 million in Series 9 Debentures, a new class of subordinated debt, at an initial interest cost of 6.092% - set at 350 basis points over the current 5-year Government of Canada Bond benchmark yield.

As part of this transaction, the Company has repaid $15 million of its term credit facilities with a Canadian chartered bank and The Equitable Trust Company (Equitable Trust) has redeemed all $20 million of its Series 6 Debentures, which until now bore a weighted average interest cost to Equitable Trust of 6.92%. The gross proceeds of the offering of the Series 9 are being used by the Company to purchase subordinated debt of Equitable Trust, which qualifies as Tier 2B regulatory capital and will, in turn, be used to retire Series 6. The Series 9 will pay fixed interest monthly for the first five years of its 10-year term, and then bear a floating interest rate that is calculated at the 90-day CDOR Rate plus 338 basis points thereafter. The issuance of the new Series 9 provides Equitable the ability to extend the average term of its subordinated debt at a lower average interest cost. 

on December 20, 2010