N@N

HOMEQ Corporation Subsidiary Arranges Sale of Floating Rate Notes

^{Published on 2009-10-20 06:18:35 - Market Wire}
 

TORONTO, Oct. 20 /CNW/ - HOMEQ Corporation (TSX: HEQ) ("HOMEQ" or the "Company") today announced that its subsidiary, CHIP Mortgage Trust ("CMT"), has arranged the sale of $150,000,000 of senior notes (the "Notes"). The dealer syndicate for the sale was led by RBC Capital Markets and included Scotia Capital Inc. The Notes have a coupon of the three month banker's acceptance rate plus 1.40%, are rated AAA by DBRS Limited and have an expected final payment date of October 26, 2010. They are unconditionally guaranteed by HOMEQ Corporation. The sale is expected to close on or about October 26, 2009.

Today, CMT is expected to file with the securities commissions and other similar regulatory authorities in each of the provinces of Canada, a pricing supplement to the short form base shelf prospectus of CMT dated November 23, 2007. Under the prospectus, CMT may issue up to a total of $750 million of medium term notes from time to time over the 25 months following the date of the prospectus.

HOMEQ recently announced that its operating subsidiary, Canadian Home Income Plan Corporation, has received its Letters Patent and Order to Commence as a federally regulated Schedule I bank known as HomEquity Bank. Through its subsidiaries, HOMEQ finances its portfolio of reverse mortgages through a combination of equity and senior and subordinated notes and term deposits. The senior notes are rated AAA, which is the highest possible rating, and the subordinated notes are rated BBB by DBRS Limited.

Proceeds from the issue will be used to refinance $150,000,000 medium term notes with an expected final payment date of November 1, 2009. Taking the new Notes into account, the Company has a weighted average effective cost on $786 million of senior medium term notes of approximately 103 basis points over the corresponding bankers' acceptance rate.

Forward Looking Statements

HOMEQ Corporation from time to time makes written and verbal forward-looking statements about business objectives, operations, performance, and financial condition, including the likelihood of HOMEQ's success in developing and expanding its business. These may be included in HOMEQ's and its predecessor's annual reports, regulatory filings, reports to shareholders, press releases, 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, 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.

About HOMEQ Corporation

HOMEQ's wholly owned subsidiary HomEquity Bank is Canada's newest Schedule 1 bank. HomEquity Bank is the only national provider of reverse mortgages to homeowners aged 60 and over, Canada's fastest growing demographic segment. HomEquity Bank originates and administers Canada's largest portfolio of reverse mortgages under the CHIP Home Income Plan brand. As of June 30, 2009, the mortgage portfolio comprised approximately 7,000 reverse mortgages with an accrued value of $833 million, secured by residential properties across Canada worth approximately $2.3 billion. HomEquity Bank's predecessor, Canadian Home Income Plan Corporation, has been the main underwriter of reverse mortgages in Canada since pioneering the concept in 1986.

HOMEQ's shares trade on the Toronto Stock Exchange under the symbol HEQ. Additional information on HOMEQ, including annual and quarterly reports can be viewed at [ www.homeq.ca ].

%SEDAR: 00018040E