EXCO Resources Inc.

Issued $300 million in senior secured 1.5 lien notes due March 20, 2022 to affiliates of Fairfax Financial Holdings Ltd., Energy Strategic Advisory Services LLC (ESAS), Oaktree Capital Management LP and an unaffiliated investor. Proceeds from the issuance repaid the outstanding amount under EXCO's credit agreement, transaction fees and expenses, and general corporate purposes. The credit agreement was amended, reducing the borrowing base to $150 million, permitting the notes and loans issuance and modifying certain financial covenants. About $683 million of senior secured second-lien term loans due October 26, 2020, were exchanged for a like amount of senior secured 1.75 lien term loans due October 26, 2020. CEO and President Harold L. Hickey said that the capital is supporting Haynesville Shale operations. In the exchange, affiliates of Fairfax purchased about $151 million aggregate principal amount of the 1.5 lien notes and exchanged about $412 million aggregate principal amount of the second-lien term loans for a like amount of the 1.75 lien term loans. Affiliates of Fairfax are current beneficial owners of 9.9% of EXCO's common shares. Samuel A. Mitchell, an EXCO board member, is a managing director of Hamblin Watsa Investment Counsel Ltd., the investment manager of Fairfax and certain affiliates thereof. ESAS purchased about $70 million of the 1.5 lien notes and exchanged about $48 million of the second-lien loans. ESAS is owned by Bluescape Energy Recapitalization and Restructuring Fund III LP, which is directed by its general partner, Bluescape Energy Partners III GP LLC and is the current beneficial owner 6.6% of EXCO's common shares. Charles John Wilder, executive chairman of EXCO's board, is the sole manager of Bluescape. Affiliates of Oaktree purchased about $40 million of the 1.5 lien notes. Affiliates of Oaktree are the current beneficial owners of 11% of EXCO's common shares, and B. James Ford, an EXCO board member, is a senior adviser of Oaktree. A special committee of the board of directors consisting of the sole disinterested member approved these transactions.