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Industrial Alliance Announces the Closing of an Offering of $250 million of 2.80% Fixed/Floating Subordinated Debentures

Not for distribution to U.S. newswire services or for dissemination in the United States.

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 $250 million principal amount of 2.80% fixed/floating subordinated debentures due May 16, 2024 (the "Debentures").

The Debentures will mature on May 16, 2024 and, for the period from May 16, 2014 to but excluding May 16, 2019, will bear interest at a fixed annual rate of 2.80%, payable semi-annually, and, for the period from May 16, 2019 to but excluding May 16, 2024, will bear interest at a variable annual rate equal to the 3-month bankers’ acceptance rate (CDOR) plus 0.79%, payable quarterly. Subject to prior regulatory approval, Industrial Alliance may redeem the Debentures, in whole or in part, on or after May 16, 2019.

The Debentures have been rated “A” by DBRS Limited and “A” by Standard & Poor’s.

The Debentures were offered through a syndicate of agents co-led by TD Securities and RBC Capital Markets, and consisting of BMO Capital Markets, Scotia Capital, CIBC World Markets, National Bank Financial, Casgrain & Company and Industrial Alliance Securities.

The Debentures were issued under a prospectus supplement dated May 13, 2014 to the short form base shelf prospectus dated April 10, 2013. Details of the offering are set out in the prospectus supplement which is available on the SEDAR website at www.sedar.com and on the Company’s website at www.inalco.com.

Notice

The Debentures 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 securities 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, 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.

About Industrial Alliance

Founded in 1892, Industrial Alliance Insurance and Financial Services Inc. operates throughout Canada as well as in the United States. The Company offers life and health insurance products, mutual and segregated funds, savings and retirement plans, securities, auto and home insurance, mortgage and car loans and other financial products and services for both individuals and groups. Ranked among the top four life and health insurance companies in Canada, Industrial Alliance is one of Canada’s largest public companies and trades 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