PACIFIC & WESTERN CREDIT CORP. ANNOUNCES AMENDMENT TO PREVIOUSLY ANNOUNCED EQUITY FINANCING

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

LONDON, ON, May 4 /CNW/ - Pacific & Western Credit Corp (TSX: PWC) (the "Corporation" or "PWC") is pleased to announce that further to the April 28, 2011 announcement regarding a marketed public offering (the "Offering"), it now has entered into an underwriting agreement for an initial amount of $15 million with an opportunity for existing shareholders to subscribe for up to an additional $15 million.  If the Offering is fully subscribed, including the Over-Allotment Option described below, total gross proceeds to the Corporation would be approximately $35 million.

PWC has entered into an underwriting agreement with a syndicate of underwriters led by Canaccord Genuity Corp. and including Scotia Capital Inc., Industrial Alliance Securities Inc. and PI Financial Corp. (the "Underwriters").  Pursuant to the agreement, the Underwriters have agreed to purchase on an underwritten basis 6,666,667 units (the "Underwriter Units") of the Corporation at a price of C$2.25 per Unit (the "Offering Price") for aggregate gross proceeds of C$15 million. Each Underwriter Unit consists of one common share in the capital of the Corporation (a "Common Share") and one-half of one common share purchase warrant (each whole warrant, a "Warrant").  Each Warrant will entitle the holder thereof to acquire, for a period of 18 months following the closing date of the Offering, one Common Share at a price of C$2.80, representing a premium of approximately 25% to the Offering Price.

In addition, current shareholders of the Corporation may purchase up to 6,666,667 units (the "Remaining Units") at the same price and having the same structure as the Underwriter Units, for aggregate gross proceeds of up to C$15 million.  Any Remaining Units that are not purchased by the current shareholders prior to noon on May 20, 2011 may be purchased by the Underwriters and reallocated.  The prospectus related to the Offering will be mailed to the current shareholders and will provide instructions to them about how they can participate in the Offering.

In addition, the Corporation has granted to the Underwriters an option (the "Over-Allotment Option") exercisable in whole or in part at any time within 30 days after the closing date of the Offering, to purchase up to an additional 2,000,000 Underwriter Units (the "Additional Units") at a price of $2.25 per Additional Unit, including up to an additional 1,000,000 Warrants (the "Additional Warrants").  The Additional Warrants can be purchased pursuant to the Over-Allotment Option independent of the Additional Units at a price of $0.22 per Additional Warrant.

In connection with the Offering, a preliminary short form prospectus has been filed in each of the provinces and territories of Canada other than Quebec.  The Corporation will file an amended and restated preliminary prospectus in each of the provinces and territories of Canada other than Quebec to reflect the specific offering terms.

The Corporation plans to use a majority of the net proceeds of the Offering to reduce the consolidated debt of the Corporation.  This debt was used to provide regulatory capital to the Corporation's wholly-owned subsidiary, Pacific & Western Bank of Canada ("PWBank"), to fund its operations. The Corporation plans to use the remaining net proceeds of the Offering to provide additional regulatory capital in PWBank and for working capital purposes in the Corporation.

The Offering is expected to close on or about May 25, 2011 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the Toronto Stock Exchange and other securities regulatory authorities.

PWBank, a Canadian Schedule I chartered bank, is a branchless financial institution. It specializes in providing financing throughout Canada to well established corporations and government entities, including hospitals, school boards, universities and colleges, municipalities, provinces and territories, and federal government agencies.

Investor Relations: Wade MacBain, Director (800) 244-1509, wadem@pwbank.com

Public Relations & Media: Tel Matrundola, Vice-President, (866) 787-9936, telm@pwbank.com

To receive PWC news releases, please contact: Carla McPhee at carlam@pwbank.com, (519) 675-4204


SOURCE Pacific

For further information:

Please visit our website at: http://www.pwbank.com

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Pacific & Western Credit Corp.

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