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Transcontinental secures $100 million in financing

Monday, February 09, 2009

Press release from the issuing company

MONTREAL - Transcontinental Inc. today announced it has completed a private placement offering of $100 million in unsecured debentures. These debentures were underwritten by the Solidarity Fund QFL, a development capital fund based in Quebec.

The placement is comprised of two debentures of $50 million each. The first has a term of five years and bears interest, payable every six months, at a rate of 8.06%. The second has a term of ten years and bears interest, payable every six months, at a rate of 6.77% for the first two years. The rate for the following eight years will be set at the beginning of this period at the then prevailing market rate. The Solidarity Fund QFL has a call option on this second debenture on its second anniversary. Other conditions governing these two debentures are customary and no more restrictive than existing indebtedness. Proceeds from issuance of these debentures will be used to finance the capital projects that were announced in recent months.

"This announcement represents a first step in our financing plan for 2009  which fits very well with our strategy of diversification in sources of funds and spreading out of maturities," said Benoit Huard, Vice-President and Chief Financial Officer, Transcontinental Inc. "It signals the confidence investors have in our company, our strategy and our prospects. With our strong balance sheet and cash flow generating ability, our disciplined approach to financial management, our balanced portfolio of businesses, and our investment grade credit rating, we remain very confident that we will fulfill our 2009 financial needs in the near term."

"This transaction is perfectly suited to the Fund's strategy of putting its capital to work patiently and flexibly, and to its long-term vision for Transcontinental, one of Quebec's flagship corporations, with the aim of supporting its growth," said Gaétan Morin, Senior Vice-President, Investments, Solidarity Fund QFL. "We salute the dynamic approach and vision of the Transcontinental team, with whom we are very proud to be associated."




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