Perpetual Eliminates Minimum Acceptance Condition and Extends Note Exchange Proposal for its 8.75% Senior Notes and Provides Hedging Update

CALGARY, Jan. 12, 2017

The completion of the Note Exchange Proposal is no longer conditional upon Noteholders holding in the aggregate at least $20 million aggregate principal amount of the issued and outstanding Existing Senior Notes accepting the Note Exchange Proposal and tendering their Existing Senior Notes prior to the Expiry Time on the Expiry Date. As of the date hereof, an aggregate of $17.4 million principal amount of Existing Senior Notes have been irrevocably tendered to the Note Exchange Proposal, consisting of $8.4 million principal amount of 2018 Senior Notes and $9.0 million principal amount of 2019 Senior Notes (collectively, the "Tendered Notes").  On the Expiry Date, Perpetual will exchange the Tendered Notes and any additional Existing Senior Notes that are tendered on or prior to the Expiry Time on the Expiry Date for Exchange Senior Notes. 

Holders of Existing Senior Notes who elect to participate in the Note Exchange Proposal will receive $1,000 principal amount of Exchange Senior Notes for each $1,000 principal amount of Existing Senior Notes properly tendered to the Note Exchange Proposal. The Exchange Senior Notes will contain the same terms as the Existing Senior Notes other than now having: (i) an extended maturity date to January 23, 2022 (being five years from the Expiry Date of the Note Exchange Proposal); (ii) an increased annual interest rate for the first year, and only for the first year, that the Exchange Senior Notes are outstanding of 9.75% instead of 8.75%, which is equal to the equivalent of $10 per $1,000 principal amount of Existing Senior Notes validly tendered under the Note Exchange Proposal; and (iii) consequential changes to the interest payment dates and optional redemption provisions to give effect to the extended maturity date and increased annual interest rate for the first year that the Exchange Senior Notes are outstanding.

Holders of Existing Senior Notes who accept and validly tender their Existing Senior Notes to the Note Exchange Proposal will also receive accrued and unpaid interest outstanding up to, but excluding, the Expiry Date.  In particular, holders of 2018 Senior Notes who tender their 2018 Senior Notes to the Note Exchange Proposal will receive $31.16 per $1,000 principal amount of 2018 Senior Notes in cash. All holders of 2019 Senior Notes will receive their semi-annual interest payment of $43.75 per $1,000 principal amount of 2019 Senior Notes in cash regardless of whether or not they tender their 2019 Senior Notes to the Note Exchange Proposal. In each case the payments represent all accrued and unpaid interest outstanding up to, but excluding, the Expiry Date of January 23, 2017. 

There is currently outstanding $36.0 million aggregate principal amount of 2018 Senior Notes and $24.6 aggregate principal amount of 2019 Senior Notes. Assuming no additional Existing Senior Notes are properly tendered to the Note Exchange Proposal before the Expiry Time on the Expiry Date there will be $27.6 million aggregate principal amount of 2018 Senior Notes and $15.6 million aggregate principal amount of 2019 Senior Notes remaining outstanding and $17.4 million aggregate principal amount of Exchange Senior Notes outstanding upon completion of the Note Exchange Proposal.

The Board of Directors and management of Perpetual believe the Note Exchange Proposal will enhance the Company's strategy of long term value creation for securityholders as well as its assets and operations. The Note Exchange Proposal will improve the Company's liquidity beyond the current maturity dates of the Existing Senior Notes, enabling Perpetual to pursue strategic growth and value-enhancing opportunities important to its corporate strategy. Directing capital to further develop the Company's asset base and augment the profitability of its operations is expected to generate greater short and long term value for securityholders than would the retirement of its Existing Senior Notes. The directors and officers of Perpetual have tendered their Existing Senior Notes to the Note Exchange Proposal.

Upon the successful completion of the Note Exchange Proposal, Noteholders who participate in the Note Exchange Proposal will continue to own a security on substantially the same terms (including the 8.75% coupon rate) as the Existing Senior Notes with the additional benefit of having a longer maturity date of five years from the Expiry Date and an increased annual interest rate for the first year the Exchange Senior Notes are outstanding without incurring any additional transaction costs. In addition, in the event that a significant amount of the outstanding aggregate principal amount of the Existing Senior Notes are properly tendered to the Note Exchange Proposal, holders of the Exchange Senior Notes are anticipated to benefit from improved liquidity in the market for Exchange Senior Notes, which is typically associated with a larger overall issued and outstanding principal amount.