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Press release from Marketwire

Medical Facilities Corporation Announces $38 Million Offering of Convertible Debentures

Monday, December 03, 2012

Medical Facilities Corporation Announces $38 Million Offering of Convertible Debentures16:43 EST Monday, December 03, 2012TORONTO, ONTARIO--(Marketwire - Dec. 3, 2012) -NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATESMedical Facilities Corporation ("Medical Facilities") (TSX:DR) today announced that it has entered into an agreement with a syndicate of underwriters led by National Bank Financial Inc. to sell to the public, on a bought deal basis, $38 million principal amount of convertible unsecured subordinated debentures (the "Debentures") at a price of $1,000 per Debenture (the "Offering"). The net proceeds from the sale of the Debentures will be used to reduce indebtedness under Medical Facilities' credit facility, including indebtedness recently incurred to acquire a 51% interest in Arkansas Surgical Hospital, L.L.C., and for general corporate purposes.The Debentures bear an interest rate of 5.90% per annum payable semi-annually in arrears on June 30 and December 31 in each year commencing on June 30, 2013, and will mature on December 31, 2019 (the "Maturity Date"). The Debentures will be convertible at the holder's option into shares of Medical Facilities (the "Common Shares") at any time prior to the earlier of the Maturity Date and the date fixed for redemption at a conversion price of $19.11 per share (the "Conversion Price"), being a ratio of approximately 52.3286 Common Shares per $1,000 principal amount of Debentures. The closing price of the Common Shares on the TSX on November 30, 2012, the last trading day prior to the announcement of the offering, was $13.85. The Debentures are not redeemable prior to December 31, 2015. On and after December 31, 2015 and prior to December 31, 2017 the Debentures are redeemable at par provided that the market price for the Common Shares prior to the date of notice of redemption is not less than 125% of the Conversion Price. On and after December 31, 2017, the Debentures will be redeemable at par. Closing of the Offering is expected to occur on or about December 21, 2012. The Offering is subject to normal regulatory approvals, including approval of the Toronto Stock Exchange. The Debentures will be offered in all provinces and territories of Canada.The Debentures and the underlying Common Shares have not been and will not be registered under the United States Securities Act of 1933 and accordingly will not be offered, sold or delivered, directly or indirectly within the United States, its possessions and other areas subject to its jurisdiction or to, or for the account or for the benefit of a U.S. person, except pursuant to applicable exemptions from the registration requirements. About Medical Facilities Corporation Medical Facilities owns controlling interests in five specialty surgical hospitals located in South Dakota, Arkansas and Oklahoma, as well as an ambulatory surgery center in California. The specialty hospitals perform scheduled surgical, imaging, diagnostic and other procedures, including primary and urgent care, and derive their revenue from the fees charged for the use of their facilities. The ambulatory surgery center specializes in outpatient surgical procedures, with patient stays of less than 24 hours. Medical Facilities is structured so that a majority of its free cash flow from operations is distributed to the holders of its Common Shares in the form of dividends. For more information, please visit www.medicalfacilitiescorp.ca. Caution Concerning Forward-Looking Statements Statements made in this news release, other than those concerning historical financial information, may be forward-looking and therefore subject to various risks and uncertainties. Some forward-looking statements may be identified by words like "may", "will", "anticipate", "estimate", "expect", "intend", or "continue" or the negative thereof or similar variations. Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements. Factors that could cause results to vary include those identified in Medical Facilities' filings with Canadian securities regulatory authorities such as legislative or regulatory developments, intensifying competition, technological change and general economic conditions. All forward-looking statements presented herein should be considered in conjunction with such filings. Medical Facilities does not undertake to update any forward-looking statements; such statements speak only as of the date made.FOR FURTHER INFORMATION PLEASE CONTACT: Contact Information: Medical Facilities Corp.Michael SalterChief Financial Officer(416) 848-7380 or 1-877-402-7162www.medicalfacilitiescorp.caTMX EquicomSalvador DiazInvestor Relations(416) 815-0700 or 1-800-385-5451 ext. 242