ASPEN GROUP — Capital/Financing Update 2009

May 18, 2009

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Aspen Group Limited
ABN 50 004 160 927
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Aspen Property Trust ARSN 104 807 767

Level 8, Septimus Roe Square 256 Adelaide Terrace, Perth Western Australia, 6000 Telephone: 08 9220 8400 Facsimile: 08 9220 8401 Email: homemail@aspengroup.com.au

ASX ANNOUNCEMENT 19 May 2009

This announcement is not for distribution or release in the United States.

Aspen Announces Fully Underwritten Equity Raising of $82.4 million

Aspen Group has today announced a fully underwritten equity raising of $82.4 million at an offer price of $0.30 per security. Proceeds from the equity raising will strengthen the Group’s balance sheet through application of funds to reduce debt, providing substantial headroom within the Group’s senior debt facility.

The equity raising will be undertaken via an accelerated non-renounceable 1 for 1.1 pro rata offer (“Entitlement Offer”) at $0.30 per security to eligible securityholders. The Entitlement Offer comprises an institutional component (“Institutional Offer”) of at least $40.0 million and a retail component (“Retail Offer”) of no more than $42.4 million. The Entitlement Offer is fully underwritten by Euroz Securities Limited.

The equity raising provides the following key benefits to the Group:

• The ability to secure an enhanced senior debt facility with our primary lender (details provided within)

• Senior debt facility drawn to 48%¹ LVR resulting in significant headroom capacity (revised covenant LVR of 65%)

• Creates liquidity to take advantage of market opportunities

• Reduces gearing from 39% to 27%²

• Strengthens annualised interest cover to 4.3 times³

Aspen Group Managing Director Angelo Del Borrello said the capital raising is a further step in the Group’s recent capital management initiatives and significantly enhances the Group’s financial strength.

“The substantial reduction in debt levels, coupled with the Board’s decision earlier in the year to undertake a full independent review of asset values as at 31 December 2008, provides greater confidence in our current financial position”, said Mr Del Borrello.

Aspen retains a sound business model comprising core income producing properties and innovative funds management products. The Board believes that in the face of the continuing difficult economic and financial climate, it is important to consolidate Aspen’s position by reducing gearing below the Group’s previously stated target gearing range of 30%-40%.

¹ Post Issue LVR (net bank debt / secured investment properties) ² Post Issue Gearing (bank debt less cash / total assets less cash)

³ Post Issue Interest Cover (EBIT / interest expense)

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“Reducing the Group’s gearing level below the target range will create a comfortable level of headroom within the senior debt facility and enable the Group to selectively and prudently review high value growth opportunities expected to arise in the next 12 months,” said Mr Del Borrello.

Enhanced Senior Debt Facility

Stemming from this equity raising, the Group has secured enhanced senior debt facility terms with its existing primary financier, National Australia Bank. The new facility provides for significantly more headroom and further LVR flexibility.

Key highlights of the revised facility are described below:

• A minimum LVR covenant of 60% for the life of the facility with capacity to increase to 65% if further valuation softening occurs

• Removal of the LVR step down to 55% (previously required in January 2011)

• Generally more flexible facility agreement terms

The term of the facility remains unchanged (maturity date of 28 February 2012).

The revised senior debt terms are subject to raising minimum cash proceeds of $50 million by 30 June 2009 which is expected to be achieved given the Entitlement Offer is fully underwritten. The underwriting agreement is subject to usual termination events.

Earnings[4] and Distributions Guidance

Aspen’s earnings guidance for the financial year ending 30 June 2009 (excluding the impact of the Entitlement Offer) remains 12.50 cps to 14.20 cps on a pre-issue basis which is consistent with the range previously provided to the market. On a post issue basis this equates to a range of 11.65 cps to 13.21 cps for the 2009 financial year.

On an annualised basis, incorporating both the dilution of new securities and interest savings for a full year, this would equate to an underlying earnings range of 6.77 cps to 7.58 cps. This level of earnings per security is expected to be maintainable for the 2010 financial year.

New securities issued under the Entitlement Offer will rank equally with existing securities and will be entitled to the June quarter distribution. The estimated distribution for the June quarter is 1.04 cps, equivalent to the previously announced 2.04 cps on a post Entitlement Offer basis.

The Group’s distribution policy is to pay out 70%-80% of underlying earnings. The outlook for 2010 (on the above mentioned basis) is for an annualised distribution level range of 4.74 cps to 5.31 cps based on a 70% payout ratio.

Further financial details of the Entitlement Offer are provided in the presentation released with this announcement.

Summary

Aspen Group is undertaking this equity raising as part of its ongoing capital management strategy. The decision to proceed with an Entitlement Offer provides all securityholders with an opportunity to increase their holding at an attractive entry price of $0.30 per security, a significant discount to the post Entitlement Offer net tangible asset backing of $0.74 per security.

