Pacific Ethanol, Inc. (NasdaqCM:PEIX) announced a private placement of 22,192,491 senior unsecured notes from five new accredited investors at $0.927 per unit for gross proceeds of $20,572,438.82 and 25,630,286 prepaid warrants at $0.06 per warrant for $1,620,051.82 making total gross proceeds of $22,192,490.64 on December 19, 2012. Warrants are exercisable at $0.52 per share for a period of five years to purchase 25,630,286 common shares of the company. The notes will have an interest of 5% per annum and will mature on March 30, 2016. If the aggregate outstanding principal balance of the notes is not less than $11,096,245.32 by January 15, 2014, the interest rate will increase commencing on January 15, 2014 by 1% per annum on each calendar January 15, April 15, July 15 and October 15 until the aggregate outstanding principal balance of the notes is less than $11,096,223. The interest rate will also increase by an additional 2% per annum above the interest rate otherwise applicable upon the occurrence, and during the continuance, of an event of default until such event of default has been cured. CWD OC 522 Master Fund, Ltd and Candlewood Credit Value Fund II, LP managed by Credit Value Partners each will subscribe for 3,508,296 notes, 4,051,739 warrants and 27,050 notes, 31,395 warrants respectively. Credit Suisse Loan Funding LLC will subscribe for 11,579,548 notes and 13,373,066 warrants. Candlewood Special Situations Master Fund, Ltd and CCVF PacEth LLC each will subscribe for 7,050,552 notes, 8,142,697 warrants and 27,045 units, 31,389 warrants respectively. Larry A. Cerutti of Troutman Sanders LLP will serve as a legal advisor to the company. Lazard Capital Markets LLC will serve as the sole placement agent to the company. Transaction is expected to close on or before January 18, 2013. The company or any investor may terminate the transaction if the closing does not occur on or prior to January 18, 2013. The company shall reimburse the investors for reasonable fees and expenses paid by such investors to counsel for the investors in the amount equal to $50,000 plus 50% of such fees and expenses over $50,000.

On January 11, 2013, Pacific Ethanol, Inc closed the transaction. The company paid sales commission of $100,000. The securities were issued pursuant to Regulation D. Credit Suisse Securities (USA) LLC, Investment Arm also participated in the transaction.