Voluntary conversion of Campina bonds into FrieslandCampina free member bonds

24 April 2009

Campina member dairy farmers and former Campina member dairy farmers who have closed their business can convert their subordinated Campina bonds into FrieslandCampina free member bonds. This voluntary conversion is prompted by the merger of Friesland Foods and Campina into FrieslandCampina at the end of December 2008.

The Campina bonds are subordinated bonds issued by the former Zuivelcoöperatie Campina U.A. in three separate tranches with a different maturity date for each tranche. The bond loans total approximately EUR 177 million.

Interests of members and healthy financial base
FrieslandCampina free member bonds are perpetual subordinated bonds with a variable interest rate and are issued by Royal FrieslandCampina N.V. A maximum of EUR 160 million of FrieslandCampina free member bonds will be issued.
Free member bonds are part of FrieslandCampina’s equity. With a view to the interests of members and maintenance of a healthy financial base for the business, FrieslandCampina has a structure in which member farmers participate in the funding of Royal FrieslandCampina N.V.

An information pack with an acceptance form will be sent automatically to the home address of qualifying members, who will be able to voluntarily convert Campina bonds into FrieslandCampina free member bonds. EUR 1 Campina bonds will be converted into EUR 0.90 FrieslandCampina free member bonds. The expected conversion date is 1 June 2009. If bonds are converted, interest will be paid on Campina bonds until 30 December 2008 and on FrieslandCampina free member bonds from 30 December 2008.
There are differences between Campina bonds and FrieslandCampina free member bonds.

The Campina bonds have a limited term (the maturity date depends on the tranche), while the FrieslandCampina free member bonds are perpetual.

Interest rate
There are different interest rates for the two bonds: the current rate on the Campina bonds is 4.75%. From 1 June 2009, the interest rate will be 3.60%. The rate on FrieslandCampina free member bonds is six-month Euribor plus 2.5%. This rate is set twice a year and is 6.428% for the period 1 December 2008 to 31 May 2009. The interest rate for the period 1 June to 30 November will be set at the end of May. If the interest rate were set now, it would be 4.1% based on Euribor at 23 April 2009 of 1.6%.

Internal market
Members and farmers closing their businesses can hold FrieslandCampina free member bonds. They can buy and sell them on an internal market, which is held six times a year. No price is set; the free member bonds are traded at their face value, plus accrued interest.

Qualifying bondholders who wish to convert bonds can state their choice from 27 April 2009 by completing and returning an acceptance form. The acceptance form must be received by FrieslandCampina in Zaltbommel or Cologne no later than 5.30 pm (CET) on Friday, 15 May 2009. Detailed information will be sent to the home address of Campina bondholders on or around Tuesday, 28 April 2009.

Holders of Campina bonds should read the prospectus carefully before they make a decision about converting bonds. They should pay particular attention to the description of the risks associated with choosing free member bonds and of the terms and conditions of free member bonds. A full description of the risks and terms and conditions is included in the prospectus. The official prospectus is available from FrieslandCampina in Zaltbommel and Cologne.

Brochure and form
A special brochure entitled ‘Converting Campina bonds into free member bonds’ includes a brief description of the key points covered in the prospectus. A copy of the brochure, which also contains a conversion acceptance form, will be sent to the home address of all Campina bondholders.