GRENKE AG GRENKE FINANCE PLC

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1 Debt Issuance Programme Prospectus dated 15 February 2017 This document constitutes two base prospectuses: (i) the base prospectus of GRENKE AG in respect of nonequity securities within the meaning of Art. 22 No. 6(4) of the Commission Regulation (EC) No. 809/2004 of 29 April 2004, as amended ("Non-Equity Securities") and (ii) the base prospectus of GRENKE FINANCE PLC in respect of Non-Equity Securities (together, "Debt Issuance Programme Prospectus" or the "Prospectus"). GRENKE AG (Baden-Baden, Federal Republic of Germany) as Issuer and, in respect of Notes issued by GRENKE FINANCE PLC, as Guarantor and GRENKE FINANCE PLC (Dublin, Ireland) as Issuer 2,000,000,000 Debt Issuance Programme (the "Programme") Application has been made to list notes (the "Notes") to be issued under the Programme on the official list of and to trade Notes on the regulated market Bourse de Luxembourg (which is a regulated market for the purposes of the Market and Financial Instruments Directive 2004/39/EC, as amended) (the "Regulated Market") of the Luxembourg Stock Exchange. Notes issued under the Programme may also not be listed at all. The payments of all amounts due in respect of Notes issued by GRENKE FINANCE PLC will be unconditionally and irrevocably guaranteed by GRENKE AG. Each Issuer has requested the Commission de Surveillance du Secteur Financier of the Grand Duchy of Luxembourg (the "CSSF") in its capacity as competent authority under the Luxembourg Law relating to prospectuses for securities, as amended, (Loi relative aux prospectus pour valeurs mobilières, the "Luxembourg Law"), which implements the Directive 2003/71/EC of the European Parliament and the Council of 4 November 2003, as amended (the "Prospectus Directive"), to approve this Prospectus, which constitutes a prospectus within the meaning of Article 5.4 of the Prospectus Directive, and to provide the competent authorities in the Federal Republic of Germany, the Republic of Austria, the Republic of Ireland, the United Kingdom of Great Britain and Northern Ireland and The Netherlands with a certificate of approval attesting that the Prospectus has been drawn up in accordance with the Luxembourg Law (each a "Notification"). Each Issuer may request the CSSF to provide competent authorities in additional host Member States within the European Economic Area with a Notification. By approving a prospectus, the CSSF shall give no undertaking as to the economic and financial soundness of the operation or the quality or solvency of the issuer pursuant to Article 7(7) Luxembourg Law. Deutsche Bank Arranger Deutsche Bank Dealers HSBC This Prospectus will be published in electronic form on the website of the Luxembourg Stock Exchange ( and on the website of GRENKE AG ( This Prospectus succeeds the Debt Issuance Programme Prospectus dated 12 February 2016 and is valid for a period of 12 months after its approval.

2 RESPONSIBILITY STATEMENT GRENKE AG (until 10 May 2016: GRENKELEASING AG), with its registered office in Baden-Baden, Federal Republic of Germany ("GRENKE AG", an "Issuer" or the "Guarantor", and together with its consolidated subsidiaries and structured entities the "GRENKE Group") and GRENKE FINANCE PLC, with its registered office in Dublin, Ireland ("GRENKE FINANCE PLC", an "Issuer" and, together with GRENKE AG, the "Issuers") are solely responsible for the information given in this Prospectus and for the information which will be contained in the Final Terms (as defined below). Each Issuer hereby declares that, having taken all reasonable care to ensure that such is the case, the information contained in this Prospectus for which it is responsible is, to the best of its knowledge, in accordance with the facts and contains no omission likely to affect its import. NOTICE This Prospectus should be read and understood in conjunction with any supplement to the Prospectus and with any other document incorporated herein by reference. Full information on the Issuers and any tranche of Notes is only available on the basis of the combination of this Prospectus and the relevant final terms (the "Final Terms"). The Issuers accept responsibility for the information contained in this Prospectus and have confirmed to the dealers set forth on the cover page (each a "Dealer" and together the "Dealers") that this Prospectus contains all information with regard to the Issuers and the Notes which is material in the context of the Programme and the issue and offering of Notes thereunder, that the information contained in this Prospectus with respect to the Issuers and the Notes is accurate and complete in all material respects and is not misleading; that any opinions and intentions expressed herein with respect to the Issuers and the Notes are honestly held; that there are no other facts, the omission of which would make this Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect; and that the Issuers have made all reasonable enquiries to ascertain all facts material for the purposes aforesaid. Each of the Issuers and the Guarantor have undertaken with the Dealers to publish a supplement to this Prospectus or to publish a new Prospectus subject to applicable laws if and when the information herein should become materially inaccurate or incomplete or in the event of any significant new factor, material mistake or inaccuracy relating to the information included in this Prospectus which is capable of affecting the assessment of the Notes and, where approval by the CSSF of any such document is required, upon such approval having been given. No person has been authorised to give any information which is not contained in or not consistent with this Prospectus or any other information supplied in connection with the Programme and, if given or made, such information must not be relied upon as having been authorised by or on behalf of either Issuer or any of the Dealers. This Prospectus is valid for twelve months after its approval and it and any supplement to the Prospectus as well as any Final Terms reflect the status as of their respective dates of issue. The offering, sale or delivery of any Notes may not be taken as an implication that the information contained in such documents is accurate and complete subsequent to their respective dates of issue or that there has been no adverse change in the financial condition of the Issuers since such date or that any other information supplied in connection with the Programme is accurate at any time subsequent to the date on which it is supplied or, if different, the date indicated in the document containing the same. To the extent permitted by the laws of any relevant jurisdiction, neither the Arranger nor any Dealer nor any other person mentioned in this Prospectus, excluding the Issuers, is responsible for the information contained in this Prospectus or any supplement to this Prospectus, or any Final Terms or any other document incorporated herein by reference. Any investment in Notes issued by GRENKE FINANCE PLC does not have the status of a bank deposit and is not within the scope of the deposit protection scheme operated by the Central Bank of Ireland. The distribution of this Prospectus and any Final Terms and the offering, sale and delivery of Notes in certain jurisdictions may be restricted by law. Persons into whose possession this Prospectus or any Final Terms come are required to inform themselves about and observe any such restrictions. For a description 2

