Mr. Paul Soubry reports

NFI COMPLETING COMPREHENSIVE REFINANCING PLAN

NFI Group Inc. is in the process of completing all elements of its previously announced comprehensive refinancing plan to raise total gross proceeds of approximately $444-million, with completion of closing expected later today. All amounts shown in this press release are in U.S. dollars unless otherwise indicated.

Under the refinancing plan, NFI is:

• Completing amendments, including financial covenant waivers, to the company's existing North American senior secured credit facility and United Kingdom senior secured credit facility;
• Completing a $251.2-million permanent repayment to the secured facilities and extending their maturities to April 30, 2026;
• Completing equity financings for total gross proceeds of approximately $263.6-million through a combination of two private placements and a bought deal public offering of subscription receipts, which are being exchanged for common shares of NFI;
• Completing a $180.4-million second-lien debt financing;
• Extending the maturity of Manitoba Development Corp.'s and Export Development Canada's (EDC) senior unsecured debt facilities to April 30, 2026, and effecting a $25-million permanent repayment of the EDC facility, which was viewed as a temporary financing to support working capital.

"The completion of this refinancing plan positions NFI to capitalize on our record $6.7-billion backlog and current unprecedented market demand while remaining laser focused on operational execution," said Paul Soubry, president and chief executive officer of NFI. "Through this plan, we are improving our liquidity, strengthening our balance sheet, increasing our financial flexibility and establishing a covenant profile matched to our projected financial trajectory to the benefit of all NFI stakeholders."

The parties to the transactions of the refinancing plan have commenced the closing process, with financing expected to be initiated and received shortly. NFI intends to issue a further news release later today to confirm completion of financing and closing of the refinancing plan.

Equity financings

In connection with the refinancing plan, the company is completing:

• The previously announced private placement of an aggregate of 21,656,624 shares to certain funds and accounts managed by Coliseum Capital Management LLC at a price per share equal to $6.1567 for aggregate gross proceeds to NFI of approximately $133.3 million;
• The previously announced private placement of an aggregate of five million shares to certain funds managed and/or advised by a leading global asset manager at a price per share equal to $10.10 (Canadian), for aggregate gross proceeds to NFI of $50.5-million (Canadian) (approximately $37.3-million);
• The previously announced bought deal public offering of 15,102,950 subscription receipts at a price of $8.25 (Canadian) per subscription receipt for aggregate gross proceeds to NFI of approximately $125.9-million (Canadian) (approximately $92.9-million), inclusive of interest earned in escrow; each outstanding subscription receipt will be exchanged, for no additional consideration or action on the part of the holder, for one share, resulting in the issuance of 15,102,950 shares; the net proceeds from the subscription receipt offering will be released from escrow to NFI in accordance with their terms.

The equity financings will result in the issuance by NFI of a total of 41,759,574 new shares for aggregate gross proceeds to NFI of approximately $263.6-million. Following completion of the equity financings, Coliseum will become NFI's largest shareholder, with a total ownership interest of approximately 26.2 per cent. NFI expects that the subscription receipts will be halted from trading and delisted from the Toronto Stock Exchange after the close of markets today and that the shares issued in exchange for the subscription receipts will immediately commence trading on the TSX.

Second-lien financing

As part of the refinancing plan, NFI worked with its financial adviser, BMO Capital Markets, to execute a broad investor solicitation process for a second-lien financing and held detailed discussions with multiple interested investors.

NFI's board of directors and its advisers received and thoughtfully reviewed several financing proposals. In its review, the board evaluated each proposal's financial terms, prepayment flexibility, and the ability to consummate a transaction with certainty and in a timely manner. Following this review process, the board unanimously approved a $180.4-million second-lien financing with Coliseum.

Adam Gray, managing partner and co-founder of Coliseum, who also serves as a director on the board, recused himself from all matters related to the refinancing plan starting in late February, 2023, and was absent from all board meetings where the refinancing plan was discussed, including the review of proposed equity and debt financing solutions.

Terms of the completed $180.4-million second-lien financing include the following:

• A five-year term and a 97-per-cent original issue discount (OID), generating net proceeds of $175-million, before fees and commissions;
• Annual coupon of 14.5 per cent, payable semi-annually;
• Non-callable for the first 12 months, callable at 106 per cent of face value for months 13 to 24, callable at 103 per cent of face value for months 25 to 36 and callable at par from 36 months onward.

The second-lien financing is a senior secured second-lien obligation of NFI and its material subsidiaries, which will rank behind the secured facilities and all other first-lien secured indebtedness of NFI and such subsidiaries, rank ahead of any subordinated obligations of NFI and its subsidiaries, and, by virtue of being secured, rank ahead of any unsecured obligations.

"This significant investment builds upon our longstanding commitment to NFI and underscores the tremendous upside potential we see in the company's future," commented Mr. Gray. "The refinancing plan provides NFI with the runway and flexibility required to capitalize on the strong market tailwinds in public transportation and the transition to zero-emission mobility while allowing management to remain focused on operational excellence, innovation, customized manufacturing and unparalleled customer service. We are excited to support Paul and the entire NFI team as they continue to execute on a strategic plan that we are confident will maximize value for all NFI shareholders."

