Notice of Financing by Subordinated Loan

On September 8, 2026, Nippon Steel Corporation (“Nippon Steel”) signed a subordinated loan (the “Loan”) agreement totaling 30 billion yen. The proceeds will be used for the redemption of public subordinated bonds (The 2nd Issue of Unsecured Subordinated Corporate Bonds with interest deferrable clause and early redemption option) issued on September 12, 2019.

The Loan contains features of both equity and liabilities. While its liability aspects will not cause dilution to stockholders, the loan will have attributes and features resembling equity, such as an option to defer interest payments, extremely long-term redemption period, and subordination in liquidation or bankruptcy proceedings. Accordingly, Nippon Steel expects that rating agencies (Rating and Investment Information, Inc., Japan Credit Rating Agency, Ltd., and S&P Global Ratings Japan Inc.) will deem 50% of the raised funds to be equity for the purpose of their ratings.

To strengthen Nippon Steel’s earnings base and implement its global growth strategy—with a view toward Nippon Steel’s goal of achieving annual underlying consolidated business profits of ¥1 trillion or more and global crude steel production capacity of 100 million tons or more—Nippon Steel expects to make total capital and business investments of approximately ¥6 trillion over the next five years. Nippon Steel believes that it is therefore important to take advantage of growth opportunities in a prompt manner and raise funds at an early stage. Furthermore, while Nippon Steel currently maintains a sufficient level of equity capital, achieving sustainable medium- to long-term growth will require diversification of its financing methods, including enhancing capital efficiency by leveraging operating cash flows and asset sales, as well as debt financing, while securing investment funds and strengthening its financial base in order to support the next phase of its growth strategy. Accordingly, Nippon Steel has decided to enter into the loan.

Loan Overview