PHI, Inc. (The Nasdaq Select Global Market: PHII (voting); PHIIK (non-voting)) (“PHI”) announced today that it is proposing, subject to market and other conditions, to privately place (the “Debt Offering”) up to $500 million aggregate principal amount of senior secured notes due 2023 (the “2023 Notes”). Each of PHI’s existing and future domestic restricted subsidiaries are expected to guarantee the 2023 Notes. The actual amount of the 2023 Notes, if any, sold by PHI in connection with the Debt Offering will depend on market conditions. The 2023 Notes, if issued, would be secured by first priority liens, subject to certain customary exceptions, on (i) mortgages on its and its guarantor subsidiaries’ oil and gas aircraft registered in the United States, Canada and Australia, and (ii) a pledge of all of the equity interests in its wholly-owned air medical subsidiary and (iii) a pledge of 66% of the equity interests in its wholly-owned foreign affiliate that conducts its Asia-Pacific operations, as well as the proceeds and products from any and all of the foregoing.

The 2023 Notes will be offered to qualified institutional buyers pursuant to Rule 144A and to certain persons outside the United States pursuant to Regulation S, each under the Securities Act of 1933, as amended (the “Securities Act”).

PHI has not yet entered into a definitive agreement with respect to the Debt Offering, and no assurance can be given that the Debt Offering will be completed. PHI intends to use the net proceeds from the Debt Offering, together with borrowings under a new term loan that it expects to arrange and cash on hand, to:

• complete a concurrently-announced cash tender offer and consent solicitation (the “Tender Transactions”), subject to the terms and conditions described in the related documents, to purchase any and all of the $500 million aggregate principal amount of PHI’s outstanding 5.25% Senior Notes due 2019 (the “2019 Notes”), and redeem any 2019 Notes that remain outstanding following the expiration date of the Tender Transactions, including the payment of accrued interest on the 2019 Notes purchased under these transactions and all related fees and expenses; and
• fully repay and terminate PHI’s current revolving credit facility, which matures on March 7, 2019.

The 2023 Notes and the guarantees have not been, and are not expected to be, registered under the Securities Act or any state securities laws, and 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 applicable state securities laws. This press release does not constitute (i) an offer to sell or the solicitation of an offer to buy the 2023 Notes, the related guarantees or any other securities, (ii) an offer to purchase or a solicitation of an offer to sell the 2019 Notes or any other securities, or (iii) a notice of redemption of the 2019 Notes or an obligation to issue a notice of redemption under the indenture governing the 2019 Notes.

Any issuance of the 2023 Notes will be subject to obtaining credit under newly-arranged term and revolving credit facilities and certain customary closing conditions. The Debt Offering is not conditioned upon the consummation of the Tender Transactions.

This press release is issued in accordance with Rule 135c under the Securities Act.