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Pulse Electronics Corporation Announces Closing Of Oaktree Investment

Pulse Electronics Corporation (NYSE:PULS), a leading provider of electronic components, today announced the closing of its previously announced recapitalization investment by certain affiliates of investment funds managed by Oaktree Capital Management, L.P., an affiliate of Oaktree Capital Group, LLC (NYSE:OAK).

At the closing of the recapitalization, Pulse received $75 million in cash under new Term Loan A and issued to Oaktree 36,729,183 shares of Pulse’s common stock and a warrant to purchase shares of a subsidiary that will terminate upon issuance of shares of a new class of Pulse non-voting preferred stock. The common stock issued to Oaktree, along with other common stock Oaktree already owned, represents approximately 49% of the outstanding common stock of Pulse. Additionally, Oaktree exchanged approximately $27.7 million of the company’s $50 million in outstanding 7% senior convertible notes due 2014 for new Term Loan B.

Pulse’s overall senior indebtedness increased to approximately $125 million following the recapitalization. Interest under Term Loans A and B is payable-in-kind by adding the interest to the loan balance.

Pulse used the proceeds to repay approximately $55 million outstanding under its senior credit agreement with its existing lenders and intends to use the remaining approximately $20 million for fees and expenses associated with the transactions, working capital, and general business purposes.

Ralph Faison, Pulse Chairman and Chief Executive Officer, stated, “We are very pleased to have closed this recapitalization transaction with Oaktree. The proceeds of this investment provide immediate improvement to our liquidity, address the maturity of our existing credit agreement, and significantly reduce our cash debt service costs. This investment provides Pulse with the time and resources to continue our operating initiatives and our long term growth strategy. The investment also demonstrates Oaktree’s strong belief in the fundamental market and operational strength of the company.”

The description of the terms of the recapitalization transactions contained in this press release is a summary. The company encourages you to read the full agreements which it filed as exhibits to a Current Report on Form 8-K with the Securities and Exchange Commission on November 16.

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