TORONTO , Oct. 14, 2025 /CNW/ - First National Financial Corporation (TSX: FN) (TSX: FN.PR.A) (TSX: FN.PR.B) ("First National") today announced its intention to issue $800 million aggregate principal amount of senior notes consisting of:

• $250 million aggregate principal amount of 4.288% Senior Series 2025-1 Notes due October 23, 2028 (the "Series 2025-1 Notes") priced at $1,000 per $1,000 principal amount,
• $300 million aggregate principal amount of 4.891% Senior Series 2025-2 Notes due October 23, 2030 (the "Series 2025-2 Notes") priced at $1,000 per $1,000 principal amount, and
• $250 million aggregate principal amount of 5.443% Senior Series 2025-3 Notes due October 25, 2032 (the "Series 2025-3 Notes", and, together with the Series 2025-1 Notes and the Series 2025-2 Notes, the "Notes") priced at $1,000 per $1,000 principal amount.

The Notes are being offered on a private placement basis in Canada pursuant to an offering memorandum in reliance upon exemptions from the prospectus requirements under applicable securities legislation. First National intends to use the net proceeds of the Notes offering to repay indebtedness, as described in further detail below, and for general corporate or partnership purposes. The Notes are offered through a syndicate of dealers co-led by TD Securities and CIBC Capital Markets, supported by RBC Capital Markets, BMO Capital Markets, Desjardins Securities, National Bank Capital Markets, Scotiabank, ATB Capital Markets and Laurentian Bank Securities.

As previously announced, the plan of arrangement of First National, pursuant to which a newly-formed acquisition vehicle controlled by private equity funds managed by Birch Hill Equity Partners Management Inc. and private equity funds managed by Brookfield Asset Management will acquire all of the outstanding common shares of First National (the "Arrangement"), is expected to be completed in October 2025. Closing of the Arrangement is currently scheduled to occur on or about October 22, 2025. The offering of the Notes is expected to close on October 23, 2025, the day after the scheduled closing date of the Arrangement.

As also previously announced, First National's currently outstanding 2.961% Series 3 Senior Unsecured Notes due November 17, 2025 (the "Series 3 Company Notes"), 7.293% Series 4 Senior Unsecured Notes due September 8, 2026 and 6.261% Series 5 Senior Unsecured Notes due November 1, 2027 (collectively, the "ExistingCompany Notes"), are required to be redeemed upon the closing of the Arrangement.

If, as currently scheduled, the Arrangement closes prior to the closing of the offering of the Notes, the Existing Company Notes will be redeemed in accordance with the Arrangement agreement and the net proceeds of the offering of Notes will be used to, among other things, repay other indebtedness. If the closing of the Arrangement is delayed and the offering of the Notes closes before closing of the Arrangement, the net proceeds of the offering will be used to, among other things, redeem the Existing Company Notes upon the closing of the Arrangement.

If the Arrangement is not consummated on or prior to April 27, 2026 (the outside date agreed to by the parties in the Arrangement agreement) or such later date as may be extended in accordance with the Arrangement agreement (the "Outside Date"), or the Arrangement agreement is terminated on or at any time prior to the Outside Date in accordance with its terms without consummating the Arrangement (each, a "Special Mandatory Redemption Event"), First National will be required to redeem the Series 2025-3 Notes in full, at a redemption price equal to 101% of the principal amount of the Series 2025-3 Notes, plus accrued and unpaid interest, if any, up to, but excluding, the date of the special mandatory redemption (a "Special Mandatory Redemption"). The Series 2025-1 Notes and Series 2025-2 Notes are not subject to the Special Mandatory Redemption.

If a Special Mandatory Redemption Event occurs, First National intends to use the net proceeds of the offering of the Notes to (i) redeem the Series 2025-3 Notes pursuant to the Special Mandatory Redemption, (ii) repay the Series 3 Company Notes upon their maturity, (iii) make a loan to First National Financial LP (the "Partnership") which will allow the Partnership to repay indebtedness under its bank credit facility, and (iv) use the balance, if any, for general corporate or partnership purposes.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About First National

First National is the parent company of the Partnership, a Canadian-based originator, underwriter and servicer of predominantly prime residential (single-family and multi-unit) and commercial mortgages. With almost $160 billion in mortgages under administration, First National is one of Canada's largest non-bank mortgage originators and underwriters. For more information, please visit www.firstnational.ca.

Forward-Looking Information

This news release contains statements that are "forward-looking information" within the meaning of applicable securities laws. In some cases, forward-looking information can be identified by the use of terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. Forward-looking statements include, among other things, statements with respect to the offering of the Notes, the Arrangement and the redemption of the Existing Company Notes, including the expected closing date and the intended use of proceeds of the offering of Notes, the expected timing of closing of the Arrangement, and the expected timing of the redemption of the Existing Company Notes. Forward-looking statements are necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by First National as of the date of this news release, are subject to inherent uncertainties, risks and changes in circumstances that may differ materially from those contemplated by the forward-looking information. Important factors that could cause actual results to differ, possibly materially, from those indicated by the forward-looking information include, but are not limited to: the possibility that the offering of the Notes, the Arrangement or the redemption of the Existing Company Notes will not be completed on the terms and conditions, or on the timing, currently contemplated, and that they may not be completed at all due to a failure to obtain or satisfy, in a timely manner or otherwise, required conditions of closing necessary to complete the offering of the Notes or the Arrangement. See also the risks and uncertainties identified under the headings "Forward-Looking Information" and "Risk Factors" in the Management Information Circular of First National dated August 27, 2025 and under the headings "Risks and Uncertainties Affecting the Business" and "Forward-Looking Information" in the First National's latest management's discussion and analysis and in other periodic filings that First National has made and may make in the future with the securities commissions or similar regulatory authorities in Canada, all of which are available under First National's SEDAR+ profile at www.sedarplus.ca. These factors are not intended to represent a complete list of the factors that could affect First National. However, such risk factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. You should not place undue reliance on forward-looking information, which speaks only as of the date of this release and is subject to change after such date. Management and First National disclaim any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required under securities laws.

SOURCE First National Financial Corporation