3 of the restrictions on offers, sales and deliveries of Notes and on the distribution of the Prospectus or any Final Terms and other offering material relating to the Notes applicable in the United States of America, the European Economic Area in general, the United Kingdom, Ireland, France and Japan see "Selling Restrictions" below. In particular, the Notes have not been and will not be registered under the United States Securities Act of 1933, as amended, and are subject to tax law requirements of the United States of America; subject to certain exceptions, Notes may not be offered, sold or delivered within the United States of America or to U. S. persons. The language of this Prospectus is English. The German versions of the English language Terms and Conditions and Guarantee are shown in this Prospectus for additional information. As to form and content, and all rights and obligations of the Holders and the Issuer under the Notes to be issued, German is the controlling legally binding language if so specified in the Final Terms. In respect of the Guarantee, the German language version is always controlling and legally binding as to form and content, and all rights and obligations of the Holders and the Guarantor thereunder. The Issuer confirms that in such case the nonbinding English text of the Terms and Conditions correctly and adequately reflects the binding German language version of the Terms and Conditions. Each Dealer and/or each further financial intermediary subsequently reselling or finally placing Notes issued under the Programme is entitled to use the Prospectus as set out in "Consent to the Use of the Prospectus" below. Neither this Prospectus nor any Final Terms may be used for the purpose of an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such an offer or solicitation. Neither this Prospectus nor any Final Terms constitutes an offer or invitation by or on behalf of the Issuers or the Dealers to any person to subscribe for or to purchase any Notes. In connection with the issue of any Tranche of Notes under the Programme, the Dealer or Dealers (if any) named as the stabilising manager(s) (or persons acting on behalf of any stabilising manager(s)) in the applicable Final Terms may over-allot Notes or effect transactions with a view to supporting the price of the Notes at a level higher than that which might otherwise prevail. However, there is no assurance that the stabilising manager(s) (or persons acting on behalf of any stabilising manager(s)) will undertake stabilisation action. Any stabilisation action may begin at any time after the adequate public disclosure of the terms of the offer of the relevant Tranche of Notes and, if begun, may be ended at any time, but it must end no later than the earlier of 30 days after the issue date and 60 days after the date of the allotment of the relevant Tranche of Notes. Any stabilisation action or over-allotment must be conducted by the relevant stabilising manager(s) (or persons acting on behalf of any stabilising manager(s)) in accordance with all applicable laws and rules. Any websites included in the Prospectus, except for the website are for information purposes only and do not form part of the Prospectus. FORWARD-LOOKING STATEMENTS This Prospectus contains certain forward-looking statements. A forward-looking statement is a statement that does not relate to historical facts and events. They are based on analyses or forecasts of future results and estimates of amounts not yet determinable or foreseeable. These forward-looking statements are identified by the use of terms and phrases such as "anticipate", "believe, "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will" and similar terms and phrases, including references and assumptions. This applies, in particular, to statements in this Prospectus containing information on future earning capacity, plans and expectations regarding GRENKE Group's business and management, its growth and profitability, and general economic and regulatory conditions and other factors that affect it. Forward-looking statements in this Prospectus are based on current estimates and assumptions that the Issuers make to the best of their present knowledge. These forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results, including GRENKE Group's financial condition and results of operations, to differ materially from and be worse than results that have expressly or implicitly been assumed or described in these forward-looking statements. GRENKE Group's business is also subject to a number of risks and uncertainties that could cause a forward-looking statement, estimate or prediction in this Prospectus to become inaccurate. Accordingly, investors are strongly advised to read the following sections of this Prospectus: "Risk Factors", "GRENKE AG as Issuer and Guarantor" and "GRENKE FINANCE PLC as Issuer". These sections include more detailed descriptions of factors that 3

4 might have an impact on GRENKE Group's business and the markets in which it operates. In light of these risks, uncertainties and assumptions, future events described in this Prospectus may not occur. In addition, neither the Issuers nor the Dealers assume any obligation, except as required by law, to update any forward-looking statement or to conform these forward-looking statements to actual events or developments. 4

