Bond Grencke 2% ( XS2017346227 ) in JPY

Grencke

100 % ⇌

Ireland

XS2017346227 ( in JPY )

2% per year ( payment 1 time a year)

02/07/2029 - Bond has expired

Prospectus brochure of the bond Grenke XS2017346227 in JPY 2%, expired

Grenke provides leasing and financing solutions for IT equipment, primarily to small and medium-sized enterprises (SMEs).

The Bond issued by Grencke ( Ireland ) , in JPY, with the ISIN code XS2017346227, pays a coupon of 2% per year.
The coupons are paid 1 time per year and the Bond maturity is 02/07/2029

Debt Issuance Programme Prospectus
dated 17 February 2020

This document constitutes two base prospectuses: (i) the base prospectus of GRENKE AG in respect of non-equity
securities within the meaning of Article 2(c) of the Prospectus Regulation ("Non-Equity Securities") and (i ) 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
5,000,000,000
Debt Issuance Programme
(the "Programme")

This Prospectus has been approved by the Luxembourg Commission de Surveil ance du Secteur Financier of the Grand
Duchy of Luxembourg (the "CSSF") as competent authority under Regulation (EU) 2017/1129 of the European Parliament
and of the Council of 14 June 2017 (the "Prospectus Regulation"). The CSSF only approves this Prospectus as meeting
the standards of completeness, comprehensibility and consistency imposed by the Prospectus Regulation. Such approval
should not be considered as an endorsement of the issuer or of the quality of the Notes that are the subject of this
Prospectus. Investors should make their own assessment as to the suitability of investing in the Notes.

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 Markets in
Financial Instruments Directive 2014/65/EU) (the "Regulated Market") or on the professional segment of the Regulated
Market of the Luxembourg Stock Exchange. Notes issued under the Programme may also not be listed at al . The payments
of al amounts due in respect of Notes issued by GRENKE FINANCE PLC wil be unconditional y and irrevocably guaranteed
by GRENKE AG.

Each Issuer has requested the CSSF in its capacity as competent authority under the Prospectus Regulation and the
Luxembourg act relating to prospectuses for securities dated 16 July 2019 (Loi du 16 juil et 2019 relative aux prospectus
pour valeurs mobilières et portant mise en oeuvre du règlement (UE) 2017/1129, the "Luxembourg Law") 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 Prospectus Regulation (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 shal give no undertaking as to the economic and financial
soundness of the operation or the quality or solvency of the issuer pursuant to Article 6(4) Luxembourg Law.

Arranger
Deutsche Bank
Dealers
Deutsche Bank
HSBC

This Prospectus wil be published in electronic form on the website of the Luxembourg Stock Exchange (www.bourse.lu) and
on the website of GRENKE AG (http://www.grenke.de/en/investor-relations.html). This Prospectus succeeds the Debt
Issuance Programme Prospectus dated 15 February 2019 and is valid for a period of 12 months after its approval. The
validity ends upon expiration of 16 February 2021. There is no obligation to supplement the Prospectus in the event
of significant new factors, material mistakes or material inaccuracies when the Prospectus is no longer valid.

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 wil
be contained in the Final Terms (as defined below).
Each Issuer hereby declares that to the best of its knowledge the information contained in this Prospectus for
which it is responsible is in accordance with the facts and that this Prospectus makes 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
material 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 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,
2