The successful completion of this equity raising will ensure the Group is well positioned to execute its proven business model and capitalise on attractive opportunities going forward.

4 Earnings exclude revaluation and fair value adjustments

Aspen Group – ASX Announcement 19/5/09

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Entitlement Offer

Under the Entitlement Offer securityholders are invited to participate in a non-renounceable prorata entitlement of 1 security for every 1.1 securities held at an offer price of $0.30 per security. The record date for entitlements is 5pm WST Friday 22 May 2009.

The Entitlement Offer comprises an institutional component of at least $40.0 million and an offer of no more than $42.4 million to eligible retail securityholders to participate at the same price. The Entitlement Offer is fully underwritten by Euroz Securities Limited.

The Institutional Offer is expected to be finalised by 12 pm WST on Wednesday 20 May 2009. Aspen Group expects to announce the outcome of the Institutional Offer to the market prior to the start of trading on Thursday 21 May 2009, with trading expected to resume at commencement of trading on the ASX on that day.

If the Institutional Offer is not fully subscribed to, institutional securityholders will have an opportunity to apply for additional securities in excess of their entitlement. Any remaining securities not taken up will be offered for subscription to eligible institutional holders and selected institutions at the Entitlement Offer price of $0.30 per security.

The Retail Offer opens on 27 May 2009 and will be undertaken by way of a Retail Entitlement Offer booklet which is expected to be mailed to securityholders on 27 May 2009. If the Retail Offer is not fully subscribed to, retail securityholders will have an opportunity to apply for additional securities in excess of their entitlement.

Securityholders who do not take up their entitlements in full or in part will not receive any value in respect of those entitlements that they do not take up.

Further details of the Entitlement Offer are included in the attached annexures to this announcement.

Further Information

Further information including investment considerations and risks associated with this Entitlement Offer is included in the presentation released with this announcement.

Full details of the Retail Offer will be included in the Retail Entitlement Offer booklet which is expected to be mailed to securityholders on Wednesday 27 May 2009. If securityholders wish to obtain more information in the interim, please telephone our investor services centre on 1800 220 840 or visit our website at www.aspengroup.com.au

Annexures

1. Entitlement Offer Timetable

2. Foreign Investor Restrictions

Aspen Group – ASX Announcement 19/5/09

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For further information in relation to this announcement please contact:

Angelo Del Borrello Managing Director, Aspen Group Phone: (08) 9220 8400 Mobile: 0419 335 411

John McGlue FD Third Person Phone: (08) 9386 1233 Mobile: 0417 926 915

Or visit www.aspengroup.com.au

About Aspen Group

Aspen Group is an ASX listed property investment and funds management group, focused on acquiring quality property assets and creating and managing innovative property funds and syndicates.

Formed in 2001, Aspen has progressed rapidly and is now a member of the S&P/ASX 300 index with assets under management in excess of $1.3 billion.

Aspen’s core strength lies within the Group’s broad expertise across property acquisition, development and management enabling the Group to provide leading edge property solutions.

Aspen directly owns and manages a well diversified portfolio of commercial property assets Australia-wide. The portfolio is spread across the office, industrial and retail sectors and has grown through acquisitions and portfolio revaluations of existing properties driven by a strong property management focus.

Aspen also has developed an outstanding reputation for creating unique and successful funds management products and related services. These managed funds have provided investment opportunities across a broad spectrum of property sectors including tourist parks, residential land subdivisions, CBD office developments, private hospital developments and retirement and accommodation villages.

Aspen continues to source acquisition opportunities for both balance sheet and syndication purposes in order to achieve further growth in both assets and earnings for securityholders.

Aspen Group – ASX Announcement 19/5/09

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ANNEXURE 1: ENTITLEMENT OFFER TIMETABLE

EVENT	DATE
Institutional Offer and institutional bookbuild opens	Tuesday, 19 May 2009
Institutional Offer closes	12pm WST Wednesday, 20 May 2009
Trading recommences	Thursday, 21 May 2009
Record date	5pm WST Friday, 22 May 2009
Mailing of entitlement and acceptance form to eligible retail securityholders	Wednesday, 27 May 2009
Retail Offer opens	Wednesday, 27 May 2009
Closing date for early acceptances* of Retail Offer	Monday, 1 June 2009
Settlement of Institutional Offer, institutional bookbuild and early acceptances of Retail Offer	Tuesday, 2 June 2009
Allotment and normal trading of new securities issued under Institutional Offer, institutional bookbuild and early acceptances* of Retail Offer	Wednesday, 3 June 2009
Retail Offer closes	Friday, 12 June 2009
Settlement of Retail Offer	Tuesday, 23 June 2009
Allotment of new securities issued under Retail Offer	Wednesday, 24 June 2009
Normal trading of new securities issued under Retail Offer	Thursday, 25 June 2009
Despatch of holding statements	Thursday, 25 June 2009
Record date for Aspen June Quarterly distribution	5pm WST Wednesday, 1 July 2009

Note: times and dates are indicative only and subject to change without notice

• Eligible retail securityholders who submit their applications by Monday 1 June 2009 will have their entitlements accepted and settled in conjunction with the Institutional Entitlement Offer settlement on Tuesday 2 June, 2009.