5 TABLE OF CONTENTS Summary... 7 Section A Introduction and Warnings... 7 Section B Issuer and Guarantor... 8 Section B Issuer Section C Securities Section D Risks Risks specific to GRENKE AG as Issuer and Guarantor Risks specific to GRENKE FINANCE PLC as Issuer Risks specific to the Securities Section E Offer German Translation of the Summary Abschnitt A Einleitung und Warnhinweise Abschnitt B Emittentin und Garantin Abschnitt B Emittentin Abschnitt C Wertpapiere Abschnitt D Risiken Risiken, die der GRENKE AG als Emittentin und Garantin eigen sind Risiken, die der GRENKE FINANCE PLC als Emittentin eigen sind Risiken, die den Wertpapieren eigen sind Abschnitt E Angebot Risk Factors Risk Factors regarding GRENKE AG as Issuer and Guarantor Risk Factors regarding GRENKE FINANCE PLC Risk Factors regarding the Notes GRENKE AG as Issuer and Guarantor Selected Financial Information Liabilities and Equity of GRENKE AG History and Development of GRENKE AG Investments Known Trends Business Overview and Principal Markets Organisational Structure Acquisitions Material adverse change in the prospects of the Issuer Administrative, Management and Supervisory Bodies Conflict of Interests Board Practices Controlling Persons Historical Financial Information Auditors Legal, Arbitration and Other Proceedings Significant Change in GRENKE AG's Financial or Trading Position Share Capital Articles of Association Rating GRENKE FINANCE PLC as Issuer Selected Financial Information Liabilities and Equity of GRENKE FINANCE PLC History and Development of GRENKE FINANCE PLC Investments Business Overview Organisational Structure Material adverse change in the prospects of the Issuer Administrative, Management and Supervisory Bodies Conflict of Interests Board Practices Controlling Persons

6 Historical Financial Information Auditors Legal and Arbitration Proceedings Significant Change of GRENKE FINANCE PLC's Financial or Trading Position Share Capital Memorandum of Association Rating Consent to the Use of the Prospectus General Description of the Programme Issue Procedures Terms and Conditions of the Notes Option I - Terms and Conditions that apply to Notes with fixed interest rates Option II - Terms and Conditions that apply to Notes with floating interest rates Terms and Conditions of the Notes German Language Version Option I - Anleihebedingungen für Schuldverschreibungen mit fester Verzinsung Option II - Anleihebedingungen für Schuldverschreibungen mit variabler Verzinsung Form of Guarantee and Negative Pledge Form of Final Terms Description of Rules Regarding Resolution of Holders Taxation General Information Selling Restrictions Use of Proceeds Listing and Trading Information Interest of Natural and Legal Persons involved in the Issue/Offer Authorisation Documents on Display Documents Incorporated by Reference Cross Reference List of Documents Incorporated by Reference Availability of Documents Incorporated by Reference Names and Addresses

7 SUMMARY Summaries are made up of disclosure requirements known as "Elements". These elements are numbered in Sections A E (A.1 E.7). This summary (the "Summary") contains all the Elements required to be included in a summary for this type of Notes and Issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted in the Summary because of the type of Notes and Issuer, it is possible that no relevant information can be given regarding the Element. In this case, a short description of the Element is included in the Summary with the mention of "not applicable". [The Summary contains options, characterised by square brackets or typesetting in italics (other than the respective translations of specific legal terms), and placeholders regarding the Notes to be issued under the Programme. The summary of the individual issue of Notes will include the options relevant to this issue of Notes as determined by the applicable Final Terms and will contain the information, which had been left blank, as completed by the applicable Final Terms.] 1 Element Section A Introduction and warnings A.1 Warnings Warning that: this Summary should be read as an introduction to the Prospectus; any decision to invest in the Notes should be based on consideration of the Prospectus as a whole by the investor; where a claim relating to the information contained in the Prospectus is brought before a court, the plaintiff investor might, under the national legislation of the Member State, have to bear the costs of translating the Prospectus, before the legal proceedings are initiated; and civil liability attaches only to the Issuers who have tabled the Summary including any translation thereof, but only if the Summary is misleading, inaccurate or inconsistent when read together with the other parts of the Prospectus or it does not provide, when read together with the other parts of the Prospectus, key information in order to aid investors when considering whether to invest in such Notes. A.2 Consent to the use of the Prospectus [Each Dealer and/or each further financial intermediary subsequently reselling or finally placing the Notes is entitled to use the Prospectus for the subsequent resale or final placement of the Notes during the offer period for the subsequent resale or final placement of the Notes from [ ] to [ ], provided however, that the Prospectus is still valid in accordance with Article 11(2) of the Luxembourg act relating to prospectuses for securities (Loi relative aux prospectus pour valeurs mobilières), as amended, which implements Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003 (as amended). The Prospectus may only be delivered to potential investors together with all supplements published before such delivery. Any supplement to the Prospectus is available for viewing in electronic form on the website of the Luxembourg Stock Exchange ( and on the website of GRENKE AG ( When using the Prospectus, each Dealer and/or relevant further 1 To be deleted in the issue-specific Summary. 7

