CPI Card Group Inc. Announces Proposed Private Offering of $310 Million of Senior Secured Notes

CPI Card Group Inc. (OTCQX: PMTS; TSX: PMTS) (“CPI” or the “Company”) today announced the commencement of a private offering by its wholly-owned subsidiary, CPI CG Inc. (the “issuer”), of $310 million aggregate principal amount of senior secured notes due 2026 (the “notes”). The offering is subject to market and other conditions, and there is no assurance that the offering will be completed or, if completed, the terms on which it will be completed.

The issuer intends to use the net proceeds from the offering, together with cash on hand and initial borrowings under a $50 million secured asset based revolving credit facility that it expects to enter into concurrently with the issuance of the notes (the “ABL revolver”), to repay in full and terminate its existing credit facilities and to pay related fees and expenses. There is no assurance that the issuer will be able to enter into the ABL revolver simultaneously with the issuance of the notes or at all.

The notes are expected to be general senior secured obligations of the issuer and guaranteed by the Company and certain of its current and future wholly-owned domestic subsidiaries (other than the issuer) that will guarantee the ABL revolver, and will be secured by substantially all of the assets of the issuer and the guarantors, subject to customary exceptions.

The notes and related guarantees will be offered only to persons reasonably believed to be qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), or outside the United States to certain non-U.S. persons in compliance with Regulation S under the Securities Act. The issuance and sale of the notes and related guarantees have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction, and the notes and related guarantees 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 other applicable securities laws.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the notes and related guarantees. Any offers of the notes and related guarantees will be made only by means of a private offering memorandum, and are not being made to any person in any jurisdiction in which such offer, sale or solicitation is unlawful.