CapitalSource to Repurchase Convertible Notes Due July 15, 2037 Upon Election of Holders

CapitalSource Inc. CSE today announced that each holder (each, a "Holder") of its 7.250% Senior Subordinated Convertible Notes due 2037, CUSIP No. 14055X AG 7 (the "Notes") has the right to surrender his or her Notes for repurchase. At the option of each Holder (the "Put Option"), the Company must repurchase all or a portion of the Notes on July 15, 2012 (the "Repurchase Date"), for a repurchase price (the "Repurchase Price") in cash equal to $1,000 per $1,000 principal amount of Notes validly surrendered for repurchase, plus any accrued and unpaid interest up to but excluding the Repurchase Date (the "Repurchase"). Because the Repurchase Date is an interest payment date, interest accrued up to July 15, 2012 will be paid to holders of record of the Notes as of July 1, 2012 and we expect that there will be no accrued and unpaid interest due as part of the Repurchase Price. Because July 15, 2012 is a Sunday, the Put Option will expire and the Company will repurchase Notes with respect to which the Put Option is exercised on the next business day, July 16, 2012, in accordance with the terms of the indenture governing the Notes. Holders may surrender their Notes from June 15, 2012 until 5:00 p.m., New York City time, on July 16, 2012 (the "Expiration Date"). If all outstanding Notes are surrendered for repurchase, the aggregate Repurchase Price will be approximately $23,228,000. None of the Company, its board of directors, or its employees has made or is making any representation or recommendation to any Holder as to whether to exercise or refrain from exercising the Put Option.
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