Empire Life Announces Preferred Share Issue

KINGSTON, ONTARIO--(Marketwired - Jan. 25, 2016) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

The Empire Life Insurance Company ("Empire Life" or "the Company") today announced a Canadian public offering of Non-Cumulative Rate Reset Preferred Shares, Series 1 (the "Series 1 Preferred Shares"). Empire Life will issue 5.2 million Series 1 Preferred Shares priced at $25 per share to raise gross proceeds of $130 million. The offering will be underwritten on a bought deal basis by a syndicate of underwriters co-led by Scotia Capital Inc., CIBC World Markets Inc. and TD Securities Inc. Empire Life has granted the underwriters an option to purchase up to an additional 780,000 Series 1 Preferred Shares exercisable at any time up to a period of 30 days from the date of closing.

Holders of Series 1 Preferred Shares will be entitled to receive fixed non-cumulative quarterly dividends yielding 5.75% annually, as and when declared by the Board of Directors of Empire Life, for the initial period ending on and including April 17, 2021. Thereafter, the dividend rate will be reset every five years at a rate equal to the 5-year Government of Canada bond yield plus 4.99%.

Holders of Series 1 Preferred Shares will have the right, at their option, to convert their shares into Non-Cumulative Floating Rate Preferred Shares, Series 2 ("Series 2 Preferred Shares"), subject to certain conditions, on April 17, 2021 and on April 17 every five years thereafter. Holders of the Series 2 Preferred Shares will be entitled to receive non-cumulative quarterly floating dividends, as and when declared by the Board of Directors of Empire Life, at a rate equal to the three-month Government of Canada Treasury Bill yield plus 4.99%.

Empire Life intends to use the net proceeds from the offering for regulatory capital and general corporate purposes.

The offering is expected to close on February 16, 2016, subject to regular closing conditions.

On a pro forma basis, after giving effect to the preferred share issue (but assuming no exercise of the over-allotment option), the Company estimates that, as at September 30, 2015, its MCCSR would have increased from 202% to 220%.

"This is a very positive development for Empire Life," said Mark Sylvia, President and Chief Executive Officer of Empire Life. "This offering will further build on our solid capital base with additional financing that increases our ability to compete and achieve our business goals."

Notice

The Series 1 Preferred Shares and the Series 2 Preferred Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered, sold or delivered in the United States absent registration or an applicable exemption from the registration requirements. This news release shall not constitute an offer to sell or the solicitation of an offer to buy any of the Series 1 Preferred Shares in the United States or in any other jurisdiction where such offer or solicitation is unlawful. No securities regulatory authority has either approved or disapproved of the contents of this news release.

Forward-Looking Statements:

Certain information contained herein relating to, but not limited to, Empire Life and its businesses, the offering of the Series 1 Preferred Shares and the potential issuance of the Series 2 Preferred Shares constitutes forward-looking information under applicable securities laws. All statements, other than statements of historical fact, which address activities, events or developments that Empire Life expects or anticipates may or will occur in the future, are forward-looking information. Forward-looking information typically contains statements with words such as "will", "may", "estimate", "anticipate", "believe", "expect", "potential", "plan", "intend", "target", "project", "forecast" or similar words suggesting future outcomes or outlook. Forward-looking statements in this news release include, but are not limited to, statements with respect to the timing of completion and size of the offering of the Series 1 Preferred Shares, the use of the proceeds of the offering of the Series 1 Preferred Shares and the dividend rates, the other proposed terms of the Series 1 Preferred Shares and the Series 2 Preferred Shares. The forward-looking information included herein involves significant risks, uncertainties and other factors. Additional information on risks, uncertainties and factors that could affect the foregoing forward-looking information and/or Empire Life's operations or financial results is included in its filings with the securities commission or similar authority in each of the provinces of Canada, as may be updated from time to time and will be included in the short-form prospectus relating to the offering of the Series 1 Preferred Shares. Readers are also cautioned that such additional information is not exhaustive.

The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these factors are independent and management's future course of action would depend on its assessment of all information at that time. Although Empire Life believes that the expectations conveyed by the forward-looking information are reasonable based on information available on the date of preparation, no assurances can be given as to future results, levels of activity and achievements. Undue reliance should not be placed on the information contained herein, as actual results achieved will vary from the information provided herein and the variations may be material. Empire Life makes no representation that actual results achieved will be the same in whole or in part as those set out in the forward-looking information. Furthermore, the forward-looking statements contained herein are made as of the date hereof, and Empire Life does not undertake any obligation to update publicly or to revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable laws. Any forward-looking information contained herein is expressly qualified by this cautionary statement.

About Empire Life

Empire Life is a subsidiary of E-L Financial Corporation Limited (TSX:ELF)(TSX:ELF.PR.F)(TSX:ELF.PR.G)(TSX:ELF.PR.H). Since 1923, Empire Life has provided individual and group life and health insurance, investment and retirement products to Canadians. Our mission is to make it simple, fast and easy for Canadians to build wealth, generate income and get the insurance and group benefits coverage they need. As of September 30, 2015 Empire Life had total assets under management of $14.2 billion. Follow Empire Life on Twitter @EmpireLife or visit our website, www.empire.ca for more information.