Bertelsmann Bonds / Credit Rating

Bertelsmann uses various financial instruments to diversify its financing sources. In this context the capital market plays an important part in Bertelsmann's financial strategy.

Financing instruments

In the last years Bertelsmann has successfully established at the international capital markets. With larger capital market transactions Bertelsmann attracted new groups of investors (amongst others US Private Placement) and emitted various issues with benchmark status. Currently listed bonds with a total volume of EUR 3.5 billion are outstanding. Bertelsmann is one of the largest issuer of EUR-bonds in the media-segment.

Bertlsmann has access to bot variable and fixed-rate financing through various lines of credit. A syndicated line of credit has been  in place since October 2004, which was last extended in 2005 and expires in 2012. Bertelsmann AG and its foreign financing company Bertelsmann U.S. Finance LLC can utilize these to draw down up to EUR1.2 billion of revolving funds in euros, U.S. dollars and pounds sterling. There are also bilateral credit agreements with major international banks. These lines of credit ensure Bertelsmann a total financial reserve of approximately EUR1.5 billion that can be used for general business purposes. As of December 31, 2009, Bertelsmann had not utilized the existing lines of credit as in the previous year.

Financial strategy

The primary objective of Bertelsmann`s financial policy is to achieve a balance between financial security, return on equity and growth. Accordingly, the Group`s financing policy is based on the requirements of a "BBB+/Baa1" credit rating and the qualitative/ quantitative criteria pertaining thereto. Credit ratings and transparency are of great importance to Bertelsmann`s financial security and independence.

The Bertelsmann Group is centrally financed by Bertelsmann AG and its financing company Bertelsmann U.S. Finance LLC. Bertelsmann AG provides the Group companies with liquidity and manages the issuance of guarantees and letters of comfort for
Group companies. The Group widely forms a single financial unit, thereby optimizing capital procurementand investmentopportunities.

Since 2002, Bertelsmann has had credit ratings from the agencies Standard & Poor’s and Moody’s in the Investment Grade area. Thanks to its good credit rating, Bertelsmann can finance itself on the financial market on reasonable terms.