SquareTwo Announces Second Supplement to Exchange Offer Terms and Extension of Consent Payment and Withdrawal Deadlines

Denver, Colorado – May 9, 2016 – SquareTwo Financial Corporation (“SquareTwo” or “the Company”) today announced that it has further supplemented the terms of its previously announced offer to exchange all of its outstanding 11.625% senior second lien notes due 2017 (the “2017 Notes”) for up to $188.5 million of new term loans due 2019 (the “Term Loans”) and up to $101.5 million of a new series of preferred stock (the “Preferred Stock”) (the “Exchange Offer”). The supplement relates to an expansion of the waiver for which the Company is soliciting consents and describes an additional risk factor related to the Exchange Offer.

In addition, SquareTwo is extending the consent payment expiration time and withdrawal deadline for the Exchange Offer to 11:59 p.m., New York City time on Friday, May 13, 2016, each as may be further extended by SquareTwo.

Holders who elect to exchange their 2017 Notes will continue to receive, for each $1,000 principal amount of 2017 Notes, $650 principal amount of Term Loans, including $30 principal amount relating to the delivery of consents, and $350 initial liquidation preference of the Preferred Stock. Holders who validly tender 2017 Notes and provide consents no later than 11:59 p.m., New York City time on May 13, 2016 (unless extended by SquareTwo), will receive the additional $30 principal amount of the Term Loans. Holders who validly tender 2017 Notes and provide consents after such time will not receive the additional $30 principal amount of the Term Loans.

The Exchange Offer is scheduled to expire at 11:59 p.m., New York City time on May 24, 2016, unless extended by SquareTwo. The complete terms and conditions of the Exchange Offer are set forth in the offering memorandum and consent solicitation statement dated April 27, 2016 (the “Offering Memorandum”), supplements to the Offering Memorandum dated May 6, 2016 and May 9, 2016, and the related letter of transmittal. Copies of the Offering Memorandum, supplements and letter of transmittal may be obtained from D.F. King & Co., Inc., the exchange and information agent for the Exchange Offer, toll free at (866) 406-2287, (212) 269-5550 (banks and brokerage firms) or e-mail at squaretwo@dfking.com.

This press release is neither an offer to purchase nor a solicitation to buy any securities, nor is it a solicitation for acceptance of the Exchange Offer or the consents. The Company is making the Exchange Offer only by, and pursuant to the terms of, the Offering Memorandum, as supplemented, and related letter of transmittal. The Exchange Offer is not being made in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. This press release is neither an offer to sell nor a solicitation of an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful. The Exchange Offer is being made pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) contained in Section 3(a)(9) of the Securities Act. The Company has not filed, and does not expect to file, a registration statement under the Securities Act or any other federal or state securities laws with respect to the Preferred Stock.

About SquareTwo Financial

SquareTwo Financial is a leader in the distressed asset purchasing industry. SquareTwo’s primary business is the acquisition, management and collection of charged-off consumer and commercial accounts receivable that are purchased from financial institutions, finance and leasing companies, and other issuers in the United States (U.S.) and Canada. Our business model leverages our analytic expertise, technology platform, and in the U.S., a unique combination of SquareTwo-owned call centers operating under the d/b/a name Fresh View Solutions (“Fresh View”) and a network of regional law offices, also referred to as “branch offices,” exclusively dedicated to SquareTwo.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws, including the anticipated expiration and settlement of the Exchange Offer for the 2017 Notes and other information and statements that are not historical fact. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. These risks and uncertainties include the satisfaction or waiver of the conditions to the Exchange Offer, as well as other factors detailed in the Offering Memorandum and in SquareTwo’s most recently filed Annual Report on Form 10-K. These forward-looking statements speak only as of the date of this release. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in SquareTwo’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based, except to the extent required by the federal securities laws.