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

July 27, 2023
Company Name: Tokuyama Corporation
Representative Name: Hiroshi Yokota,
Representative Director, President and Executive Officer(Code No. 4043, Prime Market, TSE)
Contact: Tetsuya Nakano, General Manager
Corporate Communications & Investor Relations Dept.
TEL: +81-3-5207-2552

Notice Concerning the Early Repayment of an Existing Subordinated Loan
Tokuyama Corporation (hereinafter “the Company,” “Tokuyama” or “we”) has decided at a Board ofDirectors’ meeting held on July 27, 2023 to prepay an existing subordinated loan (hereinafter the“Existing Subordinated Loan”) totaling ¥60 billion procured on September 20, 2018. Brief details arepresented as follows.
1. Background of the Early Repayment(1)

The Company took out the Existing Subordinated Loan to fund the early repayment of theSubordinated Loan procured on March 20, 2014 in an effort to maintain its financial
soundness, increase the agility and flexibility of its financial strategy by diversifying its
refinancing instruments, and reduce financial expenses.

(2)

The Company formulated its Medium-Term Management Plan 2025 in February 2021, and has
been working to improve its financial position, and build and grow new businesses.

(3)

As a result, the criteria for exceptions (i) and (ii) set forth in “Replacement Clause” in “3.
Overview of the Existing Subordinated Loan” below have been achieved (*1), and the loan
will be repaid early using cash on hand and borrowings. Of note, the impact of thisprepayment on the Company's consolidated earnings for the fiscal year ending March 31, 2024
will be minor.

*1: Consolidated shareholders’ equity as of June 30, 2023 was ¥219.0 billion, and the consolidated
D/E ratio was 0.62 times.
2. Details of Early Repayment of the Existing Subordinated Loan
Early repayment date
20 September, 2023
Early repayment amount¥60 billion

Circumstances surrounding
early repayment

The Subordinated Loan will be repaid in accordance with theprepayment clause of the Subordinated Loan.

13. Overview of the Existing Subordinated Loan
Total amount of the funds¥60 billionto be procured (planned):
Date of agreement

September 13, 2018

execution:
Drawdown date:

September 20, 2018

Application of funds:

Early repayment of the Existing Subordinated Loan

Final repayment date:

September 20, 2078
However, Tokuyama may make an early repayment of all or a
portion 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 SubordinatedLoan, Tokuyama intends to procure funds, within a six-month
period before the date on which it will make that early
repayment, that have 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 theNew Subordinated Loan five years or later after the drawdownof the New Subordinated Loan except in those cases thatsatisfy any of the following:(1) The amount of shareholders’ equity in the Company’s mostrecent consolidated balance sheet at the time theannouncement to make an early repayment is made stands
at ¥179.2 billion or more, and(2) The Company’s D/E ratio based on its most recent
consolidated balance sheet at the time the announcement
to make an early repayment is made comes in at 0.9 times
or less

Applicable interest rate:

A floating rate of interest based on three-month JPY TIBOR
from September 20, 2018 to September 20, 2023; stepped up
floating rate (1% higher) from September 20, 2023.

Mandatory suspension ofThe interest payable on the relevant interest payment date shallinterest:

be deferred in full when (a) the EBITDA margin is less than
8% for the most recent two consecutive fiscal years withrespect to the Company’s annual consolidated financial
statements, or (b) when the ratio of net liabilities to total
capital exceeds 70% with respect to the Company’s annual orinterim period consolidated financial statements.
2

In addition to the aforementioned, interest payable shall bedeferred either in part or in full when the distributable amountis less than the required amount.
Optional suspension of

Tokuyama may, at its discretion, suspend payment of all or ainterest:

portion of the interest.

Subordination:In the event liquidation proceedings are commenced, thedecision to commence bankruptcy proceedings is made, or thedecisiontocommence

corporate

reorganization,

civilrehabilitation, or any other proceedings is made against theCompany, the provider of the New Subordinated Loan may
request repayment under the agreement after the repayment of
all liabilities in full excluding other liabilities of a similar natureincluding preferred stock and the New Subordinated Loan.
Any change to the terms and conditions of the New
Subordinated Loan that disadvantage any creditors of theaforementioned liabilities shall not be recognized.
Equity credit attributes ofClass 4 / 70% (Ratings and Investment Information, Inc.)

the New SubordinatedHigh / 75% (Japan Credit Rating Agency, Ltd.)

Loan evaluated by ratings
agencies:
Investors (lenders)

MUFG Bank, Ltd.

participating in the New

Mizuho Bank, Ltd.

Subordinated Loan:

The Yamaguchi Bank, Ltd.
Three other banks〔End〕3