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ANNEXURE 2: FOREIGN INVESTOR RESTRICTIONS

The Information contains forward looking statements which are subject to known and unknown risks, uncertainties and other factors that could cause the actual results, performance or achievements of the Aspen Group to vary materially from those expressed or implied in such forward looking statements. Some of the risk factors that impact on forward looking statements are set out in the Risks section of the Presentation that accompanies this announcement. Aspen Group does not guarantee any particular rate of return or the performance of Aspen Group nor does it guarantee the repayment of capital from Aspen Group or any particular tax treatment.

The Entitlement Offer will be conducted in accordance with the requirements of the laws of Australia. No Stapled Securities are being offered to any person whose registered address is outside Australia or New Zealand unless Aspen Group is satisfied that would be lawful to make such an offer.

No action has been taken to register the Stapled Securities the subject of the Entitlement Offer (New Stapled Securities) or otherwise permit a public offering of New Stapled Securities in any jurisdiction outside of Australia. The Information does not constitute an offer or invitation in any place in which, or to any person to whom, it would not be lawful to make such an offer or invitation.

The distribution of this Information in jurisdictions outside Australia may be restricted by law and persons who come into possession of it who are not in Australia should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

New Zealand

The Information has not been registered, filed with or approved by any New Zealand regulatory authority under or in connection with the Securities Act 1978 (New Zealand).

USA

The Information has been prepared for publication in Australia and may not be released or distributed in the United States or to, or for the account or benefit of, any ‘US Person’ (as defined in Regulation S under the US Securities Act of 1933, as amended (the Securities Act)). This announcement does not constitute an offer of securities for sale in the United States and any securities described in this announcement may not be offered or sold in the United States or to, or for the account or benefit of, a US Person absent registration under the Securities Act or an exemption from registration.

Indonesia

The Information may only be distributed or passed on outside Indonesia to persons who are neither citizens of Indonesia (wherever located) nor residents in Indonesia. The New Stapled Securities may not be offered or sold, directly or indirectly, in Indonesia or to Indonesian citizens abroad in a manner which constitutes a public offering under the laws and regulations of Indonesia.

United Kingdom

The Information has not been delivered for approval to the Financial Services Authority in the United Kingdom and no prospectus (within the meaning of section 85 of FSMA) has been published or is intended to be published in respect of the New Stapled Securities.

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Each of Aspen Group Limited (ABN 50 004 160 927) and Aspen Funds Management Limited (ABN 48 104 332 278) (together, Aspen Group ) and Euroz Securities Limited ( Underwriter ) have:

• complied and will comply with all applicable provisions of Financial Services and Markets Act 2000 of the United Kingdom (the FSMA) with respect to anything done by it in relation to the New Stapled Securities in, from or otherwise involving the United Kingdom; and

• only communicated or caused to be communicated and will only communicate or cause to be communicated in the United Kingdom any invitation or inducement to engage in investment activity (within the meaning of Section 21 of FSMA) received by it in connection with the issue or sale of the New Stapled Securities in circumstances in which Section 21(1) of FSMA does not apply to the Aspen Group.

Singapore

The Information has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, the Information and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of New Stapled Securities may not be circulated or distributed, nor may New Stapled Securities be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Sections 274 and 282Y of the Securities and Futures Act, Chapter 289 of Singapore ( SFA ), (ii) to a relevant person pursuant to Sections 275(1) and 282Z(1) of the SFA, or any person pursuant to Sections 275(1A) and 282Z(2) of the SFA, and in accordance with the conditions specified in Sections 275 and 282Z of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Where New Stapled Securities are subscribed or purchased under Sections 275 and 282Z of the SFA by a relevant person which is:

• a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or

• a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor,

shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the New Stapled Securities pursuant to an offer made under Sections 275 and 282Z of the SFA except:

• to an institutional investor (for corporations, under Section 274 of the SFA) or to a relevant person defined in Sections 275(2) and 282Z(3) of the SFA, or to any person pursuant to an offer that is made on terms that such shares, debentures and units of shares and debentures of that corporation or such rights and interest in that trust are acquired at a consideration of not less than S$200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets, and further for corporations, in accordance with the conditions specified in Sections 275 and of the SFA;

• where no consideration is or will be given for the transfer; or

• where the transfer is by operation of law.

Other jurisdictions

The New Stapled Securities may not be offered or sold in any other jurisdiction under the Entitlement Offer, except to persons to whom such offer, sale or distribution is permitted under applicable law.

Aspen Group – ASX Announcement 19/5/09

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