Bank's latest deposit note was oversubscribed by $2.3 billion
Equitable Bank has raised $500 million through a deposit note that saw overwhelming demand from investors.
The deposit note, issued in two tranches, was met with a record-breaking $2.3 billion order book, oversubscribed by 4.7 times, with interest from 44 unique investors.
The two tranches include a 2-year $200 million note at a 3.92% fixed rate, maturing on September 24, 2026, and a 3.5-year $300 million note at a 3.99% fixed rate, maturing on March 24, 2028.
The pricing for these notes, at 107 and 127 basis points above the Government of Canada curve, respectively, represents negative new issue concessions of 3 basis points for each tranche. This strong demand led to further repricing of Equitable Bank’s secondary curve.
"The overwhelming response from investors highlights the appeal of our strategy and the important and evolving role of Equitable in Canada's banking sector," EQ Bank chief financial officer Chadwick Westlake said in a media release. "The attractive pricing we achieved underscores the trust investors place in our ability to deliver sustainable value, and we are energized as we continue building on this momentum to deliver long-term growth."
The deposit notes, which are not eligible for Canada Deposit Insurance Corporation insurance, rank equally with Equitable Bank’s other unsecured and unsubordinated liabilities.
The bank’s latest quarterly results also reflect steady growth, with revenue climbing to $327.2 million, a 15% jump from the same period last year. Adjusted net income reached $117.2 million, up 6% from the previous quarter.
EQ Bank’s continued growth comes amid a competitive market, with alternative lenders steadily chipping away at the Big Six’s market share. EQ Bank has focused on offering new products and higher interest rates to differentiate itself, attracting customers who want better returns on their savings.
Read more: Alternative lenders offer cheaper loans but face consolidation threat from big banks
CEO Andrew Moor attributes much of this growth to products like the notice savings account and accounts tailored to small businesses, which have been key to attracting new customers and helped boost its assets to $54 billion.
“The nice thing about being a medium-sized bank, it’s much easier to think about bringing that kind of product innovation to the market,” Moor said.
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