Knorr-Bremse issues inaugural 700 Million Euro Sustainability-Linked Bond (SLB)

▪ The inaugural SLB is issued under the new Sustainability-Linked Bond Framework by Knorr-Bremse AG

▪ With this transaction Knorr-Bremse commits itself to continue to drive its decarbonization approach within its value chain

▪ The transaction was met with strong interest from investors and was significantly oversubscribed

Knorr Bremse AG implements its focus on sustainability now also within its capital market financing. The global market leader for braking systems and a leading supplier of other safety-critical rail and commercial vehicle systems, issued its inaugural sustainability-linked bond at the European debt capital markets yesterday. The bond has a volume of EUR 700 million and a tenor of 5 years. The annual coupon amounts to 3,25 percent.

Frank Markus Weber, Executive Board Spokesman and Chief Financial Officer of Knorr-Bremse AG: “With the Sustainability-Linked Bond we are strengthening our liquidity and refinancing, among other things, our current M&A transactions. Through the link to sustainability objectives, we underline the importance of our Climate Strategy 2030 and commit ourselves to continue to develop our sustainability approach. As the second sustainability-linked instrument in our capital structure we further send a strong message, to continue to facilitate the integration of aspects of sustainability in all areas of the company“.

The interest rate of the bond is linked to the achievement of a predetermined sustainability target. Knorr-Bremse has defined the target within a framework for sustainability-linked financing, called the Sustainability-Linked Bond Framework. Knorr-Bremse is committed to publish a Scope 3 emissions reduction target focusing on its value chain, approved by the Science-Based Target initiative. The framework was evaluated by ESG agency ISS Corporate Solutions (ISS) in form of a Second Party Opinion (SPO). ISS confirms the ambitions and materiality of Knorr-Bremse’s targets and the alignment with common market standards. In case Knorr-Bremse will not achieve the target, the interest rate will be increased by 20 bps. p.a., until the maturity of the bond. The proceeds of the issue are intended for general corporate purposes.

At the beginning of 2022 Knorr-Bremse already integrated sustainability elements into the syndicated credit and and is now expanding its financing instruments in this area by issuing a sustainability-linked bond.

DISCLAIMER

This publication has been independently prepared by Knorr-Bremse AG (“Knorr-Bremse”). It may contain forward-looking statements that address key issues such as strategy, future financial results, events, competitive positions, and product developments. These forward-looking statements – just as any business activity in a global environment – are always associated with uncertainty. Such forward-looking statements are subject to a number of risks, uncertainties, and other factors, including, but not limited to, those described in Knorr-Bremse’s disclosures. Should one or more of these risks, uncertainties, or other factors materialize, or should underlying expectations not occur or should assumptions prove incorrect, the actual results, performance, or achievements of Knorr-Bremse may vary materially from those described in the relevant forward-looking statements. Such forward-looking statements may be identified by words such as “expect,” “want,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” “will,” “project,” or words of similar meaning. Knorr-Bremse does not intend, nor does it assume any obligation, to update or revise its forward-looking statements regularly in light of developments that differ from those anticipated.