8 financial intermediary must make certain that it complies with all applicable laws and regulations in force in the respective jurisdictions. In the event of an offer being made by a Dealer and/or a further financial intermediary the Dealer and/or the further financial intermediary shall provide information to investors on the terms and conditions of the Notes at the time of that offer.] [Not applicable. No consent has been given.] Element Section B [Issuer] [Guarantor] B.1 Legal and commercial name B.2 Domicile / Legal form / Legislation / Country of incorporation B.4b Known trends affecting the Issuer and the industries in which it operates B.5 Description of the Group and the Issuer's position within the Group B.9 Profit forecast or estimate B.10 Nature of any qualifications in the audit report on historical financial information GRENKE AG GRENKE AG was incorporated in the Federal Republic of Germany as a stock corporation under German Law and operates under German Law. The registered office is located at Neuer Markt 2, Baden-Baden, Federal Republic of Germany. The markets for lease assets in the IT-sector are subject to price and business competition. In addition, the current macroeconomic events may lead to reduced levels of investment in IT and therefore reduced new leasing business. Additionally, rising insolvencies may lead to less demand to new leasing business. The already experienced decline in prices for ITproducts can impact GRENKE AG's earnings. No assurance can be given that other competitors in the leasing sector will not seek access to this market segment and thus not impact the earnings situation of GRENKE AG. GRENKE AG is the ultimate parent company of GRENKE Group. Not applicable. No profit forecast or estimate has been included. Not applicable. The audit opinions with respect to the consolidated financial statements of GRENKE AG as of and for the financial years ended 31 December 2016 and 2015 do not include any qualifications. B.12 Selected historical key financial information The following table shows selected financial information of GRENKE AG extracted or derived from the audited consolidated financial statements as of and for the financial year ended 31 December These consolidated financial statements have been prepared on the basis of the International Financial Reporting Standards, as adopted by the EU, ("IFRS") and the additional requirements of German commercial law pursuant to Section 315a(1) German Commercial Code (HGB). Consolidated Statement of Financial Position Data of GRENKE AG 31 Dec Dec (in thousand) Total assets... 3,971,452 3,474,530 Current and non-current lease receivables... 3,270,110 2,854,172 Current and non-current financial liabilities - asset-based, senior unsecured and committed development loans... 2,702,143 2,341,080 Total equity , ,654 8

9 Liabilities and Equity Current liabilities 31 Dec Dec (in thousand) Financial liabilities - asset-based, senior unsecured and committed development loans , ,787 Current liabilities from deposit business , ,997 Deferred lease payments... 31,908 82,908 Miscellaneous current liabilities 1)... 71,847 56,404 Total current liabilities... 1,328,512 1,199,096 Non-current liabilities Financial liabilities - asset-based, senior unsecured and committed development loans... 1,705,511 1,482,293 Non-current liabilities from deposit business , ,307 Deferred tax liabilities... 51,514 48,619 Miscellaneous non-current liabilities 2)... 6,532 5,561 Total non-current liabilities... 1,952,520 1,684,780 Equity Share capital... 18,881 18,859 Capital reserves , ,491 Retained earnings , ,068 Other components of equity... 1,148 5,465 Additional equity components 3)... 52,541 30,771 Total equity , ,654 Total liabilities and equity... 3,971,452 3,474,530 1) Miscellaneous current liabilities comprise current other bank liabilities, current liability financial instruments, trade payables, tax liabilities, deferred liabilities, current provisions and other current liabilities. 2) Miscellaneous non-current liabilities comprise non-current liability financial instruments and pensions. 3) Including an AT1 bond (hybrid capital), which represents an unsecured and subordinated bond of GRENKE AG that is reported as equity under IFRS. Consolidated Income Statement Data of GRENKE AG 1 Jan to 31 Dec Jan to 31 Dec (in thousand, unless otherwise indicated) Net interest income , ,204 Settlement of claims and risk provision... 55,089 59,369 Net interest income after settlement of claims and risk provision , ,835 Profit from service business 1)... 59,279 50,801 Profit from new business... 58,799 50,068 Gains(+)/losses(-) from disposals... -5, Income from operating business , ,060 Staff costs... 70,624 63,190 Selling and adminstrative expenses (not including staff costs)... 58,380 52,689 9

10 1 Jan to 31 Dec Jan to 31 Dec (in thousand, unless otherwise indicated) Earnings before taxes , ,461 Net profit ,234 80,845 Earnings per share (basic/diluted) in ) The previous designation "Profit from insurance business" in the consolidated financial statements as of and for the financial year ended 31 December 2015 was changed in the consolidated financial statements as of and for the financial year ended 31 December 2016 for reasons of clarity. Statement of no material adverse change Significant change in the financial and trading position There has been no material adverse change in the prospects of GRENKE AG since the date of its last published audited consolidated financial statements, 31 December Not applicable. There has been no significant change in the financial or trading position of GRENKE AG since 31 December B.13 Recent events Not applicable. There are no recent events particular to GRENKE AG which are to a material extent relevant to the evaluation of its solvency. B.14 Please see Element B.5 Statement of dependency upon other entities within the group Not applicable. GRENKE AG is not dependent upon other entities within the GRENKE Group. B.15 Principal activities GRENKE AG is a specialised service provider for the financing of mainly IT Products such as notebooks, personal computers, monitors and other peripheral units, servers, software, telecommunication and copying equipment as well as medical, wellness and cleaning equipment, small machinery and security equipment. B.16 Controlling Persons According to No. 2.3 of the Guide to the Equity Indices of Deutsche Börse AG the shareholder structure is as follows: Grenke Beteiligung GmbH & Co. KG: 42.66% Freefloat: 57.34% In July 2014, Mr and Mrs Grenke, together with their sons Moritz Grenke, Roland Grenke, and Oliver Grenke (the "Grenke family"), have established a family company under the name of Grenke Beteiligung GmbH & Co. KG, to which the Grenke family contributed all of their shares held in GRENKE AG on 17 September Following the contribution, Grenke Beteiligung GmbH & Co. KG now holds a total of 6,301,986 shares in GRENKE AG. This represents the Grenke family's interest in GRENKE AG's share capital of approximately 42.66%. B.17 Credit ratings of the Issuer or its debt securities Standard & Poor's Credit Market Services Europe Limited ("Standard & Poor's") 1,4 has assigned a rating of BBB+ (stable outlook) 2 to GRENKE AG as counterparty, a rating of BBB+ to its 1 2 Standard & Poor's is established in the European Community and is registered under Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies, as amended (the "CRA Regulation"). A credit rating assesses the creditworthiness of an entity and informs an investor therefore about the probability of the entity being able to redeem invested capital. It is not a recommendation to buy, sell or hold securities and may be revised or withdrawn by the rating agency at any time. "BBB" means "adequate capacity to meet financial commitments, but more subject to adverse economic conditions". Ratings from "AA" to "CCC" may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories. 10

