Equitable Bank Achieves Major Funding Success with New Notes
Equitable Bank's Successful Funding Initiative
Equitable Bank, known as Canada's Challenger Bank™, has recently marked a significant milestone in its funding strategy with the completion of a $500 million fixed rate deposit note. This issuance reflects a powerful affirmation of confidence in the bank's long-term strategy and its unique position in the market. The recent offering was met with exceptional demand, resulting in a record-breaking $2.3 billion order book that was oversubscribed by 4.7 times, demonstrating robust investor interest in Equitable Bank's operations.
Details of the Deposit Note Issuance
The deposit note was issued in two distinct tranches. The first tranche comprised a 2-year $200 million deposit note, offered at a 3.92% fixed rate, maturing in two years. The second tranche was a 3.5-year $300 million deposit note with a fixed rate of 3.99%, slated to mature in three and a half years. These tranches were priced at 107 basis points and 127 basis points above the Government of Canada curve, respectively, reflecting a favorable pricing environment and solid investor confidence.
Response from Leadership
Chadwick Westlake, the CFO of Equitable Bank, expressed his enthusiasm regarding the overwhelming response from investors, saying, "The appeal of our strategy is highlighted by this remarkable demand. It underscores the important role that Equitable Bank plays in enhancing the banking landscape in Canada. Our pricing success illustrates the trust investors have in our efforts to deliver sustainable value, and we are inspired to expand on this momentum moving forward." This statement illustrates the bank's commitment to financial growth while providing effective financial solutions to its clientele.
Collaboration with Leading Financial Institutions
The completion of the issuance saw collaboration with several leading firms, including BMO Nesbitt Burns, CIBC World Markets, and RBC Dominion Securities as joint leads and bookrunners. National Bank Financial and Scotia Capital supported the transaction as co-managers, further emphasizing the credibility and trust in Equitable Bank's strategies and operations.
Understanding the Risks and Structure
It's essential to note that the deposit notes rank equally and rateably with all present and future unsecured and unsubordinated liabilities of Equitable Bank. However, it is crucial to mention that these deposit notes are not insured by the Canada Deposit Insurance Corporation, allowing investors to understand the associated risks.
About Equitable Bank's Vision
Equitable Bank’s mission is to drive positive change within the Canadian banking sector. As Canada’s Challenger Bank™ and the seventh largest by assets, it leverages advanced technology to provide exceptional banking experiences for both personal and commercial clients. Serving over 670,000 customers and more than six million credit union members, Equitable Bank consistently emphasizes enriching lives through innovative banking solutions.
Recognition and Growth
Notably, Equitable Bank has earned recognition as one of Canada’s top banks on the Forbes World's Best Banks list since 2021, primarily due to its digital platform, EQ Bank. The bank, a wholly owned subsidiary of EQB Inc. (TSX: EQB and EQB.PR.C), has grown substantially, boasting $125 billion in assets under management.
Frequently Asked Questions
What is the purpose of the $500 million deposit note?
The deposit note supports Equitable Bank's funding strategy and strengthens its financial position for future growth.
Who led the issuance of the deposit notes?
The issuance was led by BMO Nesbitt Burns, CIBC World Markets, and RBC Dominion Securities, with additional support from National Bank Financial and Scotia Capital.
How does Equitable Bank differentiate itself in the market?
Equitable Bank sets itself apart as Canada's Challenger Bank™, offering competitive financial solutions through innovative technology and a commitment to enriching customer experiences.
What are the interest rates on the issued deposit notes?
The 2-year deposit note is set at a 3.92% fixed rate, while the 3.5-year note is at 3.99% fixed rate.
Is investment in these deposit notes insured?
No, the deposit notes are not eligible for Canada Deposit Insurance Corporation insurance, which indicates a level of risk for investors.
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