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 Final Terms in respect of any Notes may include a legend entitled "MiFID II Product Governance" which
will outline the target market assessment in respect of the Notes and which channels for distribution of the
Notes are appropriate. Any person subsequently offering, selling or recommending the Notes (a "distributor")
should take into consideration the target market assessment; however, a distributor subject to Directive
2014/65/EU (as amended, "MiFID II") is responsible for undertaking its own target market assessment in
respect of the Notes (by either adopting or refining the target market assessment) and determining appropriate
distribution channels.
A determination will be made in relation to each issue about whether, for the purpose of the MiFID Product
Governance rules under EU Delegated Directive 2017/593 (the "MiFID Product Governance Rules"), any
Dealer subscribing for any Notes is a manufacturer in respect of such Notes, but otherwise neither the Arranger
nor the Dealers nor any of their respective affiliates wil be a manufacturer for the purpose of the MiFID Product
Governance Rules.
If the Final Terms in respect of any Notes include a legend entitled "PROHIBITION OF SALES TO EEA AND
UK RETAIL INVESTORS", the Notes are not intended to be offered, sold or otherwise made available to and
should not be offered, sold or otherwise made available to any retail investor in the European Economic Area
("EEA") or in the United Kingdom (the "UK"). For these purposes, a retail investor means a person who is one
(or more) of: (i) a retail client as defined in point (11) of Article 4(1) of MiFID II; or (ii) a customer within the
meaning of Directive 2016/97/EU, where that customer would not qualify as a professional client as defined in
point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in the Prospectus Regulation.
Consequently no key information document required by Regulation (EU) No 1286/2014 (as amended, the
"PRIIPs Regulation") for offering or selling the Notes or otherwise making them available to retail investors in
the EEA or in the UK has been prepared and therefore offering or selling the Notes or otherwise making them
available to any retail investor in the EEA or in the UK may be unlawful under the PRIIPs Regulation.
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 non-binding 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, stabilisation may
not necessarily occur. 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 cease 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.
The information on any website included in the Prospectus, except for the websites listed in "Documents
incorporated by Reference" below, do not form part of the Prospectus and has not been scrutinised or
approved by the CSSF.
Amounts payable under Floating Rate Notes are calculated by reference to (i) EURIBOR (Euro Interbank
Offered Rate) which is provided by the European Money Markets Institute (EMMI) or (ii) LIBOR (London
Interbank Offered Rate) which is provided by the ICE Benchmark Administration Limited (IBA). As at the date
3

of this Prospectus, each of EMMI and IBA appear on the register of administrators and benchmarks
established and maintained by the European Securities and Markets Authority (ESMA) pursuant to Article 36 of
the Benchmarks Regulation (Regulation (EU) 2016/1011) ("BMR").
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 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

TABLE OF CONTENTS
General Description of the Programme ............................................................................................................. 7
Risk Factors ......................................................................................................................................................... 8
Risk Factors regarding GRENKE AG as Issuer and Guarantor .................................................................... 8
Risk Factors regarding GRENKE FINANCE PLC ....................................................................................... 12
Risk Factors regarding the Notes ................................................................................................................ 13
Consent to the Use of the Prospectus ............................................................................................................ 20
GRENKE AG as Issuer and Guarantor ............................................................................................................ 21
Selected Financial Information .................................................................................................................... 21
General, History and Development of GRENKE AG ................................................................................... 22
Investments ................................................................................................................................................. 22
Known Trends ............................................................................................................................................. 22
Business Overview and Principal Markets .................................................................................................. 22
Organisational Structure .............................................................................................................................. 23
Acquisitions ................................................................................................................................................. 25
Financing of the Issuer's activities ............................................................................................................... 25
Material adverse change in the prospects of the Issuer .............................................................................. 26
Administrative, Management and Supervisory Bodies ................................................................................ 26
Conflict of Interests ...................................................................................................................................... 27
Controlling Persons ..................................................................................................................................... 27
Historical Financial Information ................................................................................................................... 27
Auditors ....................................................................................................................................................... 27
Legal, Arbitration and Other Proceedings ................................................................................................... 27
Significant Change in GRENKE AG's Financial Position............................................................................. 28
Share Capital ............................................................................................................................................... 28
Articles of Association ................................................................................................................................. 28
Rating .......................................................................................................................................................... 28
GRENKE FINANCE PLC as Issuer ................................................................................................................... 29
Selected Financial Information .................................................................................................................... 29
General, History and Development of GRENKE FINANCE PLC ................................................................ 30
Investments ................................................................................................................................................. 30
Business Overview ...................................................................................................................................... 30
Organisational Structure .............................................................................................................................. 30
Material adverse change in the prospects of the Issuer .............................................................................. 30
Administrative, Management and Supervisory Bodies ................................................................................ 30
Conflict of Interests ...................................................................................................................................... 30
Controlling Persons ..................................................................................................................................... 31
Historical Financial Information ................................................................................................................... 31
Auditors ....................................................................................................................................................... 31
Legal and Arbitration Proceedings .............................................................................................................. 31
Significant Change of GRENKE FINANCE PLC's Financial Position .......................................................... 31
Share Capital ............................................................................................................................................... 31
Memorandum of Association ....................................................................................................................... 31
Rating .......................................................................................................................................................... 31
Issue Procedures ............................................................................................................................................... 32
Terms and Conditions of the Notes ................................................................................................................. 34
Option I Terms and Conditions that apply to Notes with Fixed Interest Rates ......................................... 34
Option II Terms and Conditions that apply to Notes with Floating Interest Rates .................................... 53
Terms and Conditions of the Notes German Language Version ............................................................... 74
Option I Anleihebedingungen für Schuldverschreibungen mit fester Verzinsung ..................................... 74
5

