Notice Regarding the Issuance of Euro Yen-Denominated Convertible Bonds with Warrants Maturing in 2029 and 2031

Overview of Convertible Bonds with Warrants Issuance

Nippon Steel Corporation has decided to issue a total of 550 billion yen (275 billion yen each) of Euro Yen-denominated convertible bonds with warrants maturing in 2029 and 2031. The issuance date is scheduled for March 12, 2026, and the offering will be conducted mainly in overseas markets in Europe and Asia (excluding the U.S.). The bonds will be zero-coupon with no interest payable, and the conversion price will be set at a level not below the stock price at issuance. The exercise period for the conversion rights is from March 26, 2026 to January 31, 2029 and January 31, 2031, respectively.

Use of Proceeds and Financial Strategy

The net proceeds of approximately 550 billion yen will be allocated to repay the approximately 2 trillion yen bridge loan related to the US Steel acquisition by June 2026. This will strengthen the company’s financial position in preparation for executing its medium- to long-term growth strategy. Additionally, the company has already raised funds through subordinated syndicated loans with special provisions, public subordinated bonds with special provisions, and committed subordinated term loans. The issuance of these convertible bonds with warrants is intended to complete the financing. Regarding shareholder return, the company targets a consolidated dividend payout ratio of about 30% annually, and sets a floor on annual dividend per share at 24 yen for the five fiscal years from FY2027 through FY2031.