First Investors Finalizes Credit Facilities Renewal

HOUSTON, Jan. 12 /PRNewswire-FirstCall/ -- First Investors Financial Services
Group, Inc. announced today that it had completed the renewal of its two
senior warehouse credit facilities along with its working capital line of
credit that were scheduled to mature on February 11, 2009. The facilities
were renewed effective December 31, 2008 and are now scheduled to mature on
December 29, 2009. The renewals covered the Company's $95 million bank
warehouse facility, its $350 million commercial paper conduit facility and its
$28.5 million working capital line of credit. Under the terms of the bank
warehouse line renewal, the Company is electing to reduce the commitment
amount from $95 million to $76 million and will utilize a portion of the
excess cash flow from the receivables pledged to the facility to build
additional credit enhancement. Pricing remained unchanged at the London
Interbank Offered Rate (Libor) plus 3%. Under the terms of the commercial
paper conduit facility renewal, the commitment amount will remain at $350
million but amounts borrowed under the facility will be based on the Libor
index rather than prevailing rates for asset-based commercial paper. The
borrowing spread will increase from a weighted average rate of 0.79% to 2.00%
and the Company will utilize a portion of the excess cash flow from the
underlying receivables pool to build additional credit enhancement. Under the
terms of the working capital facility renewal, the available commitment will
be reduced from $28.5 million to approximately $20 million which reflects the
current outstanding borrowings. The outstanding $20 million balance will be
converted to a term loan which is scheduled to amortize to a minimum of $16.5
million by September 2009 based on a portion of excess cash flow collected
from the underlying receivables portfolio. The borrowing spread will be
increased from Libor plus 4.75% to Libor plus 8%, and the current $2 million
cash reserve will be reduced to $1 million with the remainder utilized to
reduce the outstanding balance of the facility. The Company also agreed to
pledge additional unencumbered assets, specifically receivables and cash flows
associated with the Company's equity interest in an unconsolidated subsidiary,
to provide additional security to the facility.

As an additional requirement, the Company must raise a minimum of $500,000 in
additional capital on or prior to March 22, 2009, which may be in the form of
common or preferred stock or a long-term subordinated note. The form of the
offering and relevant terms are still being analyzed though the Company has
received a non-binding commitment for the additional capital and is confident
that the additional capital can be raised on satisfactory terms.

Finally, the Company has also announced that, on December 31, 2008, it retired
its $5 million dollar 12.75% senior subordinated note issue due 2017,
utilizing a short-term bridge funding under its working capital facility which
will be repaid upon the release of certain reinsurance reserves held by the
Company's captive reinsurance subsidiary. Previously, these reinsurance
reserves and a default insurance policy had provided credit enhancement under
the Company's bank warehouse line. With this change, enhancement for the
facility will convert to a more traditional combination of cash reserves and
overcollateralization.

As a result of the modification to the commitment levels under the bank
warehouse line and working capital facility as well as the prepayment of the
12.75% senior subordinate notes, the Company expects to report a non-cash
expense of $362,000 (pre-tax) related to unamortized deferred cost for its
third fiscal quarter ending January 31, 2009.

Tommy A. Moore, Jr., President and CEO stated, "We are extremely pleased to
complete the renewal of our primary credit facilities for an additional year
in a very challenging credit environment. While our credit spreads have
increased and we will be deleveraging our portfolio through an increase in our
total enhancement levels, this deleveraging will occur on an orderly basis and
at a level that we believe we can accommodate at our current cash flow levels.
Further, by moving our $350 million warehouse line from a commercial
paper-based funding to a Libor-based funding, we expect to pick up a
significant amount of funding efficiency based on the difference in index
rates. As mentioned, we will be raising approximately $500,000 in additional
capital which we expect to finalize by early March. The renewal of these
facilities allows First Investors warehouse capacity to fund its new loan
originations over the coming year at levels we consider prudent in the current
economic environment."

First Investors is a specialized consumer finance company engaged in the
origination and retention of automobile finance receivables originated from
franchised automobile dealers and directly with consumers in connection with
the sale or refinance of new and late-model used vehicles. The Company is
headquartered in Houston, Texas and operates in 28 states.

The statements contained in this release, which are not historical statements
of fact, may constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Any such forward-looking
statements involve a number of risks and uncertainties. The actual results of
future events could differ materially from those stated in any forward-looking
statements herein.

SOURCE First Investors Financial Services Group, Inc.

Bennie H. Duck, +1-713-273-5116, for First Investors Financial Services Group,
Inc.