Option II Anleihebedingungen für Schuldverschreibungen mit variabler Verzinsung ............................... 96
Form of Guarantee and Negative Pledge ...................................................................................................... 119
German Language Version Garantie und Negativverpflichtung ............................................................. 119
English Language Version Guarantee and Negative Pledge ................................................................. 123
Form of Final Terms ........................................................................................................................................ 127
Description of Rules Regarding Resolution of Holders .............................................................................. 143
Taxation Warning ............................................................................................................................................ 145
General Information ........................................................................................................................................ 146
Selling Restrictions .................................................................................................................................... 146
Use of Proceeds ........................................................................................................................................ 149
Listing and Trading Information ................................................................................................................. 149
Interests of Natural and Legal Persons involved in the Issue/Offer ........................................................... 149
Authorisation .............................................................................................................................................. 149
Documents Available ...................................................................................................................................... 151
Documents Incorporated by Reference ........................................................................................................ 152
Cross Reference List of Documents Incorporated by Reference .............................................................. 152
Availability of Documents .......................................................................................................................... 154
Names and Addresses .................................................................................................................................... 155

6

GENERAL DESCRIPTION OF THE PROGRAMME
Under the Programme GRENKE AG and GRENKE FINANCE PLC may from time to time issue Notes to one or
more of the Dealers. The maximum aggregate principal amount of all Notes at any time outstanding under the
Programme wil not exceed 5,000,000,000 (or its equivalent in any other currency). The Issuers may increase
the amount of the Programme in accordance with the terms of the Dealer Agreement (as defined herein) from
time to time.
Notes issued by GRENKE FINANCE PLC will have the benefit of a Guarantee (the "Guarantee") given by
GRENKE AG. The Guarantee constitutes an unconditional, unsecured and unsubordinated obligation of
GRENKE AG and ranks pari passu with all other unsecured and unsubordinated obligations of GRENKE AG.
The Notes may be issued on a continuing basis to one or more of the Dealers and any additional Dealer
appointed under the Programme from time to time by the Issuer(s), which appointment may be for a specific
issue or on an ongoing basis. Notes may be distributed by way of offers to the public or private placements
and, in each case, on a syndicated or non-syndicated basis. The method of distribution of each tranche of
Notes (the "Tranche") will be stated in the applicable final terms (the "Final Terms"). The Notes may be
offered to qualified and non-qualified investors, unless the applicable Final Terms include a legend entitled
"PROHIBITION OF SALES TO EEA RETAIL INVESTORS".
Notes will be issued in Tranches, each Tranche in itself consisting of Notes which are identical in all respects.
One or more Tranches, which are expressed to be consolidated and forming a single series and identical in all
respects, but having different issue dates, interest commencement dates, issue prices and dates for first
interest payments may form a series ("Series") of Notes. Further Notes may be issued as part of an existing
Series.
Notes wil be issued in such denominations as may be agreed between the relevant Issuer and the relevant
Dealer(s) and as indicated in the applicable Final Terms save that the minimum denomination of the Notes wil
be, if in euro, 1,000, or, if in any currency other than euro, in an amount in such other currency equivalent to
at least 1,000 at the time of the issue of Notes. Subject to any applicable legal or regulatory restrictions, and
requirements of relevant central banks, Notes may be issued in euro or any other currency. Notes will be
issued with a maturity of twelve months or more. The Notes will be freely transferable.
Notes may be issued at an issue price which is at par or at a discount to, or premium over, par, as stated in the
applicable Final Terms. The issue price for Notes to be issued will be determined at the time of pricing on the
basis of a yield which will be determined on the basis of the orders of the investors which are received by the
Dealers during the offer period. Orders will specify a minimum yield and may only be confirmed at or above
such yield. The resulting yield will be used to determine an issue price, all to correspond to the yield.
The yield for Notes with fixed interest rates will be calculated by the use of the ICMA method, which determines
the effective interest rate of notes taking into account accrued interest on a daily basis.
The Risk Factors included in this Prospectus are limited to risks which are (i) specific to GRENKE AG and
GRENKE FINANCE PLC as Issuers and Guarantor, as the case may be, as well as the Notes, and (ii) are
material for taking an informed investment decision. They are presented in a limited number of categories
depending on their nature. In each category the most material risk factor is mentioned first.
Under this Prospectus a summary will only be drawn up in relation to an issue of Notes. Such an issue-specific
summary will be annexed to the applicable Final Terms.
Application has been made to list Notes on the official list of the Luxembourg Stock Exchange and to trade
Notes on the Regulated Market "Bourse de Luxembourg" or on the professional segment of the Regulated
Market. Notes may further be issued under the Programme which will not be listed on any stock exchange.
Deutsche Bank Luxembourg S.A. will act as Luxembourg Listing Agent and Deutsche Bank Aktiengesellschaft
will act as fiscal agent and paying agent (the "Fiscal Agent").
Notes will be accepted for clearing through one or more Clearing Systems as specified in the applicable Final
Terms. These systems will comprise those operated by Clearstream Banking AG, Frankfurt am Main,
Clearstream Banking S.A., Luxembourg and Euroclear Bank SA/NV. Notes denominated in euro or, as the
case may be, such other currency recognised from time to time for the purposes of eligible collateral for
Eurosystem monetary policy and intra-day credit operations by the Eurosystem, are intended to be held in a
manner, which would allow Eurosystem eligibility. Therefore, these Notes will initially be deposited upon issue
with in the case of (i) a new global note either Clearstream Banking S.A., Luxembourg or Euroclear Bank
SA/NV as common safekeeper or, (ii) a classical global note Clearstream Banking AG, Frankfurt am Main. It
does not necessarily mean that the Notes will be recognised as eligible collateral for Eurosystem monetary
policy and intra-day credit operations by the Eurosystem either upon issue or at any or all times during their life.
Such recognition will depend upon satisfaction of the Eurosystem eligibility criteria.
7

