Canadian Western Bank issues $150 million of Senior Deposit Notes

EDMONTON, November 4, 2011 – Canadian Western Bank (the “Bank”)(TSX: CWB) today announced the completion of a $150 million issuance of Senior Deposit Notes (“the Notes”) in the debt capital markets to a broad group of investors. Proceeds of the issue were added to the Bank’s general funds and will be utilized for general banking purposes.

The Notes bear interest on a fixed rate basis at 2.57%, paid semi-annually, representing a spread of 131.5 basis points above the benchmark Government of Canada instrument. The Notes will mature on November 4, 2014 and will not be redeemable prior to the maturity date. The current rating assigned by DBRS Limited on Canadian Western Bank’s deposits and senior debt is “A (low)” with a stable trend.

“We were very pleased with the success of this placement, which represented our second issuance of senior debt this year,” said Tracey Ball, the Bank’s Executive Vice President and Chief Financial Officer. “Selectively utilizing the debt capital markets is part of our strategy to further diversify the Bank’s funding base over time. It was great to see the strong level of interest expressed by the group of accredited investors who chose to participate in this offering.”

RBC Capital Markets and National Bank Financial acted as co-lead agents on the issue.

About Canadian Western Bank Group
Canadian Western Bank offers highly personalized service through 40 branch locations and is the largest publicly traded Canadian bank headquartered in Western Canada. The Bank specializes in mid-market commercial lending and offers a full complement of personal banking services. The Bank, along with its operating affiliates, National Leasing Group Inc., Canadian Western Trust Company, Valiant Trust Company, Canadian Direct Insurance Incorporated, Adroit Investment Management Ltd. and Canadian Western Financial Ltd., collectively offer a diversified range of financial services across Canada and are together known as Canadian Western Bank Group. The common shares of Canadian Western Bank are listed on the Toronto Stock Exchange under the trading symbol “CWB”. Refer to www.cwbankgroup.com for additional information.

For Further Information Contact:
Kirby Hill, Director, Investor and Public Relations, External Communications Canadian Western Bank, Phone: (780) 441-3770

Canadian Western Bank Senior Debt Rating is A(low)

According to the Dominion Bond Rating Service (DBRS) based in Toronto, Canada, yesterday it has confirmed the Deposits & Senior Debt rating of Canadian Western Bank (CWB) at A (low) and its Subordinated Debt rating at BBB (high) with all trends remaining Stable.  DBRS also recognizes CWB’s long history of low write-off rates and its use of “relationship-based lending” (a key principle well depicted in “The Banker Who Saved  His Soul”.

From the CBRS website –

CWB’s most important strengths are its strong asset quality as evidenced by its very long history of low write-off rates, its proven niche strategy using relationship-based lending, its low-cost base (partially due to its business mix) and its strong internal capital generation characteristics. Funding diversification has improved over the past several years. 

Challenges include concentration in the loan book, both geographically (Alberta and British Columbia) and by industry (commercial, construction and real estate lending), although the secured nature of the loan book and the low write-off rates suggest this issue has been well managed throughout the Bank’s history.

CWB recently reported earnings of $133 million (a return on equity of 15.7%) for the nine months ended July 31, 2011, a 15% increase over adjusted earnings for the similar period in 2010, when it reported an adjusted profit of $116 million. The earnings increase was in part due to higher net interest income and the acquisition of National Leasing Group Inc. (NL) in Q2 2010. Both periods included significant gains on securities, which are not expected to recur. The most recent quarter was CWB’s 93rd consecutive profitable quarter (more than 23 years). Loan loss provisions relative to average loans were 20 basis points (bps) annualized in the first three quarters of 2011, down a little from 21 bps for full-year 2010. Gross non-performing loans as a percentage of gross loans have improved over the course of the year relative to both the loan book and to common equity and reserves. Liquidity levels were temporarily below targeted levels at the end of Q3 2011, but they have since recovered. 

Under DBRS’s global rating methodology for banks, Canadian Western Bank’s long-term Deposits & Senior Debt rating has an intrinsic assessment of A (low) and a support assessment of SA3. The SA3 rating, which reflects the expectation of no timely external support, results in the final rating being equivalent to the intrinsic assessment.

RATINGS

Issuer Debt Rated Rating Action Rating Trend Notes Published
Canadian Western Bank Deposits & Senior Debt Confirmed A (low) Stb Oct 28, 2011
Canadian Western Bank Subordinated Debt Confirmed BBB (high) Stb Oct 28, 2011

 

 

Canadian Western Bank Group Added To The Banker Who Saved His Soul

The Canadian Who Saved His Soul website has added The Canadian Western Bank Group (CW Bank) on its list of Canadian Financial Institutions being observed for corporate responsibility and community involvement. Though a relatively small player in Canadian banking, CW Bank is growing and is in a good position to leverage its smaller organizational and perhaps more flexible corporate culture and organization to become a leader in corporate innovation, social responsibility and community involvement.

CW Bank’s website has the tagline “We Work Hard. We Get Things Done.”  Perhaps an indication of its western roots. They describe themselves as:

Canadian Western Bank (TSX: CWB) is the largest publicly traded Canadian bank headquartered in Western Canada. CWB and its subsidiaries, which are together known as Canadian Western Bank Group (CWB Group), offer a diversified range of financial services through 40 banking branches, eight trust locations, two centralized insurance offices, a focused commercial equipment leasing centre and one wealth management location. We have combined balance sheet assets of approximately $14 billion, assets under administration approaching $10 billion and assets under management near $1 billion. We employ more than 1,800 people working in over 50 different communities across Canada. CWB Group’s collective offering of banking, trust, insurance and wealth management provides our customers with a full complement of financial services, all with one common thread – great personal service.