QUEBEC CITY, Aug. 4 /CNW Telbec/ - Industrial Alliance Insurance and
Financial Services Inc. ("Industrial Alliance" or "the Company") announced
today the issuance, through its wholly-owned subsidiary Corporation Financiere
L'Excellence Ltee, of a $100 million unsecured subordinated debenture. This
debenture was underwritten by the Solidarity Fund QFL, a development capital
corporation.
Corporation Financiere L'Excellence Ltee is a company which controls
Excellence Life Insurance Company and the brokerage companies with which it is
associated. These companies were acquired by Industrial Alliance on
January 31, 2008.
The debenture was issued on August 1, 2008. It has a duration of fifteen
years and matures on August 1, 2023. A first tranche of $12 million will be
used to refinance the debenture issued to the Solidarity Fund QFL by
Corporation Financiere L'Excellence Ltee in 2006, and underwritten by the
Solidarity Fund QFL, whereas a second tranche of $88 million will be used for
the general corporate purposes of Corporation Financiere L'Excellence Ltee and
to finance Industrial Alliance subsidiaries operating in the individual wealth
management and insurance sectors.
The $12 million tranche pays a fixed annual rate of 7% for the first five
years, a fixed annual rate of 5.630% for the next five years and a variable
annual rate (adjusted on the last day of each quarter) equal to the 90-day
Bankers' Acceptance Rate, plus 100 basis points, for the last five years. The
additional tranche of $88 million pays a fixed annual rate of 5.630% for the
first ten years, and a variable annual rate (adjusted on the last day of each
quarter) equal to the 90-day Bankers' Acceptance Rate, plus 100 basis points,
for the last five years.
Corporation Financiere L'Excellence Ltee cannot redeem the debenture
prior to its tenth anniversary, after which time, with the approval of the
Autorite des marches financiers, it will be able to redeem it in whole only,
without penalty. The Solidarity Fund QFL cannot require the reimbursement of
the debenture before it matures, except in particular circumstances and
subject to approval by the Autorite des marches financiers, which allows
Industrial Alliance to qualify the debenture as Tier 2 capital on a
consolidated basis.
According to pro forma data as at June 30, 2008, the debenture increases
Industrial Alliance's solvency ratio from 185% to 195%. The debt ratio
increases from 14.2% to 17.9%, if the debentures alone are included in the
debt items, and from 19.8% to 23.2%, if the preferred shares are added. The
excess capital will increase from $100 million to $198 million.
About Industrial Alliance
Founded in 1892, Industrial Alliance Insurance and Financial Services
Inc.