11 [B.18 Nature and scope of the Guarantee long term senior unsecured debt and a rating of BBB- to its long term senior subordinated debt. GBB-Rating Gesellschaft für Bonitätsbeurteilung mbh ("GBB") 3,4 has assigned a rating of A (stable outlook) 5 to GRENKE AG as counterparty and to its long term senior unsecured debt. Notes issued by GRENKE FINANCE PLC will have the benefit of a Guarantee (the "Guarantee") given by GRENKE AG (the "Guarantor"). The Guarantee constitutes an irrevocable, unsecured and unsubordinated obligation of the Guarantor ranking pari passu with all other unsecured and unsubordinated obligations of the Guarantor. The terms of the Guarantee contain a negative pledge of the Guarantor. The Guarantee will be governed by German law. The Guarantee constitutes a contract for the benefit of the Holders from time to time as third party beneficiaries pursuant to 328 paragraph 1 German Civil Code (Bürgerliches Gesetzbuch BGB).] [Element Section B Issuer B.1 Legal and commercial name B.2 Domicile / Legal form / Legislation / Country of incorporation B.4b Known trends affecting the Issuer and the industries in which it operates B.5 Description of the Group and the Issuer's position within the Group B.9 Profit forecast or estimate B.10 Nature of any qualifications in the audit report on historical financial information GRENKE FINANCE PLC GRENKE FINANCE PLC was incorporated in Ireland as a public company with limited liability under the laws of Ireland and operates under the laws of Ireland. GRENKE FINANCE PLC has its registered office at Q House, Suite 306, Furze Road, Sandyford Industrial Estate, Dublin 18, Ireland. GRENKE FINANCE PLC's ability to raise funding for the GRENKE Group depends primarily on the guarantee provided by GRENKE AG and thus the indirect rating provided to GRENKE FINANCE PLC through this guarantee. GRENKE FINANCE PLC has no holdings, subsidiaries, affiliates or branches as the main business purpose is that of a finance company for the GRENKE Group. Not applicable. No profit forecast or estimate has been included. Not applicable. The auditor's reports with respect to the financial statements of GRENKE FINANCE PLC as of and for the financial years ended 31 December 2016 and 2015 do not include any qualifications. B.12 Selected historical key financial information The following table shows selected financial information of GRENKE FINANCE PLC extracted from the audited financial statements as of and for the financial year ended 31 December These financial statements have been prepared on the basis of Irish law and accounting standards issued by the Financial Reporting Council and promulgated by the Institute of Chartered Accountants in Ireland (Generally Accepted Accounting Practice in Ireland), including Financial Reporting Standard (FRS) 101 "Reduced Disclosure Framework" GBB is established in the European Community and is registered under the CRA Regulation. The European Securities and Markets Authority publishes on its website ( a list of credit rating agencies registered in accordance with the CRA Regulation. That list is updated within five working days following the adoption of a decision under Article 16, 17 or 20 CRA Regulation. The European Commission shall publish that updated list in the Official Journal of the European Union within 30 days following such update. A credit rating assesses the creditworthiness of an entity and informs therefore about the probability of the entity being able to redeem its financial obligations fully and timely. It is not a recommendation to buy, sell or hold securities and may be revised or withdrawn by the rating agency at any time. "A" means "high financial standing". Ratings from AA to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories. 11

12 Consolidated Statement of Financial Position Data of GRENKE FINANCE PLC 31 Dec Dec (in thousand, rounded) Current assets... 1,197,770 1,072,876 Total Assets... 2,791,719 2,383,622 Total Equity , ,701 Liabilities and Equity of GRENKE FINANCE PLC 31 Dec Dec (in thousand, rounded) Current Liabilities Debt securities in issue , ,078 Bank loans... 78,085 87,013 Amount owed to group undertakings , ,796 Amount owed to franchisees Amount owed to special purpose vehicles ,902 79,403 Derivative financial instruments... 3,500 3,440 Accruals and deferred income... 16,881 17,408 Deferred tax 13 2 Total Current Liabilities , ,158 Non-Current Liabilities Debt securities in issue... 1,156,275 1,058,807 Amount owed to group undertakings , ,367 Amount owed to special purpose vehicles , ,623 Accruals and deferred income... 4,697 2,966 Total Non-Current Liabilities... 1,559,521 1,351,763 Equity Share Capital Capital contribution... 67,000 22,000 Non distributable reserve , ,657 Cash flow hedge reserve (6) Total Equity , ,701 Total Equity and Liabilities... 2,791,719 2,383,622 Statement of Profit or Loss of GRENKE FINANCE PLC 1 Jan to 31 Dec Jan to 31 Dec (in thousand, rounded) Lease income... 79,055 69,900 Interest income and similar income... 37,237 33,855 Interest expense and other charges... (46,467) (51,596) Net interest and lease income 69,825 52,159 12

