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Cash Store Financial Announces Proposed Offering Of CDN$125 Million Senior Secured 5 Year Notes

EDMONTON, Jan. 12, 2012 /PRNewswire/ - The Cash Store Financial Services Inc. ("Cash Store Financial" or the "Company") (TSX: CSF) (NYSE: CSFS) today announced that it intends to offer up to CDN$125 million aggregate principal amount of Senior Secured Notes due 2017 (the "Notes").  The interest rate and other terms of the Notes will be determined in the context of the market. Cash Store Financial will use the proceeds of the Notes to purchase loans receivable assets from the Company's current third-party lenders, for general corporate purposes and to pay fees and expenses.

Mr. Gordon Reykdal, Chairman and CEO commented: "We believe that this transaction will financially benefit the Company as it will allow us to transition from a broker model to an on balance sheet direct lending model in those jurisdictions that are regulated. This transition is expected to have many benefits, including access to lower-cost capital and committed funding. The financial flexibility offered by the Notes will support future loan growth associated with the maturing of our branches and our expansion plans."

The Notes will be offered and sold in Canada on a private placement basis pursuant to certain prospectus exemptions and will not be registered or qualified by prospectus under any securities legislation. The Notes will be offered and sold in the United States only to qualified institutional buyers in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the "Securities Act"), and outside the United States to persons other than U.S. persons in reliance on Regulation S under the Securities Act. The offer and sale of the Notes will not be registered under the Securities Act and the Notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws.

The Notes will be subject to resale and transfer restrictions in accordance with applicable securities legislation.

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