Industrial Alliance Reassures its Money Market Fund Investors
Industrial Alliance Insurance and Financial Services Inc. wishes to assure its clients that they may continue to feel fully confident in the liquidity of its money market funds and those offered by its subsidiaries, IA Clarington and Industrial Alliance Pacific, despite the turbulent times that the financial markets have experienced in recent days.
Industrial Alliance has announced that it will buy, at 100% of the purchase price plus accrued interest, all non-bank-sponsored asset-backed commercial paper (ABCP) held in the Industrial Alliance Group’s money market funds.
"Our goal in taking this initiative, which is in the best interest of our clients, distribution networks and financial partners, is to offer a solution to the ABCP market’s liquidity crunch," stated Yvon Charest, Industrial Alliance’s President and Chief Executive Officer.
These measures are subject to the approval by the regulatory agencies.
Industrial Alliance is moreover in favour of the agreement that a number of major players in the Canadian financial market circles reached in Montreal on August 16. This agreement aims at re-establishing the normal flow of activity in the Canadian ABCP market for non-bank institutions and at arriving at a solution to the liquidity crunch experienced by these institutions.
In connection with the above initiative, Industrial Alliance expects to devote $77 million to its ABCP purchases. This amount is over and above the $13 million that the Company already has in its general fund. Another insurance company, 45% of the shares of which are held by Industrial Alliance, also has $31 million invested in non-bank-sponsored ABCP. Lastly, Industrial Alliance has an additional $114 million of non-bank-sponsored ABCP invested in various funds other than money market funds. These securities represent, at the most, 2.7% of each of these funds. Industrial Alliance does not anticipate any liquidity problem with regard to these other funds.
Industrial Alliance wishes to point out, moreover, that it does not have any investments in high-risk subprime mortgages in the U.S.
About Industrial Alliance
Founded in 1892, Industrial Alliance Insurance and Financial Services Inc. is a life and health insurance company that 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. The fifth largest life and health insurance company in Canada, Industrial Alliance is at the head of a large financial group, which has operations across Canada and in the western United States. Industrial Alliance insures over 3 million Canadians, employs over 2,900 people and managers and administers over $50 billion in assets. Industrial Alliance stock is listed on the Toronto Stock Exchange, under ticker symbol IAG. Industrial Alliance is among the 100 largest public companies in Canada.
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Manager, Investor Relations
Office: 418 684-5000, extension 4137