MTU Aero Engines AG / Key word(s): Issue of Debt 11.05.2016 08:02 Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- Ad hoc Not for release, publication or distribution, directly or indirectly, in or into the United States, Australia, Canada or Japan or any other jurisdiction in which the distribution or release would be unlawful. MTU Aero Engines AG launches convertible bond offering - Issue volume of EUR 500 million, 7 year maturity - Proceeds to be used for the optimization of debt structure, e.g. for the repayment of the outstanding bond due in June 2017, continued investment in accordance with communicated investment policy and for general corporate purposes Munich, May 11, 2016: The executive board of MTU Aero Engines AG (the "Company"), with the approval of the Company's supervisory board, resolved today on the offering of senior, unsecured convertible bonds in an aggregate principal amount of EUR 500 million (the "Bonds"), convertible into new and/or existing no-par value ordinary registered shares of the Company (the "Ordinary Shares"). MTU Aero Engines AG is using an authorization from its annual general meeting in 2015 for the issuance of the Bonds, which provides for an exclusion of subscription rights. The Bonds will have a maturity of 7 years and will be issued in a denomination of EUR 100,000 each. The Bonds are expected to bear interest at a rate between 0.125 - 0.625% per annum, payable annually in arrear, and will have a conversion premium of 40 - 50% above the volume-weighted average price of the Ordinary Shares on XETRA between launch and pricing. The final terms of the Bonds are expected to be announced later today through a separate press release, and settlement is expected to take place on or around 17 May 2016. The Company will have the option to redeem the Bonds at their principal amount (plus accrued but unpaid interest) in accordance with the terms and conditions of the Bonds at any time (i) on or after 16 June 2020, if the price of the Ordinary Shares is equal to or exceeds 130% of the then prevailing conversion price over a specified period or (ii) if 20% or less of the aggregate principal amount of the Bonds remains outstanding. The Company intends to use the net proceeds of the offering for the optimization of its debt structure, e.g. for the repayment of the outstanding bond due in June 2017, continued investment in accordance with its communicated investment policy and for general corporate purposes. The Bonds will be placed in an accelerated bookbuilding only to institutional investors outside the United States in reliance on Regulation S (Category 1) under the United States Securities Act of 1933 as amended, as well as outside of Australia, Japan and any other jurisdiction in which offers or sales of the Bonds would be prohibited by applicable law. -END- IMPORTANT NOTE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH, OR TO PERSONS IN ANY JURISDICTION TO WHOM, SUCH DISTRIBUTION WOULD BE UNLAWFUL This release is for information purposes only and does not constitute, contain or form part of, and should not be construed as, an offer or an invitation to sell, or issue or the solicitation of any offer to buy or subscribe for, any securities. In connection with this transaction there has not been, nor will there be, any public offering of the Bonds. No prospectus will be prepared in connection with the offering of the Bonds. The Bonds may not be offered to the public in any jurisdiction under circumstances which would require the issuer of the Bonds to prepare or register any prospectus or offering document relating to the Bonds in such jurisdiction. The distribution of this release and the offer and sale of the Bonds in certain jurisdictions may be restricted by law. Any persons reading this release should inform themselves of and observe any such restrictions. This release does not constitute an offer to sell or a solicitation of an offer to purchase any securities in the United States. Any securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or the laws of any state within the U.S., and may not be offered or sold in the United States absent registration or an applicable exemption from registration or in a transaction not subject to the registration requirements of the Securities Act. There will be no offering of the Bonds in the United States. This release and the information contained herein may not be distributed or sent into the United States, or in any other jurisdiction in which offers or sales of the securities described herein would be prohibited by applicable laws and should not be distributed to publications with a general circulation in the United States. The Bonds are being offered and sold outside the United States only in reliance on Regulation S under the Securities Act. In the United Kingdom, this release is only being distributed to and is only directed at (i) persons 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 (the "Order") and (ii) high net worth entities falling within Article 49(2) of the Order and (iii) persons to whom it would otherwise be lawful to distribute it (all such persons together being referred to as "Relevant Persons"). The Bonds are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such Bonds will be engaged in only with, Relevant Persons. Any person who is not a Relevant Person should not act or rely on this release or any of its contents. 11.05.2016 The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: English Company: MTU Aero Engines AG Dachauer Straße 665 80995 München Germany Phone: +49 (0)89 14 89-8473 Fax: +49 (0)89 14 89-95292 E-mail: [email protected] Internet: www.mtu.de ISIN: DE000A0D9PT0, XS0787483626, WKN: A0D9PT, A1PGW5 Indices: MDAX Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart; Terminbörse EUREX End of Announcement DGAP News-Service ---------------------------------------------------------------------------