Mr. Stephen King reports

NFI ANNOUNCES COMPREHENSIVE REFINANCING PLAN THAT INCLUDES CREDIT APPROVED, AMENDED THREE-YEAR SENIOR CREDIT FACILITIES, A $150-million EQUITY ISSUANCE, AND A $200 TO $250-million SECOND LIEN DEBT FINANCING

NFI Group Inc. is working to complete a comprehensive refinancing plan to improve financial flexibility, strengthen its balance sheet, and best position the company to capitalize on the historic demand for its products and expected financial recovery. All amounts shown in this press release are in U.S. dollars unless otherwise indicated.

Under the proposed plan, NFI will amend its existing senior secured credit facilities, extend its senior unsecured debt facilities with the government of Manitoba and Export Development Canada (EDC), and raise additional funds through the sale of new common shares and a second lien debt financing.

Amendments to the company's credit facilities

NFI has received confirmation of credit approval from its banking partners for proposed amendments to the company's existing North American senior secured credit facility and its senior secured U.K. credit facility.

Details of the proposed amendments to the secured facilities include the following:

• The $1.0-billion revolving North American facility will convert to a $400-million first lien term loan and a $361-million first lien revolving credit facility (total combined borrowing capacity of $761-million), and the maturity date will be extended from Aug. 2, 2024, to April 30, 2026.
• The 40-million-pound revolving U.K. facility will convert to a 16-million-pound term loan and a 15-million-pound revolving credit facility (total combined borrowing capacity of 31 million pounds), and the maturity date will be extended from June 30, 2023, to April 30, 2026.
• The first lien security interest granted to the lenders under the secured facilities will cover all present and future assets of NFI and its subsidiaries (including mortgages on select owned manufacturing facilities).
• New financial covenants (outlined below) will be in place during the term of the secured facilities, providing NFI with significant flexibility as the company continues with its expected financial recovery.
• The amendments to the secured facilities are subject to negotiation of binding documentation and several precedent conditions, including the planned equity sale and second lien debt financing described below. It is possible that certain details relating to the secured facilities described herein could change as the documentation relating to those facilities are finalized.

The government of Manitoba and EDC have also both confirmed their intention to extend the maturity of their respective $50-million and $50-million senior unsecured debt facilities to April 30, 2026. EDC has also made available a $100-million guarantee facility to support NFI's surety and performance bonding requirements for new vehicle contracts.

As all of the financing transactions are mutually conditional, NFI expects to close all components of the plan at the same time and is targeting completion prior to June 25, 2023. The company will provide additional details and file the material documents on SEDAR once finalized. However, there can be no assurance that the financing transactions will be completed on the expected terms or at all. On June 25, 2023, the company's current financial covenant waivers under the secured facilities expire and the U.K. facility matures. Therefore, if the financing transactions are not completed on or before such date, the company will need to obtain further extensions, which cannot be assured.

Equity issuance and second lien debt financing

With a proposed decrease in the total borrowing capacity under the amended secured facilities and to support additional liquidity requirements, NFI plans to raise proceeds of $150-million of equity capital through the sale of new common stock, and to raise total gross proceeds of between $200-million and $250-million from a second lien debt financing. The second lien debt financing is expected to be on customary market terms for an issuer in these circumstances, which will be finalized during the marketing process.

NFI has held detailed discussions with several parties which have expressed significant interest in participating in the equity sale and second lien debt financing. BMO Capital Markets is acting as the company's financial adviser related to these matters. NFI expects to announce additional details on the planned equity and second lien debt financing in the near term.

"The announcement of today's refinancing plan is a critical step towards providing NFI with financial flexibility, improved liquidity and long-term visibility, as we continue to execute on our operational and financial recovery. The planned equity and second lien debt financing are expected to lower our overall debt balances and significantly improve liquidity," said Pipasu Soni, chief financial officer, NFI. "Our business is benefiting from record backlog and demand for our products and services, and we are looking forward to completing these financing transactions so we can place our full attention on delivering the growth in revenue, gross margins, free cash flow and [return on invested capital] that we expect from achieving our targets, including $400-million of adjusted EBITDA by 2025."

Anticipated financial covenants under the amendments

NFI partnered with banking syndicate members under the secured facilities to develop revised financial covenants (including a waiver of leverage tests through to 2024 Q3) under the proposed amendments that are based on financial projections that utilize a conservative downside as compared with NFI's internal financial objectives. Based on its expected financial performance, NFI is confident that it will be able to comply with the new proposed covenants, and that there is significant space between covenant levels and expected results. Details are provided in the attached table.

Adjusted EBITDA, free cash flow, ROIC and liquidity are non-IFRS (international financial reporting standards) measures.

The Bank of Nova Scotia is the administrative agent for the North American facility, and the Bank of Nova Scotia, BMO Capital Markets and National Bank Financial Inc. are the joint bookrunners. The North American facility syndicate also includes the Canadian Imperial Bank of Commerce; Bank of America, Canada branch; Wells Fargo Bank N.A., Canadian branch; Toronto Dominion Bank; HSBC Bank Canada; Export Development Canada; and ICICI Bank Canada. ATB Financial is expected to join the North American facility syndicate in replacement of MUFG Bank Ltd., Canada branch, upon execution of the amended agreements and has also confirmed its credit approval.

For the U.K. facility, HSBC U.K. acts as administrative agent, and HSBC U.K. and the Bank of America, Canada branch, are the two co-lenders and mandated lead arrangers.

About NFI Group Inc.

Leveraging 450 years of combined experience, NFI is leading the electrification of mass mobility around the world. With zero-emission buses and coaches, infrastructure, and technology, NFI meets today's urban demands for scalable smart mobility solutions. Together, NFI is enabling more livable cities through connected, clean and sustainable transportation.

With 7,700 team members in 10 countries, NFI is a leading global bus manufacturer of mass mobility solutions under the brands New Flyer (heavy-duty transit buses), MCI (motor coaches), Alexander Dennis Ltd. (single and double-deck buses), Plaxton (motor coaches), ARBOC (low-floor cutaway and medium-duty buses), and NFI Parts. NFI currently offers the widest range of sustainable drive systems available, including zero-emission electric (trolley, battery and fuel cell), natural gas, electric hybrid, and clean diesel. In total, NFI supports its installed base of over 100,000 buses and coaches around the world. NFI's common shares trade on the Toronto Stock Exchange (TSX) under the symbol NFI, and its convertible debentures trade on the TSX under the symbol NFI.DB.

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