#Canada #Toronto #Equitable Bank #Canada Challenger Bank #funding strategy

Equitable Bank's Record-Breaking Year

Equitable Bank, known as Canada’s Challenger Bank™, recently achieved a notable milestone by successfully closing a $500 million fixed-rate deposit note offering. This impressive accomplishment has not only marked the conclusion of another successful funding transaction but also capped off a remarkable year where the bank's total deposit note issuance reached a staggering $1.3 billion.

This latest offering represents the third and final tranche in 2024, underscoring significant investor confidence, as the offering was nearly three times oversubscribed. The demand was so robust that the final order book crystalized at $1.4 billion. Such overwhelming interest, along with the record-low credit spreads achieved during the issuance, emphasizes Equitable Bank's appeal in transforming banking in Canada while enriching the lives of its customers.

Details of the Offering

The recent deposit notes were divided into two tranches. The first tranche involved the reopening of existing bonds maturing on September 24, 2026, raising $175 million with a yield of 3.832%. Concurrently, a new tranche of $325 million was offered, maturing on December 17, 2027, boasting a fixed rate coupon of 3.910%. Notably, the pricing for these notes was extremely favorable, offering 82 basis points and 100 basis points above the Canadian Government benchmark for the 1.8-year and 3-year notes respectively — achieving historic lows for the bank.

Chadwick Westlake, the bank's Senior Vice President and Chief Financial Officer, articulated that this issuance underscores the bank's successful journey in diversifying its funding strategy. Westlake pointed out that the strong interest expressed by investors serves as a testament to the bank's fundamentals and its strategic direction aimed at providing Canadians with better banking alternatives. He expressed optimism for building upon this year's success in the years to come.

Who Drives the Offering?

This latest transaction was successfully priced with the assistance of major industry players acting as joint leads and bookrunners, including Scotia Capital, BMO Nesbitt Burns, CIBC World Markets, and RBC Dominion Securities. Additionally, National Bank Financial and TD Securities contributed as co-managers for the offering, demonstrating a collaborative effort amongst industry veterans.

The deposit notes rank equally with all existing unsecured and unsubordinated liabilities of Equitable Bank. It is important for potential investors to note that these deposit notes are not eligible for coverage under the Canada Deposit Insurance Corporation insurance.

About Equitable Bank

Equitable Bank is committed to driving a positive change in Canadian banking to enrich the lives of its customers. As Canada’s Challenger Bank™, it ranks as the seventh largest bank by assets, offering both personal and commercial banking experiences that resonate with nearly 700,000 customers and over six million credit union members. The bank operates as a wholly-owned subsidiary of EQB Inc., which boasts a comprehensive asset management portfolio exceeding $127 billion as of October 31, 2024.

Since its launch, the bank's digital platform, EQ Bank, has garnered recognition as one of Canada's leading banks, consistently appearing on the Forbes World's Best Banks list since 2021.

For more information regarding Equitable Bank and its offerings, visiting Equitable Bank's Investor Room and engaging with them on LinkedIn can provide additional insights.

Conclusion

As Equitable Bank's funding strategy continues to break records, there is an air of anticipation for what future endeavors will unfold as it remains dedicated to innovative banking solutions for Canadians.