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Home Equity Income Trust Announces its Conversion to a Corporation and Final Distribution.

^{Published on 2009-06-12 06:07:25, Last Modified on 2009-06-12 06:08:37 - Market Wire}
 

 TORONTO, June 12 /CNW/ - Home Equity Income Trust (TSX: HEQ.UN) ("HOMEQ" or the "Trust") announced today that it will convert to a corporate structure on June 30, 2009 (the "Conversion") in accordance with a final order issued by the Ontario Superior Court of Justice on May 5, 2009. The Conversion will result in the reorganization of HOMEQ's income trust structure to a publicly-listed corporation ("HOMEQ Corporation") that will own all the units of the Trust. Unitholders of the Trust will receive, for each unit held, one common share of HOMEQ Corporation. The Conversion will be completed on a tax-free rollover basis for Canadian residents. The Trust previously announced the Conversion as part of its plan to continue its operating subsidiary, Canadian Home Income Plan Corporation ("CHIP") as a federally-regulated, Schedule I Canadian bank. The new bank will be called HomEquity Bank in English and Banque HomEquity in French. By obtaining a bank charter HomEquity Bank will have access to retail deposits sourced through deposit brokers. Continuing CHIP as a bank is subject to the review and approval of an application to the Minister of Finance and is anticipated to occur in the third quarter of 2009. The Trust also announced today that on June 29, 2009 it will pay a final cash distribution of $0.12 per unit to unitholders of record on June 23, 2009. Unitholders who are non-residents of Canada will be required to pay all withholding taxes payable in respect of any distributions by the Trust. As previously announced, HOMEQ Corporation plans to begin paying a quarterly dividend of $0.07 per share, with the first quarterly dividend payable to holders of record on the last business day of the fiscal quarter in which CHIP becomes a bank, expected to be September 30, 2009. The amount of any dividends payable by HOMEQ Corporation will be at the discretion of its board of directors and will be evaluated periodically and may be revised subject to business circumstances and expected capital requirements depending on, among other things, HOMEQ Corporation's earnings, financial requirements for the HOMEQ Group's operations, the satisfaction of solvency tests imposed by corporate law for the declaration and payment of dividends and other conditions existing from time to time. Forward Looking Statements Home Equity Income Trust from time to time makes written and verbal forward-looking statements about business objectives, operations, performance, and financial condition, including, in particular the anticipated dividend policy of HOMEQ Corporation, the establishment of HomEquity Bank, and the likelihood of HOMEQ's success in developing and expanding its business. These may be included in the Annual Reports, regulatory filings, reports to unitholders, press releases, Trust presentations and other communications. These forward-looking statements are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies as described in the Trust's Annual Information Form and the Management Discussion and Analysis in its most recent financial statements, many of which are beyond the control of HOMEQ. Actual results may differ materially from those expressed or implied by such forward-looking statements. HOMEQ does not undertake to update any forward-looking statement, whether written or verbal, that may be made from time to time except as required by applicable securities laws. About Home Equity Income Trust Home Equity Income Trust earns income from a portfolio of reverse mortgages originated by its wholly owned subsidiary Canadian Home Income Plan Corporation. As of March 31, 2009, the portfolio generating cash returns to the Trust comprised approximately 7,000 reverse mortgages with an accrued value of $826 million, secured by residential properties across Canada worth approximately $2.3 billion. CHIP ([ www.chip.ca ]), has been the main underwriter of reverse mortgages in Canada since pioneering the concept in 1986. The Trust's units trade on the Toronto Stock Exchange under the symbol HEQ.UN. Additional information on HOMEQ, including annual and quarterly reports can be viewed at [ www.homeq.ca ]. %SEDAR: 00018040E 

For further information: Steven K. Ranson, President and Chief Executive Officer, (416) 413-4663; Gary Krikler, Senior Vice President and Chief Financial Officer, (416) 413-4679