13 1 Jan to 31 Dec (in thousand, rounded) 1 Jan to 31 Dec Foreign exchange (loss)/gain... (11,595) 4,884 Net gain/(loss) on financial instruments at fair value through profit or loss... 9,339 (6,993) Other income Other operating expenses... (4,361) (3,046) Profit on ordinary activities before tax... 63,991 47,656 Taxation... (8,170) (6,792) Profit for the year... 55,821 40,864 Statement of no material adverse change Significant change in the financial and trading position There has been no material adverse change in the prospects of GRENKE FINANCE PLC since the date of its last published audited financial statements, 31 December Not applicable. There has been no significant change in the financial or trading position of GRENKE FINANCE PLC since 31 December B.13 Recent events Not applicable. There are no recent events particular to GRENKE FINANCE PLC which are to a material extent relevant to the evaluation of its solvency. B.14 Please see Element B.5 Statement of dependency upon other entities within the group GRENKE FINANCE PLC is a fully owned subsidiary of GRENKE AG. B.15 Principal activities The principal activity of GRENKE FINANCE PLC is that of a finance company for the GRENKE Group. B.16 Controlling Persons GRENKE FINANCE PLC is a fully owned subsidiary of GRENKE AG. B.17 Credit ratings of the Issuer or its debt securities B.19 Summary information about the Guarantor Not applicable. GRENKE AG guarantees the payment of interest on and principal of the Notes issued by GRENKE FINANCE PLC. Therefore, creditors base GRENKE FINANCE PLC's credit assessment mainly on GRENKE AG's counterparty credit rating. Please see GRENKE AG - B.17 Please see GRENKE AG - B.1 to B.18; In the case of an issue of Notes by GRENKE FINANCE PLC insert the information under GRENKE AG - B.1 to B.18 into the summary of the individual issue of Notes under this Element B.19 and number the Elements about GRENKE AG as Guarantor as follows: B.19 B.1., etc.] Element Section C Securities C.1 Class and type of the Notes / Security Identification Number Class The Notes are unsecured. [Fixed Rate Notes The Notes bear interest at a fixed rate [throughout the entire term of the Notes] [as adjusted as a result of a rating adjustment from time to time with respect to the long term senior unsecured 13

14 debt of GRENKE AG].] [Floating Rate Notes The Notes will bear interest at a rate determined [(and as adjusted for the applicable margin)] on the basis of a reference rate appearing on the agreed screen page of a commercial quotation service.] ISIN [ ] Common Code [ ] WKN C.2 Currency The Notes are issued in [ ]. [ ] C.5 Restrictions on free transferability C.8 Rights attached to the Notes (including ranking of the Notes and limitations to those rights) Not applicable. The Notes are freely transferable. [Early redemption in the case of fixed rate Notes The Notes can be redeemed prior to their stated maturity [at the option of the] [Issuer,] [and][or] [the holders of the Notes (the "Holders")] for taxation reasons, for reasons of a change of control in respect of GRENKE AG or upon the occurrence of an event of default).] [Early redemption in the case of floating rate Notes The Notes can be redeemed prior to their stated maturity [at the option of the Issuer,] for taxation reasons, for reasons of a change of control in respect of GRENKE AG or upon the occurrence of an event of default).] [Early Redemption at the option of the [Issuer] [and][or] [the Holders] at specified redemption amount(s) The Notes can be redeemed at the option of the [Issuer] [and][or] [the Holders] upon giving notice within the specified notice period to [the Holders] [or] [the Issuer][, as the case may be,] on a date or dates specified prior to such stated maturity and at the specified redemption amount(s) together with accrued interest to, but excluding, the relevant redemption date.] [Early redemption at the option of the Issuer at the principal amount of the respective Note in the case of floating rate Notes The Notes can be redeemed in whole or in part at the option of the Issuer for the first time on [ ] and on each interest payment date thereafter upon giving notice within the specified notice period to the Holders at the principal amount of the respective Note together with accrued interest to, but excluding, the relevant redemption date.] Early redemption for taxation reasons Early Redemption of the Notes for reasons of taxation will be 14

15 permitted, if as a result of any change in, or amendment to the laws or regulations (including any amendment to, or change in, an official interpretation or application of such laws or regulations), of [in the case of Notes issued by GRENKE AG the Federal Republic of Germany] [and in case of Notes issued by GRENKE FINANCE PLC the Republic of Ireland or the Federal Republic of Germany] or any political subdivision or taxing authority thereto or therein affecting taxation or the obligation to pay duties of any kind, the Issuer [or, in case of Notes issued by GRENKE FINANCE PLC, the Guarantor,] will become obligated to pay additional amounts on the Notes. Early redemption for reasons of a change of control in respect of GRENKE AG Under certain conditions, the Notes provide for the option of the Holders to demand redemption of Notes at their principal amount together with accrued interest to, but excluding, the relevant redemption date in the event of a change of control in respect of GRENKE AG and the occurrence of a rating downgrade in respect of that change of control within the change of control period. Early redemption in an event of default (including the cross default) The Notes provide for events of default (including the cross default) entitling Holders to demand immediate redemption of Notes at their principal amount together with accrued interest to, but excluding, the relevant redemption date. Resolutions of Holders In accordance with the German Act on Debt Securities of 2009 (Schuldverschreibungsgesetz "SchVG") the Notes contain provisions pursuant to which Holders may agree by resolution to amend the Terms and Conditions (with the consent of the Issuer) and to decide upon certain other matters regarding the Notes. Resolutions of Holders properly adopted, either in a meeting of Holders or by vote taken without a meeting in accordance with the Terms and Conditions, are binding upon all Holders. Resolutions providing for material amendments to the Terms and Conditions require a majority of not less than 75% of the votes cast. Resolutions regarding other amendments are passed by a simple majority of the votes cast. Status of the Notes The obligations under the Notes constitute unsecured and unsubordinated obligations of the Issuer ranking pari passu among themselves and pari passu with all other unsecured and unsubordinated obligations of the Issuer except for any obligations preferred by law. Negative pledge The Terms and Conditions of the Notes contain a negative pledge provision of the Issuer. C.9 Please see Element C.8. Interest rate [[ ]% per annum in the case of fixed rate Notes [as adjusted as a result of a rating adjustment from time to time with respect to the long term senior unsecured debt of GRENKE AG, as set out below].] 15

