Outokumpu launches a senior unsecured convertible Bond Issue for up to EUR 250 million

OUTOKUMPU OYJ
STOCK EXCHANGE RELEASE
February 18, 2015 at 9.59 am EET

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL

Outokumpu announces the launch of an offering (the "Offering") of senior unsecured convertible bonds due February 2020 convertible into ordinary shares in Outokumpu (the "Bonds") through an accelerated book building process to institutional investors. The Bonds are expected to be issued in an aggregate initial principal amount of approximately EUR 215 million, which may be increased up to EUR 250 million if the over-allotment option is exercised in full.

The issuance of the Bonds is part of Outokumpu's plan to actively diversify its funding base and to reduce financing costs. The proceeds from the Offering will be used to refinance Outokumpu's existing financial indebtedness and for the redemption of the senior secured notes maturing in 2016.

Following the issue of the convertible bond, Outokumpu is planning to cancel the remaining unutilized EUR 250 million of its EUR 500 million liquidity facility that was agreed in February 2014. 

The Bonds are expected to carry a coupon of 2.75-3.75% per annum payable semi-annually in arrear on February 26 and August 26 in each year, with the first interest payment date being August 26, 2015. There is a coupon step-up by 0.75% if Outokumpu's secured capital market indebtedness (excluding any existing secured notes indebtedness) exceeds EUR 250 million. The initial conversion price is expected to be set at a premium of 30-35% above the volume-weighted average price of the Outokumpu share on Nasdaq Helsinki between launch and pricing of the Offering. The conversion price will be subject to adjustments for any dividend in cash or in kind as well as customary anti-dilution adjustments, pursuant to the terms and conditions of the Bonds.

The shares underlying the Bonds represent approximately 6.6-6.8% (pre over-allotment option) of the total number of Outokumpu's issued and outstanding shares immediately prior to the Offering, subject to potential adjustments to the conversion price.

The Bonds will be issued at par and will be redeemed at par on February 26, 2020, unless otherwise redeemed, purchased, converted or cancelled.

Outokumpu has the right to redeem all outstanding Bonds on or after the third anniversary plus 15 days after the settlement date if the volume weighted average price of the Outokumpu share is at least 130% of the then prevailing conversion price for a specified period of time. Outokumpu will also have the right to redeem all outstanding Bonds at any time if conversion rights are exercised and/or purchases (and corresponding cancellations) and/or redemptions are effected in respect of at least 85% of the initial principal amount of the Bonds. The holders of the Bonds will continue to have a right to exercise conversion rights up to and including the tenth day before the date fixed for any such redemption. There will be an investor put option in the event of a change of control of Outokumpu.

The final terms of the Bonds, including the initial conversion price, are expected to be announced later today.

Settlement and delivery of the Bonds is expected to take place on or about February 26, 2015. Outokumpu will make an application to admit the Bonds to listing and trading on the Open Market (Freiverkehr) segment of the Frankfurt Stock Exchange prior to the first interest payment date.

Outokumpu has agreed to a lock-up for a period commencing on pricing and ending 90 calendar days from the settlement date, subject to customary exceptions.

Crédit Agricole Corporate and Investment Bank is acting as Sole Global Coordinator and Bookrunner for the Offering.

For further information, please contact:

Johanna Henttonen, SVP - Investor Relations

Tel. +358 9 421 3804, mobile +358 40 530 0778

Juha Hakala, SVP - Corporate Treasurer

Tel. +358 9 421 2644, mobile +358 40 533 2536

Outokumpu Group

Outokumpu is a global leader in stainless steel. We create advanced materials that are efficient, long lasting and recyclable - thus building a world that lasts forever. Stainless steel, invented a century ago, is an ideal material to create lasting solutions in demanding applications from cutlery to bridges, energy and medical equipment: it is 100% recyclable, corrosion-resistant, maintenance-free, durable and hygienic. Outokumpu employs more than 12 000 professionals in more than 30 countries, with headquarters in Espoo, Finland and shares listed in the Nasdaq Helsinki. www.outokumpu.com

DISCLAIMER

The information contained in this announcement is for background purposes only and does not purport to be full or complete.

This announcement is not for publication or distribution, directly or indirectly, in or into the United States, Canada, Australia, Japan, South Africa or any other jurisdiction in which the same would be unlawful. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes, should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement does not constitute or form part of an offer to sell securities or the solicitation of any offer to subscribe for or otherwise buy any securities to any person in the United States, Canada, Australia, Japan, South Africa or in any jurisdiction to whom or in which such offer or solicitation is unlawful. The securities referred to in this announcement have not been and will not be registered in the United States under the US Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold in the United States unless registered under the Securities Act or offered in a transaction exempt from, or not subject to, the registration requirements of the Securities Act. Subject to certain exceptions, the securities referred to herein may not be offered or sold in Canada, Australia, Japan or South Africa or to, or for the account or benefit of, any national, resident or citizen of Canada, Australia, Japan or South Africa. There will be no public offer of the securities in the United States, Canada, Australia, Japan or South Africa.

The Offering is addressed to, and directed in member states of the European Economic Area which have implemented Directive 2003/71/EC (as amended, the "Prospectus Directive") at, persons who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive ("qualified investors"). In addition, in the United Kingdom, the Offer is directed only at qualified investors (i) who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") and qualified investors falling within Article 49(2)(a) to (d) of the Order or (ii) to whom it may otherwise lawfully be communicated under the Order (all such persons together being referred to as "relevant persons"). This communication must not be acted on or relied on by persons who are not relevant persons in the United Kingdom or qualified investors as the case may be. Any investment or investment activity to which this communication relates is available only to relevant persons in the United Kingdom or qualified investors and will be engaged in only with relevant persons or qualified investors as the case may be.

Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. Persons considering making such investments should consult an authorized person specializing in advising on such investments. This announcement does not constitute a recommendation concerning the Bonds. The value of the Bonds can decrease as well as increase. Potential investors should consult a professional advisor as to the suitability of the Bonds for the person concerned.

Crédit Agricole Corporate and Investment Bank (the "Bookrunner"), is acting exclusively for Outokumpu and no one else in connection with the Offering and will not be responsible to any other person for providing the protections afforded to clients of the Bookrunner or for providing advice in relation to the Offering, the Bonds or any other transaction, matter or arrangement referred to in this announcement.

Unless otherwise required by applicable securities laws, each of Outokumpu and the Bookrunner and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any statement contained in this  announcement whether as a result of new information, future developments or otherwise.

In connection with the Offering, the Bookrunner and any of its affiliates, acting as investors for their own accounts, may subscribe for or purchase securities and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such securities and any other securities of Outokumpu or related investments in connection with the Bonds, Outokumpu or otherwise. Accordingly, references to the securities being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, the Bookrunner and any of its respective affiliates acting as investors for their own accounts. The Bookrunner does not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

Neither the Bookrunner nor any of its respective directors, officers, employees, affiliates, advisers or agents accepts any responsibility, duty or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Outokumpu, its other subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

In connection with the Offering, Crédit Agricole Corporate and Investment Bank or any person acting on behalf of the stabilizing manager (the"Stabilizing Manager") may over-allot Bonds or effect transactions with a view to supporting the market price of the bonds at a level higher than that which might otherwise prevail. However, there is no assurance that the Stabilizing Manager (or any persons acting on behalf of the Stabilizing Manager) will undertake stabilization action. Any stabilization action, if begun, may be ended at any time, but it must end no later than the earlier of 30 days after the issue date of the Bonds and 60 days after the date of allotment of the Bonds. Any stabilization action or over allotment shall be conducted in accordance with all applicable laws and rules.