"On behalf of the board, I would like to express gratitude to the company's banking partners, debtholders, shareholders, employees, customers and suppliers for their support throughout this process," said Wendy Kei, chair of NFI's board. "The board, following detailed reviews and consultation with our financial and legal advisers, feels that the refinancing plan offers the best solutions for NFI and demonstrates the strong support of its shareholders. With the completion of the plan, we will focus on advancing the progress displayed with our second quarter results, furthering our business's long-term sustainability objectives and driving profitable financial growth."

Improvements to liquidity and changes to secured facilities

Through the refinancing plan, NFI will add approximately $136.8-million of additional liquidity as outlined in an attached table.

Through the refinancing plan, the following changes to the profile and capacity of the secured facilities are being effected:

• The $1-billion revolving North American facility is converting to a $400-million first-lien term loan and a $361-million first-lien revolving credit facility (total combined borrowing capacity of $761-million);
• The 40-million-British-pound revolving United Kingdom facility is converting to a 16-million-British-pound term loan and a 14.4-million-British-pound revolving credit facility (total combined borrowing capacity of 30.4 million British pounds).

The updated monthly and quarterly covenants under the secured facilities will be as shown in an attached table.

Total net debt to capitalization (TNDC) is calculated as borrowings on the secured facilities and any senior unsecured or second-lien indebtedness, less unrestricted cash and cash equivalents up to a maximum of $50-million, divided by shareholder equity, as shown on the company's balance sheet, plus borrowings on the secured facilities. The TNDC covenant excludes the impact of any actual goodwill writedowns up to a maximum of $100-million.

The minimum adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) covenant is first tested with the month ending Sept. 30, 2023, but includes results from the period May 1, 2023, to Sept. 30, 2023. The covenant continues on a cumulative basis until April 30, 2024, at which point it becomes a trailing-12-month test for the second quarter of 2024. The minimum adjusted EBITDA tests are based on calendar month-end dates from September, 2023, to March, 2024.

Liquidity is calculated as unrestricted cash and cash equivalents plus the aggregate amount of credit available under the secured facilities.

Senior secured net leverage will include the secured facilities and is calculated as indebtedness on those facilities, less unrestricted cash and cash equivalents up to a maximum of $50-million, divided by adjusted EBITDA (calculated on a trailing-12-month basis). When reintroduced in Q3 2023, adjusted EBITDA will be based on a trailing-12-month basis.

Total leverage ratio (TLR) is calculated as aggregate indebtedness of the company not including the company's 5.0 per cent convertible debentures and certain non-financial products, but including any senior unsecured or second-lien indebtedness, less unrestricted cash and cash equivalents up to a maximum of $50-million, divided by adjusted EBITDA (calculated on a trailing-12-month basis). When the TLR is reintroduced in Q3 2024, adjusted EBITDA will be based on a trailing-12-month basis.

Interest coverage ratio (ICR) is calculated as the same trailing-12-month adjusted EBITDA as the total leverage ratio divided by trailing-12-month interest expense on the secured facilities, the company's 5.0 per cent convertible debentures, any senior unsecured or second-lien indebtedness, and other interest and bank charges.

BMO acted as NFI's lead financial adviser in respect of the refinancing plan and agent on the Coliseum private placement and Torys LLP was NFI's legal adviser.

Bank of Nova Scotia is the administrative agent for the North American facility, and Bank of Nova Scotia, BMO Capital Markets and National Bank Financial Inc. are the joint bookrunners. The North American facility syndicate also includes Canadian Imperial Bank of Commerce; Bank of America, Canada branch; Wells Fargo Bank, North America, Canadian branch; Toronto Dominion Bank; HSBC Bank Canada; Export Development Canada; ATB Financial; and ICICI Bank Canada.

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

Multilateral Instrument 61-101 matters

The second-lien financing constitutes a related party transaction for purposes of MI 61-101, Protection of Minority Security Holders in Special Transactions, as Coliseum, through the funds and accounts that it manages, owns, controls or directs, greater than 10 per cent of the outstanding shares. The second-lien financing was reviewed and unanimously approved by the board (excluding Mr. Gray). The second-lien financing, which is not convertible into securities of NFI, is exempt from the minority approval requirements under Section 5.7(1)(f) of MI 61-101 because the second-lien financing is on reasonable commercial terms that are not less advantageous to NFI than alternative second-lien financings that may have been available at the time that terms were agreed with Coliseum. Furthermore, a formal valuation is not required under MI 61-101 as the second-lien financing is not the type of related party transaction that requires a formal valuation.

Further details will be included in a material change report to be filed by the company. Such material change report has not been filed 21 days before the entering into of the second-lien financing as the terms thereof were only recently finalized and approved by all parties.

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 (motorcoaches), Alexander Dennis Ltd. (single-deck and double-deck buses), Plaxton (motorcoaches), 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 shares trade on the Toronto Stock Exchange under the symbol NFI and its convertible debentures trade on the TSX under the symbol NFI.DB.

We seek Safe Harbor.