2104 Hybrid Bond, 1.3 bn. euros, 5.375%

In November 2005, Henkel issued a subordinate hybrid bond in the amount of 1.3 billion euros for the purpose of financing a major portion of the Company’s pension obligations in Germany. The proceeds of the bond were allocated to a special-purpose CTA (Contractual Trust Arrangement).

The bond has a maturity until November 25, 2104. However, it is redeemable at the option of Henkel on November 25, 2015 or any interest payment date thereafter at the principal amount.
 
The bond bears interest of 5.375% until November 25, 2015. Thereafter, unless previously redeemed, the bond will bear floating interest at the Euro-zone inter-bank offered rate for three-month Euro deposits plus 1.85% plus a step-up of 1.00 percentage points.

Henkel has the option of a coupon deferral if the Adjusted Operating Cash Flow is less than 20% of the Adjusted Debt (for definitions and prior development of this ratio, please see document “Calculation trigger ratio” below).
If the Adjusted Operating Cash Flow is less than 15% of the Adjusted Debt, the coupon deferral is mandatory for Henkel. In this case, Henkel can elect to make coupon payment through two alternative mechanisms, subject to certain constraints.

In case of an optional or mandatory coupon deferral, the coupon must be paid within 12 months following a resolution of the annual general meeting to distribute a dividend, or with a lapse of 5 years, whatever occurs earlier.

Additional information is provided in the documents below.

In May 2003, Henkel KGaA issued a senior bond for 1.0 billion euros. This is also described as a benchmark bond because, due to its large volume and its liquidity, it provides a good yardstick for the market’s assessment of Henkel’s creditworthiness. Additional information is provided in the documents below.

Bonds are usually issued under standardized conditions in the framework of a Debt Issuance Programme. This is explained in the Information Memorandum, which serves as prospectus in Germany and Luxembourg. Under this program, which was last updated on November 27, 2008, Henkel can issue up to 3 bill. euros in securities.