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KNORR-BREMSE CORPORATE BONDS.

IMPORTANT NOTE:

This information constitutes neither an offer to purchase or subscribe for securities of Knorr-Bremse AG nor an invitation to submit an offer for the acquisition of securities. The purchase of or subscription for bearer bonds of Knorr-Bremse AG can only be based on the Prospectus approved by CSSF and notified to the German Financial Supervisory Authority. The Prospectus of the Debt Issuance Program which also applies to the bond can be obtained from the website of the Luxembourg Stock Exchange.

Contact

Kai Gloystein Corporate Finance & Treasury/Creditor Relations

ABOUT THE BONDS

About the bond Knorr-Bremse Bond issued 06/2018 Knorr-Bremse Bond issued 02/2016
Issuer Knorr-Bremse AG Knorr-Bremse AG
Issuer ratings A2/outlook stable (Moody’s), A/outlook stable (Standard & Poor’s) A2/outlook stable (Moody’s), A/outlook stable (Standard & Poor’s)
Volume 750 million EUR 500 million
Term 7 Year 5 years
Settlement June 14, 2018 December 08, 2016
Maturity June 13, 2025 December 08, 2021
Coupon 1.125% p. a. 0.5% p. a.
Reoffer spread 1.188% p. a. 0.571% p. a.
Listing EURO MTF Luxembourg EURO MTF Luxembourg
Denomination EUR 1,000 EUR 1,000
Applicable law German law German law
Bookrunners Deutsche Bank, HSBC and Bayern LB Commerzbank, Deutsche Bank and UniCredit

External ratings. Further confirmation of Knorr-Bremse’s “A” rating.

We act with prudence and foresight. Assessments by external rating agencies confirm this. We are proud of our “A” ratings as testament to our first-class creditworthiness.

For the past 15 years, Knorr-Bremse has had its creditworthiness externally assessed by the two prominent and internationally renowned rating agencies Standard & Poor"s and Moody"s. The resultant ratings are of great importance to us. Positive ratings not only build trust in the Knorr-Bremse Group’s financial stability among customers and suppliers – a prerequisite in any long-term business relationship – they also have a positive impact on access to financing on the capital market and from banks.

In the top ranks worldwide

Since 2015 Standard & Poor’s and Moody’s have placed the Knorr-Bremse Group in the rating category “A” or “A2”, both with outlook “stable”. These ratings underline our company‘s sustained positive business development. With its rating, Knorr-Bremse occupies one of the top ranks not only among commercial vehicle and rail vehicle suppliers, but also in comparison with other industrial companies worldwide.

We build trust – with external assessments

From the outset, both Standard & Poor’s and Moody’s have assigned the Knorr-Bremse Group investment grade status. But we won’t take it for granted. The Group continues to strive to systematically improve its financial stability and, in turn, its credit ratings. Knorr-Bremse is one of the few family-owned companies to have an external rating and also to be awarded “A” ratings, placing it in the highest category.

We are strongly positioned – with two corporate divisions

The Group’s two divisions, Rail Vehicle Systems and Commercial Vehicle Systems, form the commercial and financial basis for Knorr-Bremse’s ratings.

Benefits of the two independent divisions

  • Stability through product and customer diversification
  • Balanced geographic distribution of sales across the Group
  • Divisions follow economic cycles that often vary greatly in terms of time and region
  • Synergies in key areas of technology

The diversification in geographies and products thus strengthens the Group as a whole and helps to mitigate commercial risk.

Stability through aftermarket sales

One key factor for the Group’s long-term stability is the proportion of sales contributed by the aftermarket sector, since this is far less exposed to crisis-led volatility than the original equipment market. In this respect, the two rating agencies acknowledge Knorr-Bremse’s above average share of aftermarket sales.

We stand for sound financial planning – with a long-term perspective

An important indicator in any rating is the reliability of a company’s financial planning and the realization of those plans over longer periods. Knorr-Bremse presents a very stable track record, stretching back more than 15 years, in which financial targets have generally been reached or exceeded. Acquisitions, the establishment of joint ventures and other financial transactions that contribute to the growth of the Knorr-Bremse Group are conducted with foresight, a sense of proportion and manageable levels of risk. The resultant prudent and conservative financial policy represents another central pillar of the Group’s first-class credit rating.

Room for strategic maneuver thanks to high liquidity volume

In the past ten years, the Knorr-Bremse Group has also regularly succeeded in generating above average levels of free cash flow. Furthermore, Knorr-Bremse AG added to its liquidity cushion in June 2018 by issuing an additional bond with a volume of EUR 750 million, so it has the necessary scope to act quickly and flexibly if potential growth opportunities arise.

Investor Relations