(Note) This document has been translated from the Japanese original for reference purposes only. In the event of any
discrepancy between this translated document and the Japanese original, the original shall prevail.

August 29, 2018
Company Name: Tokuyama Corporation
Representative Name: Hiroshi Yokota,
Representative Director, President and Executive Officer(Code No. 4043, First Section TSE)
Contact: Taro Kobayashi, General Manager
Corporate Communications & Investor Relations Dept.
TEL: +81-3-5207-2552

Notice Concerning the Procurement of Funds through a New Subordinated Loan

and the Early Repayment of an Existing Subordinated Loan
Tokuyama Corporation (hereinafter “the Company,” “Tokuyama” or “we”) today announces that its Boardof Directors, at a meeting held on August 29, 2018, had decided to procure funds totaling ¥60 billion bydrawing down a new subordinated loan (hereinafter the “New Subordinated Loan”) and to prepay an existing
subordinated loan (hereinafter the “Existing Subordinated Loan”) concluded on March 20, 2014. Brief details
are presented as follows.
1. Objective and Significance of the New Subordinated Loan
This New Subordinated Loan helps enhance the flexibility of the Company’s financial strategy by further
diversifying refinancing methods and reducing financial expenses while fulfilling the replacement clause*1 ofthe Existing Subordinated Loan.
In similar fashion to the Existing Subordinated Loan, it is expected that ratings agencies (Rating andInvestment Information, Inc. and Japan Credit Rating Agency, Ltd.) will recognize the New Subordinated
Loan as having equity credit attributes. This will then help in maintaining the continued financial soundnessof the Company. Moreover, procuring funds in this manner will not lead to any subsequent dilutive effect on
Tokuyama’s shares because the New Subordinated Loan does not include any conversion rights into
common stock. Taking into consideration the financial market’s positive environment compared withconditions at the time the Existing Subordinated Loan was concluded, the potential also exists to reduce
financial expenses.
*1 A clause to the effect that Tokuyama will procure funds within a 12-month period before the date on
which it will make an early repayment that have been approved by ratings agencies as having equity credit
attributes equal to or greater than the Existing Subordinated Loan in the case of an early repayment of theExisting Subordinated Loan.
12. Overview of the New Subject Subordinated Loan
A final decision regarding the terms and conditions of the New Subordinated Loan is scheduled to be madeon September 13, 2018. Tokuyama is currently considering the following terms and conditions. The
Company will disclose all pertinent details as and when determined in a timely manner.
Total amount of the funds¥60 billion

to be procured (planned):
Scheduled date ofSeptember 13, 2018agreement execution:
Scheduled drawdown date:

September 20, 2018

Application of funds:

Early repayment of the Existing Subordinated Loan

Scheduled final repayment

September 20, 2078

date:

However, Tokuyama may make an early repayment of all or aportion of the principal of the New Subordinated Loan on any
interest payment date on a date five years or later after thedrawdown of the New Subordinated Loan.

Replacement clause:

In the case of an early repayment of the New Subordinated Loan,
Tokuyama intends to procure funds, within a six-month period
before the date on which it will make that early repayment, thathave been approved by ratings agencies as having equity credit
attributes equal to or greater than the New Subordinated Loan.
However, the Company may make an early repayment of the New
Subordinated Loan five years or later after the drawdown of theNew Subordinated Loan except in those cases that satisfy any of thefollowing:(1) The amount of shareholders’ equity in the Company’s mostrecent consolidated balance sheet at the time the announcement
to make an early repayment is made stands at ¥179.2 billion ormore, and(2) The Company’s D/E ratio based on its most recent
consolidated balance sheet at the time the announcement tomake an early repayment is made comes in at 0.9 times or less2

3. Details of Early Repayment of the Existing Subordinated Loan
Scheduled date of early

September 20, 2018

repayment:
Planned early repayment¥60 billion

amount:Matters relating to earlyIn accordance with the early repayment clause of the Existing

repayment:

Subordinated Loan, repayment is based on the consent of alllenders prior to the possible early repayment date of March 20, 2019

For further details on the Existing Subordinated Loan, please refer to the release, “Notice concerning
the Procurement of Funds through a Subordinated Loan,” on March 11, 2014.
4. Impact on the Company’s Performance
The impact of the aforementioned activities on the Company’s consolidated performance forecasts for thefiscal year ending March 31, 2019 is minimal.

3