RISK FACTORS
The following is a description of material risks that are specific to GRENKE AG and GRENKE FINANCE
PLC and/or may affect their respective ability to fulfill their respective obligations under the Notes and
the Guarantee and that are material to the Notes issued under the Programme in order to assess the
market risk associated with these Notes. Prospective investors should consider these risk factors
before deciding whether to purchase the Notes.
Prospective investors should consider all of the information provided in this Prospectus or
incorporated by reference into this Prospectus and consult with their own professional advisers
(including their financial, accounting, legal and tax advisers) if they consider it necessary. In addition,
investors should be aware that the risks described might combine and thus intensify one another.
RISK FACTORS REGARDING GRENKE AG AS ISSUER AND GUARANTOR
GRENKE AG's business, financial condition or results of operations could suffer adverse material effects due to
any of the following risks. This could have an adverse effect on the market price of the Notes, and the Issuer
may ultimately not be able to meet its obligations under the Notes. However, they are not the only risks which
GRENKE AG faces. Additional risks, which are to date unknown to GRENKE AG or which it does not consider
material, might also impair GRENKE AG's business operations.
The risk factors regarding GRENKE AG and GRENKE Group are presented in the following categories
depending on their nature with the most material risk factor mentioned first in each category:
1.
Risks related to the Issuer's and Guarantor's business activities and industry
2.
Risks related to the Issuer's and Guarantor's financial situation
3.
Legal and regulatory risks
1.
Risks related to the Issuer's and Guarantor's business activities and industry
Lessees credit risks
There is a risk for the Issuer that the liquidity or general creditworthiness of their lessees deteriorate which
could lead to a complete or partial failure of the lessees to meet their payment obligations during the term of
the contract, subsequently resulting in payment defaults. Such a risk generally increases with a worsening
economic climate, as it can trigger more payment defaults of leasing customers. Since 1994 GRENKE has
assessed the creditworthiness of their lessees using a self-developed scoring system which is based on a
scientific statistical approach. The approval process incorporates the current risk strategy, portfolio
characteristics and risk-return considerations. GRENKE believes that the quality of this system has been
proven by the low levels of loss experienced since its implementation, especially the low level of deviations
between expected losses and real losses.
However, no assurance can be given that the deployment of the scoring model 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. The loss rate in the current
market situation may exceed that of previous economic cycles. GRENKE constantly strives to keep the
lessee's data up to date and therefore uses its own experience and current information from credit agencies.
Furthermore, GRENKE is active in 32 countries and plans to further extend these activities. There can be no
assurance that the internally developed scoring procedure, which is well proven in the German market, will
warrant the exclusion of credit risks for foreign lessees to the same extent.
Concentration risks
GRENKE has entered into an intensive network of cooperation agreements with manufacturers and dealers
across Europe granting access to clients at the point of sale. The most important partners are Brother, Kärcher,
Kyocera, Netapp, Ricoh and Sharp. There can be no assurance that one or several of these cooperations will
not be terminated, thereby reducing the earnings and growth opportunities of GRENKE. Moreover, GRENKE's
core leasing business activities are mainly in Germany, France, Italy and the United Kingdom. The related risks
are manageable given the good to very good S&P (as defined below) 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. However, if
that occurred, it could have a negative impact on the Issuer's financial situation.
8

