Back to newsroom

Industrial Alliance Announces the Redemption of its $60 Millions of Series 1 Subordinated Debentures and the Conversion of $18.75 Million of Series 1 Preferred Shares into Common Shares

Quebec City,

News Release

Industrial Alliance Insurance and Financial Services Inc. (Toronto Stock Exchange; IAG) announced today the redemption of all of its Series 1 Subordinated Debentures, with a par value of $60 million, and the conversion of 750,000 of its Series 1 Preferred Shares, held by Capital d’Amérique CDPQ inc., into 444,587 common shares. The common shares were issued at a price of $42.174 each, for an aggregate amount of $18,750,000. Industrial Alliance has received approval from the Agence nationale d’encadrement du secteur financier for these two transactions.

The aggregate of the Series 1 Subordinated Debentures will be redeemed at their par value of $60 million on April 27, 2004. These debentures were issued on January 24, 1994, as part of a private issue of capital underwritten by the Caisse de dépôt et placement du Québec. These debentures were extended in February 1999 and were to mature on January 24, 2010. They became redeemable at the option of Industrial Alliance starting February 12, 2004.

The 750,000 Series 1 Preferred Shares were converted into common shares on April 6, 2004 at a price equal to 95% of the weighted average value of the trading price of Industrial Alliance common shares for the 15-day period preceding the reception of the notice of conversion. Industrial Alliance received the notice of conversion on March 17, 2004. These preferred shares represent the balance of the preferred shares held by Capital d’Amérique CDPQ inc., a subsidiary of the Caisse de dépôt et placement du Québec.

These preferred shares had originally been issued in the form of preferred securities to Capital d’Amérique CDPQ inc. on February 12, 1999, when Industrial Alliance was a mutual company. The issue contained 3,000,000 preferred securities worth $25 each, for a total of $75,000,000. These securities were then converted into preferred shares when Industrial Alliance became a stock company, in February 2000. These preferred shares were convertible into common shares of Industrial Alliance, at the option of the holder, at the rate of $18,750,000 per year, starting on February 10, 2001. In April 2003, 75% of the preferred shares were converted into common shares.

In the last twelve months, Industrial Alliance has redeemed all of its Series 1 ($60 million), Series 2 ($50 million) and Series 3 ($75 million) Subordinated Debentures, converted all of its Series 1 Preferred Shares ($75 million) into common shares and issued $150 million of Innovative Tier 1 capital and $150 million of new subordinated debentures.

About the Industrial Alliance Group
The Industrial Alliance Group is among the most solid financial institutions in the country, where it is a leader in the fields of insurance and financial services. The Group has operations throughout Canada, through Industrial Alliance (Quebec City), National Life (Toronto) and Industrial Alliance Pacific (Vancouver). The sixth largest life and health insurance company in Canada, the Industrial Alliance Group insures over 1.7 million Canadians, employs over 2,400 people and administers and manages $19.6 billion of assets. Industrial Alliance is among the 100 largest public companies in Canada.

- 30 -

Information:
Jacques Carrière
Vice-President, Investor Relations
Industrial Alliance Insurance and Financial Services
Office: (418) 684-5275
Cell: (418) 576-3624