16 [- initial rate of interest in the case of a rating of [ ] - decrease of rating to [ ] increase of initial rate of interest by [ ]% per annum to [ ]% per annum - decrease of rating to or below [ ] increase of initial rate of interest by [ ]% per annum to [ ]% per annum - following a decrease an increase of rating to [ ] decrease of rate of interest to [ ]% per annum or [ ]% per annum, as the case may be.] [In the case of floating rate Notes [EURIBOR][LIBOR for the specified currency] [[plus][minus] the [applicable] margin [of [ ]% per annum for each interest period]].[the applicable margin for the relevant interest period is as set out below.] [The minimum interest rate is [ ]% per annum.] [The maximum interest rate is [ ]% per annum.]] [interest period: [ ] applicable margin (in % per annum): [ ]] Interest commencement date Interest payment dates Underlying on which interest rate is based [The issue date of the Notes.] [ ] [Not applicable in the case of fixed rate Notes. The interest rate is not based on an underlying.] [EURIBOR][LIBOR for the specified currency] Maturity date including repayment procedures Indication of yield [[ ] in the case of fixed rate Notes.] [In the case of floating rate Notes the interest payment date falling in [the redemption month].] Payment of principal in respect of Notes shall be made to the Clearing System or to its order for credit to the accounts of the relevant account holders of the Clearing System. [[ ]% per annum] [Not applicable in the case of floating rate Notes. No yield is calculated.] Name of representative of the Holders [Not applicable. In accordance with the SchVG the Notes provide that the Holders may by majority resolution appoint a representative for all Holders (the "Holders' Representative"). The responsibilities and functions assigned to the Holders' Representative appointed by a resolution are determined by the SchVG and by majority resolutions of the Holders.] [[ ] has been designated in the Terms and Conditions of the Notes as representative for all Holders (the "Holders' Representative"). The duties, rights and functions of the Holders' Representative are determined by the relevant provisions of the Terms and Conditions.] C.10 Please see Element C.9. Explanation how the value of the investment is affected in the case the Notes have a derivative component in Not applicable. The interest payment has no derivative component. 16

17 the interest payment C.11 Admission to trading on a regulated market or equivalent market Regulated market of the Luxembourg Stock Exchange. Element Section D - Risks Risks specific to GRENKE AG as [Issuer] [Guarantor] D.2 Key information on the key risks that are specific to the Issuer Market Environment and Competition The markets for lease assets in the IT-sector are subject to price and business competition. In addition, the current macroeconomic events may lead to reduced levels of investment in IT and therefore reduced new leasing business. Additionally, rising insolvencies may lead to less demand to new leasing business. The already experienced decline in prices for ITproducts can impact GRENKE AG's earnings. No assurance can be given that other competitors in the leasing sector will not seek access to this market segment and thus not impact the earnings situation of GRENKE AG. Investments Investments made through GRENKE AG or GRENKE AG's subsidiaries may lead to investment risks under counterparty default risk when quantifying risk-bearing capacity. Credit Risks of the Lessees These risks are borne by GRENKE AG. Creditworthiness of GRENKE AG's lessees is checked by using a self-developed scoring system. The approval process incorporates the current risk strategy, portfolio characteristics and risk-return considerations and all leases are monitored on an ongoing basis. The levels of loss currently stand at 1.2% loss p. a. as compared to acquisition values of new business volume. No assurance can be given that the deployment of the scoringmodel and the assessment of the creditworthiness continue to be as successful as in the past. This is particularly the case should the current macroeconomic environment deteriorate even more than the previous recessions. Concentration risk GRENKE AG's leasing business is concentrated mainly in Germany, France, Italy and the United Kingdom. The related risks are manageable given the good to very good Standard & Poor's ratings for Germany (AAA), the United Kingdom (AA) and France (AA) and the average rating for Italy (BBB-). Currently, there is no reason to believe that the expected loss rates in the four largest countries would be more volatile than in the past. Rising losses Rising losses have a material influence on GRENKE AG's earnings development, particularly during recessionary periods. Traditionally, losses have shown a certain degree of volatility over the course of the year as well as a time lag of about two years in comparison to the underlying transaction. Assuming and managing these types of risks is a core aspect of GRENKE AG's business model. The management of the GRENKE Group is aimed at assessing the risks as precisely as possible at the time of concluding the contract so that a sufficient premium can be set in the conditions offered for assuming these risks. 17

