Amwest Insurance Group Inc. Announces Restructured Bank Debt.

Business Editors

CALABASAS, Calif.--(BUSINESS WIRE)--Feb. 20, 2001

Amwest Insurance Group Inc. (AMEX:AMW)(PCXE:AMW) today announced that it has reached an agreement with Union Bank of California, N.A. to restructure its outstanding $13,633,077 term note.

The agreement is contingent on receiving approval from the Nebraska Department of Insurance. In exchange for the Bank's forgiveness of a portion of the outstanding debt, the restructuring will include a $2 million cash payment, the issuance of $2 million in non-voting, non-convertible preferred stock, the issuance of 5-year immediately exercisable warrants to purchase 250,000 shares of Amwest common stock at fair market value and the pledge to the Bank of the capital stock of the Company's insurance subsidiaries to secure the Company's obligations under the preferred stock. Other terms were not disclosed.

Charles L. Schultz, interim chief executive officer stated, "We are pleased with the negotiated terms of the debt restructuring and will immediately seek regulatory approval from the Nebraska Department of Insurance. This restructuring is an integral part of the Company's plan for reorganization, and while no assurances can be given, we believe that this debt restructuring will be viewed favorably by the regulators and other important constituencies such as A.M. Best Company."

Schultz commented further, "The Company is continuing negotiations on restructuring its reinsurance programs to better address its present needs and will continue to work with our investment bankers in connection with various strategic alternatives."

Amwest is a Calabasas-based insurance holding company underwriting surety and property and casualty insurance through Amwest Surety Insurance Company and Far West Insurance Company.

Certain statements contained in this news release regard matters that are not historical facts and are forward-looking statements. Because such forward-looking statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include but are not limited to: failure of the reorganization plan to be effective, failure of the Company to obtain any regulatory approvals from the Nebraska Commissioner of Insurance or the California Commissioner of Insurance that may be required in connection with implementation of the reorganization plan, failure of the Company to negotiate and place the reinsurance programs required to implement the reorganization plan, the ineffectiveness of underwriting and other changes made by management, a further deterioration in premiums written or losses incurred in the Company's surety business, the ability to achieve the projected writings of commercial surety and court products, failure of any of the assumptions underlying the reorganization plan to materialize, the lack of adherence by Company personnel to the Company's underwriting guidelines, failure of the Company to obtain a favorable review from A.M. Best of its rating following implementation of the reorganization plan, failure of the Company to raise additional capital or to successfully consummate a strategic alliance, a reduction in the investment yield earned on the Company's investment portfolio, or general economic decline. The Company undertakes no obligation to release publicly the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated events.