December 2, 2013

Power Financial Corporation - Issue of Preferred Shares

/NOTFORDISTRIBUTIONTOU.S.NEWSWIRESERVICESORDISSEMINATIONINTHEUNITEDSTATES./

Readers are referred to the sections entitled "Forward-Looking Statements" at the end of this release.

MONTREAL, Dec. 2, 2013/CNWTelbec/ - Power Financial Corporation (TSX: PWF) announced today that it has agreed to issue 7,000,000 Non-Cumulative 5-Year Rate Reset First Preferred Shares, Series T (the "Series T Shares") on a bought deal basis, for gross proceeds of $175 million. The Series T Shares will be priced at $25.00per share. Closing is expected to occur on or about December 11, 2013. The issue will be underwritten by a syndicate of underwriters led by BMOCapital Markets, RBCCapital Markets and Scotiabank.

Power Financial has also granted the underwriters an option to purchase an additional 1,000,000 Series T Shares at the same offering price. Should the underwriters' option be exercised fully, the total gross proceeds of the Series T Share offering will be $200 million.

Dividends on the Series T Shares, if, as and when declared by the Board of Directors of the Corporation, will yield 4.20% per annum, payable quarterly for an initial period ending January 31, 2019. On January 31, 2019and on January 31every five years thereafter, the dividend rate will reset to be equal to the then current five-year Government of Canadabond yield plus 2.37%. Holders of the Series T Shares will have the right to convert their shares into Non-Cumulative Floating Rate First Preferred Shares, Series U of the Corporation (the "Series U Shares"), subject to certain conditions and the Corporation's right to redeem the Series T Shares on January 31, 2019and on January 31every five years thereafter. Holders of the Series U Shares will be entitled to receive a quarterly floating rate dividend, if, as and when declared by the Board of Directors of the Corporation, equal to the three-month Government of Canada Treasury Bill yield plus 2.37%.

The net proceeds from the issue will be used to supplement the Corporation's financial resources and for general corporate purposes. The Corporation intends to redeem all of its $175 millionFirst Preferred Shares, Series M on January 31, 2014upon completion of the Series T offering.

The securities offered have not been and will not be registered under the U.S.Securities Act of 1933, as amended, and may not be offered or sold in the United Statesabsent registration or an applicable exemption from the registration requirements. This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

ABOUTPOWERFINANCIAL
Power Financial Corporation is a diversified management and holding company that has interests, directly or indirectly, in companies in the financial services sector in Canada, the United Statesand Europe. It also has substantial holdings in a diversified industrial group based in Europe. Power Financial Corporation is a member of the Power Corporation Group of Companies. To learn more, visit www.powerfinancial.com.

Forward-Looking Statements
Certain statements in this News Release, other than statements of historical fact, are forward-looking statements based on certain assumptions and reflect the Corporation's current expectations, or with respect to disclosure regarding the Corporation's public subsidiaries, reflect such subsidiaries' disclosed current expectations. Forward-looking statements are provided for the purposes of assisting the reader in understanding the Corporation's financial performance, financial position and cash flows as at and for the periods ended on certain dates and to present information about management's current expectations and plans relating to the future and the reader is cautioned that such statements may not be appropriate for other purposes. These statements may include, without limitation, statements regarding the operations, business, financial condition, expected financial results, performance, prospects, opportunities, priorities, targets, goals, ongoing objectives, strategies and outlook of the Corporation and its subsidiaries, as well as the outlook for North American and international economies for the current fiscal year and subsequent periods. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "expects", "anticipates", "plans", "believes", "estimates", "seeks", "intends", "targets", "projects", "forecasts" or negative versions thereof and other similar expressions, or future or conditional verbs such as "may", "will", "should", "would" and "could".

By its nature, this information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of factors, many of which are beyond the Corporation's and its subsidiaries' control, affect the operations, performance and results of the Corporation and its subsidiaries and their businesses, and could cause actual results to differ materially from current expectations of estimated or anticipated events or results. These factors include, but are not limited to: the impact or unanticipated impact of general economic, political and market factors in North Americaand internationally, interest and foreign exchange rates, global equity and capital markets, management of market liquidity and funding risks, changes in accounting policies and methods used to report financial condition (including uncertainties associated with critical accounting assumptions and estimates), the effect of applying future accounting changes, business competition, operational and reputational risks, technological change, changes in government regulation and legislation, changes in tax laws, unexpected judicial or regulatory proceedings, catastrophic events, the Corporation's and its subsidiaries' ability to complete strategic transactions, integrate acquisitions and implement other growth strategies, and the Corporation's and its subsidiaries' success in anticipating and managing the foregoing factors.

The reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements. Information contained in forward-looking statements is based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including management's perceptions of historical trends, current conditions and expected future developments, as well as other considerations that are believed to be appropriate in the circumstances, including that the list of factors in the previous paragraph, collectively, are not expected to have a material impact on the Corporation and its subsidiaries. While the Corporation considers these assumptions to be reasonable based on information currently available to management, they may prove to be incorrect.

Other than as specifically required by applicable Canadian law, the Corporation undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise.

Additional information about the risks and uncertainties of the Corporation's business and material factors or assumptions on which information contained in forward-looking statements is based is provided in its disclosure materials, including its most recent Management's Discussion and Analysis and Annual Information Form, filed with the securities regulatory authorities in Canadaand available at www.sedar.com.

SOURCEPOWERFINANCIALCORPORATION

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