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Press Release

MDC Corporation Inc. Custom Direct Income Fund

MDC Corporation Inc. and Custom Direct Income Fund Close Initial Public Offering of Units for Gross Proceeds of $110 Million Total Gross Proceeds to MDC Including Credit Facilities to Total $162 Million Custom Direct Enters Into Currency and Interest Rate Hedge Arrangements

Date: May 29th, 2003

TORONTO, Ontario (May 29, 2003) – MDC Corporation Inc. (“MDC”) and Custom Direct Income Fund (the “Fund”) announced today that they closed:
· the transfer to the Fund, indirectly, of an 80% interest in Custom Direct, Inc., (“Custom Direct”) the second largest participant in the direct-to-consumer segment of the U.S. cheque industry, and
· an initial public offering of units of the Fund resulting in gross proceeds of $110 million.

Custom Direct has completed arrangements which provide it with a $58.9 million (US$42.5 million) credit facility of which $52 million (US$37.5 million) has been drawn under the term loan portion of the facility and $6.9 million (US$5 million) is available under a revolving facility which is undrawn.

The gross proceeds of the offering and the term loan portion of the credit facility (before commissions, fees and expenses) have totalled $162 million and have been paid (net of commissions, fees and expenses) to MDC, directly and through a subsidiary, for the 80% interest in Custom Direct. The underwriters have been granted an over-allotment option for 1,650,000 units, which if fully exercised, would result in additional gross proceeds to MDC of $16.5 million and occur no later than June 27, 2003.

MDC owns 29.6% of the Fund (or 4,613,804 units) and a 20% subordinated interest in the business (which it has agreed not to sell until after December 31, 2003) for a fully diluted interest in the Fund of 43.6% (35.2% if the underwriters’ over-allotment option is fully exercised).

“We are very pleased with the success of the offering, which has more than met our expectations. Our ability to crystalize significant value from this investment is consistent with our previously announced plan of selling our non-core businesses in order to repay our existing debt and increase our liquidity,” said Miles S. Nadal, Chairman, President and Chief Executive Officer of MDC.

“We are excited about our future prospects and the flexibility the offering provides us to focus our resources on MDC’s core businesses,” added Nadal.

Commensurate with the closing, Custom Direct entered into certain currency and interest rate hedge arrangements. Under the terms of the currency hedge arrangement, Custom Direct will be able to exchange US dollars for Canadian dollars at a fixed rate of 1.412, a favourable rate to the one used in the Fund’s prospectus of 1.394. Custom Direct has also fixed the interest rate on the term portion of its credit facility at 5%, the rate used in the prospectus.

“These arrangements will ensure that for the next 3 years, the Fund’s ability to meet its target distributions to unitholders will not be affected by currency and interest rate fluctuations. These arrangements will allow management to focus its attention on day to day operations and on delivering expected business performance,” said John Browning, President and CEO of Custom Direct.

The offering has been underwritten by a syndicate led by CIBC World Markets Inc. and TD Securities Inc., which includes Scotia Capital Inc., BMO Nesbitt Burns Inc., National Bank Financial Inc. and Griffiths McBurney & Partners.

The Fund units have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

About Custom Direct

Based in Maryland and Arkansas, Custom Direct has been selling cheques and cheque related accessories across the United States since 1992 and offers the industry’s widest selection of product designs. Custom Direct is the second largest participant in the direct-to-consumer segment of the U.S. cheque industry with sales and EBITDA for the year ending December 31, 2002 of approximately US$103 million and US$20 million respectively.

About MDC Corporation Inc. (“MDC”)

MDC is a publicly traded international business services organization with operating units in Canada, the United States, United Kingdom and Australia. MDC provides marketing communication services, through Maxxcom Inc., and offers security sensitive transaction products and services in four primary areas: personalized transaction products such as personal and business cheques; electronic transaction products such as credit, debit, telephone & smart cards; secure ticketing products, such as airline, transit and event tickets; and stamps, both postal and excise.

About Maxxcom Inc.

Maxxcom, a subsidiary of MDC, is a multi-national business services company with operating units in Canada, the United States and the United Kingdom. Maxxcom is built around entrepreneurial partner firms that provide a comprehensive range of communications services to clients in North America and the United Kingdom. Services include advertising, direct marketing, database management, sales promotion, corporate communications, marketing research, corporate identity and branding, and interactive marketi