Market growth risks
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. Despite the initial agreement in the trade dispute between the United States
and China, there is still a possibility that the global economy could lose some momentum this year.
Furthermore, the current orderly withdrawal of the United Kingdom from European Union could have a negative
impact on the business in the United Kingdom, the banking crisis and budget dispute in Italy could be
detrimental to the business in Italy, and a potential reversal of important reform steps in France due to growing
public pressure on the government might also adversely affect the business in France. Moreover, it is also
possible that the sovereign debt crisis could intensify again. On the other hand, the past showed that GRENKE
is in a good position whenever the macroeconomic cycle is on a downturn due to reduced supply from
competitors for small and medium-size enterprises (SME).
Additionally, rising insolvencies may lead to less demand to new leasing business. Furthermore, it cannot be
excluded that in the future PCs and other equipment may be provided free of charge or with significant
subsidies in return for a service arrangement through which the service provider sells its core products and
refinances the cost of the equipment. In GRENKEs opinion business clients on whom it focuses wil not accept
these offers due to the related disadvantages (e.g. advertising and reduced flexibility). Additionally, the already
experienced decline in prices for IT-products can impact GRENKE's earnings. Finally GRENKE due to its
intensive market screening will be in a position to anticipate these developments and adjust its business to the
demand for other products in this sector and any other sectors. 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.
Segment risks
Next to leasing, GRENKE's business segments are Banking via GRENKE BANK AG and Factoring via different
subsidiaries and Franchises. The main financial risks at GRENKE BANK AG are its credit risks as well as
concentration risks. Concentration risk is taken into account by risk provisioning which is validated by intra-year
reporting of anomalies in the lending business. GRENKE BANK AG offers micro-credits (Mikrokredite) to small
businesses which are not getting financial support from their relationship bank. Although micro-credits are
secured at 100% by Mikrokreditfonds Deutschland, GRENKE BANK AG is exposed to the credit risk of the
Mikrokreditfonds Deutschland. Furthermore, a credit risk arises from lending to small and medium-sized
enterprises. There is an additional risk of losing GRENKE BANK AG's deposit business if GRENKE BANK AG
will not be able to fulfill the requirements of the Deposit Protection Fund of the Association of German Banks
(Einlagensicherungsfonds des Bundesverbands deutscher Banken).
Owing to risk considerations, GRENKE essentially offers small-ticket factoring via its Factoring subsidiaries and
Franchises as "notification factoring". As opposed to non-notification factoring, this also means additional
security as debtors wil only be discharged in respect to their payment obligations if they pay directly to
GRENKE. In the event of non-notification factoring, payment-discharging obligations can usually only be paid
to a bank account pledged to GRENKE. In both cases GRENKE assumes the default risk for the purchased
receivables.
Franchise risks
GRENKE successfully started a so-called Franchise Partner System with German and foreign partners for
leasing. GRENKE aims to access targeted markets by utilising franchisees that have local-market knowledge
and personal commitment, assume start-up costs and risks. GRENKE as Franchiser provides the complete
know-how for fast and efficient processing (e.g. the IT and scoring-system, controlling, refinancing, marketing
support) but does not have any stake. Franchisees exit is possible within four to six years following the set-up
via a call-option priced on a peer-groups-PE ratio (GRENKE is option holder, no put-option for the franchisees).
Although GRENKE has long-standing experience in the management of subsidiaries, there is no assurance as
regards the possible development of these Franchise Partners. No assurance can be given that a disruption of
the system-availability would not influence GRENKE's ability to administrate all leasing contracts in a timely
manner, and thus expose GRENKE to compensation claims from the franchisees.
IT and data security risks
Administration of leasing contracts depends, to a large extent, on IT systems, data storage and data security
procedures. Therefore, GRENKE deploys an extensive IT system with proprietary software technology with
respect to the leasing business as well as standardised software products with respect to all other procedures
(e.g. accounting, treasury, billing etc.). GRENKE depends on its equipment being available at any time. Any

