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Press release from GlobeNewswire (a Nasdaq OMX company)

CapitalSource to Repurchase Convertible Notes Due July 15, 2037 Upon Election of Holders

Friday, June 15, 2012

CapitalSource to Repurchase Convertible Notes Due July 15, 2037 Upon Election of Holders05:00 EDT Friday, June 15, 2012LOS ANGELES, June 15, 2012 (GLOBE NEWSWIRE) -- CapitalSource Inc. (NYSE:CSE) today announced that each holder (each, a "Holder") of its 7.250% Senior Subordinated Convertible Notes due 2037, CUSIP No. 14055X AG 7 (the "Notes") has the right to surrender his or her Notes for repurchase. At the option of each Holder (the "Put Option"), the Company must repurchase all or a portion of the Notes on July 15, 2012 (the "Repurchase Date"), for a repurchase price (the "Repurchase Price") in cash equal to $1,000 per $1,000 principal amount of Notes validly surrendered for repurchase, plus any accrued and unpaid interest up to but excluding the Repurchase Date (the "Repurchase"). Because the Repurchase Date is an interest payment date, interest accrued up to July 15, 2012 will be paid to holders of record of the Notes as of July 1, 2012 and we expect that there will be no accrued and unpaid interest due as part of the Repurchase Price. Because July 15, 2012 is a Sunday, the Put Option will expire and the Company will repurchase Notes with respect to which the Put Option is exercised on the next business day, July 16, 2012, in accordance with the terms of the indenture governing the Notes. Holders may surrender their Notes from June 15, 2012 until 5:00 p.m., New York City time, on July 16, 2012 (the "Expiration Date"). If all outstanding Notes are surrendered for repurchase, the aggregate Repurchase Price will be approximately $23,228,000. None of the Company, its board of directors, or its employees has made or is making any representation or recommendation to any Holder as to whether to exercise or refrain from exercising the Put Option. To exercise the Put Option, Notes must be surrendered to the trustee through the transmittal procedures of the Depository Trust Company no later than 5:00 p.m., New York City time, on the Expiration Date. Holders whose Notes are held by a broker, dealer, commercial bank, trust company or other nominee must contact such nominee if such Holder desires to surrender such Holder's Notes and instruct such nominee to surrender the Notes on the Holder's behalf. The Holders may withdraw any Notes previously surrendered for repurchase at any time prior to 5:00 p.m., New York City time, on the Expiration Date.  The Company will file a Tender Offer Statement on Schedule TO with the Securities and Exchange Commission. The Company will make available to the Holders of the Notes, through the Depository Trust Company and the trustee, the Company's "Notice to Holders of 7.250% Senior Subordinated Convertible Notes due 2037," dated June 15, 2012, specifying the terms, conditions and procedures for exercising the Put Option (the "Repurchase Notice"). Note Holders are encouraged to read the Repurchase Notice carefully before making any decision with respect to the surrender of the Notes, because it contains important information regarding the details of the Repurchase. If any Notes remain outstanding following the close of the tender offer, the Company will redeem all of the remaining Notes on July 20, 2012 (the "Redemption Date") at a redemption price equal to $1,000 per $1,000 principal amount thereof, plus accrued and unpaid interest to, but excluding, the Redemption Date, in accordance with the terms of the indenture governing the Notes (the "Redemption"). The Company will make available to the Holders of the Notes, through the Depository Trust Company and the trustee, the Company's "Notice of Redemption to the Holders of the 7.250% Senior Subordinated Convertible Notes due 2037 of CapitalSource Inc.," dated June 15, 2012, setting forth information regarding the details of the Redemption. This press release is for informational purposes only and does not constitute an offer to purchase the Notes. The offer to repurchase is made solely by the Company's Repurchase Notice.About CapitalSource CapitalSource Inc. (NYSE:CSE), through its wholly owned subsidiary, CapitalSource Bank, provides commercial loans to small and middle market businesses nationwide and offers depository products and services in southern and central California. CapitalSource, headquartered in Los Angeles, had total assets of $8.3 billion and total deposits of $5.3 billion as of March 31, 2012. For more information about CapitalSource, visit www.capitalsource.com.CONTACT: Investor Relations: Dennis Oakes Senior Vice President, Investor Relations & Corporate Communications (212) 321-7212 doakes@capitalsource.com Media Relations: Michael Weiss Director of Communications (301) 841-2918 mweiss@capitalsource.com