18 Dependence on Executive Officers Having introduced a Management Team responsible for day-today operations, the loss of one individual member of the GRENKE AG's Management Team could have a negative impact on its future development. Functionality of IT Systems and Data Security For the administration of leasing contracts GRENKE AG deploys an extensive IT-system with proprietary software technology as well as standardised software products with respect to all other procedures (e.g. accounting, treasury, billing etc.). GRENKE AG depends on its IT-system being available at any time. Development of Foreign Markets The GRENKE Group is active in 30 countries and plans to further extend these activities. So far the transfer and adjustment procedures of the scoring system to every single country have proved to be very successful. There can be no assurance that the internally developed scoring procedure, which is well proven in the German market, will to the same extent warrant the exclusion of credit risks for foreign lessees. In addition, foreign markets may create political risks or economic risks especially if leases were concluded in currencies other than euros. Tax Risks In November 2010, the responsible German tax authorities began a tax audit of GRENKE AG for the years from 2005 to 2009, which has been completed in fiscal year A revised tax assessment notice has been issued and GRENKE AG paid the outstanding amount accordingly in Meanwhile GRENKE AG lodged an appeal against that tax assessment notice. GRENKE AG believes that the tax authority or the tax court will partially annul the revised tax assessment notice. Thus an tax asset in the amount of the expected value for a probable tax refund for the fiscal years 2005 to 2009 was recognized. There is the risk that the appeal will be declined or the tax refund will be less than the recognized tax asset. In October 2015 the tax authorities announced a tax audit to GRENKE AG (and several subsidiaries of GRENKE AG) for the fiscal years 2010 to The tax audit commenced in November The incurrence of additional tax expenses for those periods cannot be ruled out. Based on the results of the tax audit for the years GRENKE AG recorded additional tax and interest liabilities for fiscal years from 2010 onwards since GRENKE AG concluded that it is probable that the tax authorities will not fully accept the appeal against the tax assessment notice for the years from Therefore there is the risk of higher tax expenses for the years from 2010 onwards. There is also the risk of miscalculation of taxes and levies. Earnings and Financial Performance Clients reducing their investments in IT-products may affect GRENKE AG's earnings and financial situation. Fluctuations in market prices on the financial markets can have a significant effect on cash flow and net profit. Changes in interest rates and in certain currencies affect the GRENKE Group. Loss of Financing Facilities GRENKE AG refinances its purchase of lease assets mainly through five asset-backed security agreements, a listed and rated Debt Issuance Programme, two money market lines, eight short-term revolving credit facilities and a rated Commercial 18

19 Paper Programme. The lease assets will additionally be refinanced through the sale of leasing receivables to GRENKE BANK AG and other external banks. There can be no assurance that GRENKE AG will not lose a refinancing facility possibly resulting in temporary deterioration of its earnings and liquidity position. The current capital markets and sovereign debt crisis may make it more difficult than before to replace existing with new facilities. Moreover, terms or conditions of both existing and new facilities may adversely change due to the crisis. Any development that could have a negative impact on GRENKE AG's current counterparty credit rating of BBB+ (stable outlook) by Standard & Poor's or GRENKE AG's current counterparty credit rating of A (stable outlook)by GBB could lead to higher refinancing costs or the loss of funding sources. Refinancing Risks During fiscal year 2016 a visible volatility of the interest rate spreads was observed on international financial markets as a result of the ongoing capital markets and sovereign debt crisis and other political or economical crises. Especially bonds with medium to long-term durations are still subject to high risk. Moreover, strong competition in the deposit-taking business sector may adversely affect the currently favourable refinancing through GRENKE BANK AG. Risks may also result from communicating with analysts and shareholders. There is also currently increased interest rate risk from the U.S. Federal Reserve s announcement that it will continue to rise short-term interest in the U.S. in the course of Despite only small improvement in the economic environment, an impact on interest rates in Europe cannot be ruled out. A cyclical rise in government bond yields, particularly high-grade bonds, may increase their attractiveness and cause spreads to widen on the capital markets resulting in a corresponding potential temporary bottleneck in liquidity and a change in the general refinancing situation. Fluctuations in Exchange and Interest Rates GRENKE AG believes that the established risk management system together with the utilisation of hedging transactions is an effective procedure to protect GRENKE AG against important impacts on the financial and earnings situation. However, there can be no assurance that fluctuations in exchange or interest rates, in particular due to more restrictive monetary policies, will not have a negative impact on the financial and earnings situation. The risk of a rise in interest rates in Europe is considered as high in view of the change in U.S. interest rate policy and the announcement by the U.S. Federal Reserve of further increases in short-term interest rates in 2017 and in light of the strong indication of an expansionary economic policy from the new U.S. administration. There is also currently increased interest rate risk from the U.S. Federal Reserve's announcement that it will continue to rise short-term interest in the U.S. in the course of Despite only small improvement in the economic environment, an impact on interest rates in Europe cannot be ruled out. A cyclical rise in government bond yields, particularly high-grade bonds, may increase their attractiveness and cause spreads to widen on the capital markets resulting in a corresponding potential temporary bottleneck in liquidity and a change in the general refinancing situation. Risks from the Capital Markets and Sovereign Debt Crisis Currently there are considerable risks for business development due to the ongoing capital markets and sovereign debt crisis and other political or economical crises. Political and geopolitical 19