Details of Prepayment Policy Applicable to Debentures Held by the Municipal Financing Corporation of Saskatchewan

January 2002

1. The Municipal Financing Corporation of Saskatchewan (MFC) requires formal written notice of a borrower’s intention to prepay a debenture.  The notice should be directed to the General Manager of the Municipal Financing Corporation of Saskatchewan.  A minimum of 30 days notice is required, and MFC reserves the right to determine the prepayment date.  Payment in full is due on the prepayment date.
2. The price at which a debenture may be prepaid is calculated as the sum of:
   (a) all amounts of principal and interest due on or before the redemption date that have not yet been paid; plus
   (b) the remaining principal of the debenture plus 50% of the difference between the principal of the debenture and its fair market value as determined by MFC.
3. Barring extraordinary circumstances, MFC will not provide new financing to a borrower during the 12 month period following a prepayment of debentures.

Note: This policy applies only to debentures held by MFC.  
Debentures held by other entities are not affected.