TORONTO,
March 6, 2013 /CNW/ - Equitable Group
Inc. (TSX: ETC and ETC.PR.A) ("Equitable" or the "Company")
today announced it has repurchased $15.8
million of its $23 million
6.50% fixed rate Series 8 Debentures, an initiative that will
further reduce its expenses in future periods.
On January 3,
2013, the Company also redeemed $9.5
million of 7.10% Series 7 Debentures and repaid its
$12.5 million bank term loan, which
bore an interest rate of 6.41%.
The combined savings from these repayments will
amount to $0.02 per share per quarter
through until the end of 2014. An early payment premium of
$0.04 per share related to the Series
8 debentures will be incurred in the first quarter of 2013, which
will result in a net cost of $0.02 in
that period.
These repayments were made possible by the
successful issuance of $65 million of
5.40% fixed rate Series 10 Debentures in October, 2012, which
elevated the Company's already strong capital ratios.
On a pro forma basis assuming these redemptions
took place December 31, 2012, the
Company's total capital ratio was a strong 16.5%, fully supportive
of the Company's continued growth and performance. Moreover, the
redemption would not affect the company's December 31, 2012 pro-forma Common Equity Tier I
ratio of 12.2%. The Company believes that even after the
redemptions its current capital base and its earnings in future
periods will provide sufficient capital to support its strategic
objectives and ongoing growth.
"These deliberate moves serve to lower our
expenses without diminishing our ability to grow or altering the
fact that on every measure, including new CET1 rules now in force,
Equitable is well capitalized," said Andrew
Moor, President and Chief Executive Officer. "We are pleased
that these redemptions have reduced our average cost of debt to
5.6% from 6.4% just one year ago."
ABOUT EQUITABLE GROUP INC.
Equitable Group Inc. is a niche mortgage lender.
Our primary business is first charge mortgage financing, which we
offer through our wholly owned subsidiary, The Equitable Trust
Company. Founded in 1970, Equitable Trust is a federally
incorporated trust company. It actively originates mortgages across
Canada. It serves single family,
small and large commercial borrowers and their mortgage advisors.
It also serves the investing public as a provider of insured
Guaranteed Investment Certificates. Equitable Trust is active in
providing GICs across all Canadian provinces and territories.
Equitable Group's shares are traded on the Toronto Stock Exchange
under the symbols ETC and ETC.PR.A respectively. Visit the Company
on line at www.equitabletrust.com and click on Investor
Relations.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
Statements made by the Company 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 the Company's objectives, strategies and
initiatives, financial result expectations and other statements
made herein, whether with respect to the Company'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
the Company to be materially different from those expressed or
implied by such forward-looking statements, including but not
limited to risks related to capital markets and additional funding
requirements, fluctuating interest rates and general economic
conditions, legislative and regulatory developments, the nature of
our customers and rates of default, and competition as well as
those factors discussed under the heading "Risk Management" in the
Management's Discussion and Analysis and in the Company's documents
filed on SEDAR at www.sedar.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
the Company and the Canadian economy. Although the Company believes
the assumptions used to make such statements are reasonable at this
time and has attempted to identify in 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 the Company in making forward-looking statements,
including without limitation, assumptions regarding its continued
ability to fund its mortgage business at current levels, a
continuation of the current level of economic uncertainty that
affects real estate market conditions, continued acceptance of its
products in the marketplace, as well as no material changes in its
operating cost structure and the current tax regime. 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. The Company
does not undertake to update any forward-looking statements that
are contained herein, except in accordance with applicable
securities laws.
SOURCE Equitable Group Inc.