Englewood, Colorado, October 8, 2003

PENFORD CORPORATION ANNOUNCES NEW $105 MILLION CREDIT FACILITY

Penford Corporation (Nasdaq: PENX) today announced that it has entered into a $105 million credit facility with several leading commercial banks. The facility consists of a $55 million revolving line of credit expiring October 7, 2006 and a five year $50 million term loan. Cash proceeds from this placement were used to replace outstanding debt. Initial borrowings from the new facility will be approximately $85 million. The company indicated that it would record a $0.6 million pre-tax, non-operating expense in the first quarter of fiscal 2004 related to unamortized transaction fees associated with the prior debt agreement.

The Administrative Agent for the new facility is Harris Trust and Savings Bank. The following banks also joined the facility: Wells Fargo Bank N.A., Australian and New Zealand Banking Group, LaSalle Bank, RaboBank Nederland, and U.S. Bank.

“The completion of this transaction represents another important step forward in our strategic plan for Penford,” commented Chief Executive Officer Thomas Malkoski. “We have used the company’s strong cash flow to reduce outstanding debt by more than 30% since 2001. This new facility reflects those efforts and provides the company with additional financial flexibility to pursue our commercial programs.”

The company will host a call on Thursday, October 16, 2003 to discuss Fourth Quarter and Fiscal 2003 results. Please phone 1-877-407-9205 at 8:50 a.m. Mountain Time to participate in the call. The conference call will begin at 9:00 a.m. Mountain Time (11:00 am Eastern Time). Additional information is available on the company’s web-site at www.penx.com

About Penford Corporation
Penford Corporation develops, manufactures and markets specialty natural-based ingredient systems for various applications, including papermaking, textiles and food products.

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