CHALLENGER LIMITED — Capital/Financing Update 2007

MARKET RELEASE

CHALLENGER FINANCIAL SERVICES PRICES FIRST DOMESTIC MTN

19 April 2007, Sydney - Challenger Financial Services Group Ltd (ASX: CGF) today announced that it had priced its first domestic medium term note (MTN).

The three year, fixed rate transaction was increased from an initial volume target of \$150 million to \$250 million, following strong demand from both domestic and Asian investors. The note priced at 40bps over mid swap and has a coupon of 7%.

Dominic Stevens, Deputy Managing Director, said "Challenger continues to diversify its sources of funding and we were pleased with the support we received from investors for this transaction.

"While this is our first MTN issue in the Australian market, Challenger has been active in both the domestic and international bond markets many years, yia our Millennium Trust RMBS issuance, with more than \$21 billion of RMBS currently outstanding."

Proceeds of the issue will be used for general funding purposes.

Challenger is rated 'BBB+' (stable outlook) by Standard & Poor's Rating Services.

ENDS