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disruption could have a material impact on its operations and client relations and thus on its financial position.
In order to secure safe processing and storage, GRENKE's software development, data storage and
processing procedures are audited by the TÜV SÜD Management Service GmbH (DIN EN ISO 9001: 2015). In
order to secure safe storage at any time, data are stored on a daily basis at the Baden-Baden head office as
well as by way of a backup copy outside the head office.
Risks related to operational procedures and personnel
GRENKE has always been able to adjust its operational procedures and personnel structures to increased
demand in connection with its growth. To cope with the growth of its pan-European and global activities,
continuous adjustments will have to be made in the future with respect to the planned further expansion via
foreign subsidiaries and Franchise Partners. The existing management and organisational structure is
designed to adjust existing structures or to create new structures in a timely manner and to cope with the
growth of GRENKE. So far GRENKE's success has, to a certain extent, been based on the members of the
Management Board. Although GRENKE has 22 Vice Presidents responsible for day-to-day operations and
operational implementation of the decisions taken by the Management Board, the loss of one board member of
GRENKE could have a negative impact on its future development.
No assurance can be given that GRENKE continues to be successful in adjusting the existing structures or in
creating structures required in a timely manner. Furthermore, no assurance can be given that any investment in
or acquisition of other businesses or companies will be successful.
2.
Risks related to the Issuer's and Guarantor's financial situation
Loss risks
Rising losses have a material influence on GRENKE'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's business model. The management of the GRENKE 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. If this is not successful, it could have a negative
impact on the Issuer's results of operation.
Refinancing risks
During the fiscal year 2019, a visible volatility of the interest rate spreads has been observed on international
financial markets as a result of the European 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. The U.S. Federal Reserve's interest rate policy may also have an effect on interest rates in
Europe. The current negative interest rate environment and decisions made by the European Central Bank
("ECB") may lead to strong changes in the general refinancing situation.
Exchange and interest rates risks
In relation with the activities in non-euro countries and the general refinancing activities where the tenor of the
financing does not exactly correspond with the tenor of the leasing contracts, GRENKE is exposed to exchange
rate and interest rate risks, in particular due to more restrictive monetary policies. GRENKE believes that the
established risk management system together with the utilisation of hedging transactions is an effective
procedure to protect GRENKE against important impacts on the financial and earnings situation. However,
there can be no assurance that fluctuations in exchange or interest rates will not have a negative impact on the
financial and earnings situation. The U.S. Federal Reserve's interest rate policy may also have an effect on
interest rates in Europe. The current negative interest rate environment and decisions made by the European
Central Bank (ECB) may lead to strong changes in the general refinancing situation.
Liquidity and credit risks
GRENKE refinances its purchase of lease assets mainly through asset-backed security agreements, the Debt
Issuance Programme, several short-term revolving credit facilities, a rated Commercial Paper Programme and
the sale of lease receivables. Further, there are various collaborations in the form of global loans. As GRENKE
AG has given unconditional and irrevocable guarantees for the majority of the above liabilities, to its
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