Industrielle Alliance, Insurance and Financial Services


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Financial News Releases

Industrial Alliance announces closing of its offering of common shares and the redemption of 8.25% subordinated debentures

Quebec City, February 27, 2013 - Industrial Alliance Insurance and Financial Services Inc. ("Industrial Alliance" or the "Company") today announces that it has closed its previously announced bought deal public offering of common shares (the "Common Shares") at a price of $37.50 per Common Share purchased by a syndicate of underwriters co-led by National Bank Financial Inc. and BMO Capital Markets. The offering results in a total of 6,330,000 Common Shares being issued today by Industrial Alliance for gross proceeds of $237,375,000. The 6,330,000 Common Shares include 330,000 Common Shares which were issued pursuant to the partial exercise of the over-allotment option by the underwriters. The net proceeds of this offering will be used to redeem all of the outstanding 8.25% subordinated debentures due March 27, 2019 (the "Subordinated Debentures") with a nominal value of $100 million and to redeem all of the Industrial Alliance Trust Securities - Series A (IATS) with a nominal value of $150 million.

The Common Shares were issued under a prospectus supplement dated February 20, 2013 to the short form base shelf prospectus of Industrial Alliance dated April 29, 2011. Details of the offering are set out in the prospectus supplement available on SEDAR at www.sedar.com.

Industrial Alliance also announces that it has exercised today its right to redeem the Subordinated Debentures in accordance with the terms of the trust indenture dated March 27, 2009 governing the Subordinated Debentures. The redemption of the Subordinated Debentures will be effective on April 1, 2013 (the "Redemption Date"). Upon redemption, Industrial Alliance will pay to the holders of Subordinated Debentures a redemption price equal to $1,053.71 per $1,000 principal amount of Subordinated Debentures, plus all accrued and unpaid interest thereon up to but excluding the Redemption Date, for a total of $1,054.84 per $1,000 principal amount of Subordinated Debentures, less any taxes required to be withheld or deducted. The aggregate principal amount of Subordinated Debentures currently outstanding is $100 million.

Notice
The Common Shares offered have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or the securities laws of any state of the United States of America, and may not be offered, sold or delivered, directly or indirectly, within the United States, its territories, its possessions and other areas subject to its jurisdiction or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the U.S. Securities Act), except in certain transactions exempt from, or not subject to, the registration requirements of the U.S. Securities Act and applicable state securities laws. This press release does not constitute an offer to sell or a solicitation of an offer to buy any of these Common Shares within the United States.

Forward-looking Statements
This press release may contain statements relating to strategies used by Industrial Alliance or statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "may", "will", "could", "should", "would", "suspect", "expect", "anticipate", "intend", "plan", "believe", "estimate", and "continue" (or the negative thereof), as well as words such as "objective" or "goal" or other similar words or expressions. Such statements constitute forward looking statements within the meaning of securities laws. Forward looking statements include, but are not limited to, the Company’s expectations regarding the redemption of securities described in this press release and information concerning the Company’s possible or assumed future operating results. These statements are not historical facts; they represent only the Company’s expectations, estimates and projections regarding future events.

Although Industrial Alliance believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements. Factors that could cause actual results to differ materially from expectations include, but are not limited to: Industrial Alliance’s current and expected future capital position, general business and economic conditions; level of competition and consolidation; changes in laws and regulations including tax laws; liquidity of Industrial Alliance including the availability of financing to meet existing financial commitments on their expected maturity dates when required; accuracy of information received from counterparties and the ability of counterparties to meet their obligations; accuracy of accounting policies and actuarial methods used by Industrial Alliance; insurance risks including mortality, morbidity, longevity and policyholder behaviour including the occurrence of natural or man-made disasters, pandemic diseases and acts of terrorism.

Additional information about the material factors that could cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements may be found in the "Risk Management" section of the 2012 Management’s Discussion and Analysis and in the "Management of Risks Associated with Financial Instruments" note to Industrial Alliance’s consolidated financial statements, and elsewhere in Industrial Alliance’s filings with Canadian securities regulators, which are available for review at www.sedar.com.

The forward-looking statements in this news release reflect the Company’s expectations as of the date of this document. Industrial Alliance does not undertake to update or release any revisions to these forward looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events, except as required by law.

About Industrial Alliance
Founded in 1892, Industrial Alliance Insurance and Financial Services Inc. is a life and health insurance company with operations in all regions of Canada as well as in the United States. The Company offers a wide range of life and health insurance products, savings and retirement plans, RRSPs, mutual and segregated funds, securities, auto and home insurance, mortgage loans and other financial products and services for both individuals and groups. The fourth largest life and health insurance company in Canada, Industrial Alliance contributes to the financial wellbeing of over three million Canadians, employs 4,300 people and manages and administers more than $83 billion in assets. Industrial Alliance stock is listed on the Toronto Stock Exchange under the ticker symbol IAG.

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Information: Investor Relations
Grace Pollock 
Office: 418 780-5945
Email: grace.pollock@inalco.com
Website: www.inalco.com