CHEVY CHASE, Md., July 7 /PRNewswire-FirstCall/ -- CapitalSource Inc. (NYSE: CSE) today announced that lenders holding $778 million of indebtedness under its $900 million senior secured syndicated bank facility (the 'Facility') have consented to amend and extend the Facility as follows:

• The maturity date for $778 million of the Facility will be extended until March 31, 2012 upon satisfaction of certain payment conditions as described below
• The extending lenders will receive, in aggregate, a $200 million payment unless they are required to share their collateral with a new financing source, in which event they will receive a $300 million payment
• Lenders under the Facility who do not execute the extension will not receive any payment currently, and all amounts owing to them will continue to be due by the current maturity date of the Facility - March 13, 2010
• Upon closing, the Facility covenants will be amended to be more consistent with the asset-based structure of the Facility

To satisfy the extension payment conditions, CapitalSource expects to utilize proceeds of a senior secured bond offering, available cash and/or other forms of financing.

'Following the successful renewal and/or payoff of our five non-recourse credit facilities earlier this year, we are particularly pleased to quickly renew and extend our syndicated bank facility which involved negotiation with 22 banks,' said John K. Delaney, CapitalSource Chairman and CEO.

Commenting on the amendment, CapitalSource CFO Donald F. Cole said, 'We view this as a very attractive amendment for the Company, because it accomplishes our stated goal of extending the terms of our credit facilities to better match the duration of our assets. In addition, we believe this extension should put to rest concerns about liquidity challenges that have resulted from the previously annual renewals of our credit facilities.'

'The receipt of consent for this amendment from our Facility lenders is evidence of the productive and cooperative working relationship we have with the syndicate banks,' added CapitalSource Treasurer, Jeffrey Lipson. 'We expect to fully repay the Facility by the end of the newly extended term.'

This press release does not constitute an offer of securities for sale.

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CapitalSource Inc.