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Industrial Alliance Announces the Closing of an Offering of $100 Million of 8.25% Subordinated Debentures

Quebec City,

News Release

Industrial Alliance Insurance and Financial Services Inc. ("Industrial Alliance" or the "Company") announced today the closing of its previously announced offering of $100 million of 8.25% subordinated debentures due March 27, 2019 (the "Debentures").

The Debentures bear interest at a fixed annual rate of 8.25% for the first five years, payable semi-annually, and a variable annual rate equal to the 90-day Bankers’ Acceptance Rate plus 7.55% for the last five years, payable quarterly. The Debentures are redeemable by Industrial Alliance subject to certain conditions. The Debentures have been rated "A" with a stable trend by DBRS Limited and "A" by Standard & Poor’s. The net proceeds from this offering will be used for general corporate purposes. The Debentures qualify as Tier 2 capital of the Company for regulatory purposes. This issue was made under the terms of a prospectus supplement to the short form base shelf prospectus dated March 30, 2007. The prospectus supplement is available on the SEDAR website at www.sedar.com and on the Company website at www.inalco.com.

The Debentures were offered on an agency basis by a syndicate of dealers co-led by RBC Dominion Securities Inc. and Scotia Capital Inc., and which includes National Bank Financial Inc., TD Securities Inc., BMO Nesbitt Burns Inc., CIBC World Markets Inc., Desjardins Securities Inc., Casgrain & Company Limited, HSBC Securities (Canada) Inc., Industrial Alliance Securities Inc. and Laurentian Bank Securities Inc.

On a pro forma basis, the Company estimates that, as at December 31, 2008, this issue increased the solvency ratio from 199% to 209%. The Company targets a solvency ratio between 175% and 200%.

Notice
The Debentures have not been and will not be registered under the United States Securities Act of 1933, as amended, or any state securities laws, and may not be offered, sold or delivered, directly or indirectly, in the United States of America. This release does not constitute an offer to sell or a solicitation to buy such securities in the United States.

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 fourth largest life and health insurance company in Canada, Industrial Alliance is at the head of a large financial group, which has operations across Canada as well as in the Western United States. Industrial Alliance contributes to the financial wellbeing of over 3 million Canadians, employs more than 3,300 people and manages and administers over $49 billion in assets. Industrial Alliance stock is listed on the Toronto Stock Exchange under the ticker symbol IAG. Industrial Alliance is among the 100 largest public companies in Canada.

Not for dissemination in the United States or to U.S. newswires 

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Information:
Jacques Carrière
Vice-President, Investor Relations
Office: 418 684-5275