JFE Holdings, Inc
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  May 28, 2004

  Issuance of Euro Yen Zero Coupon Guaranteed Convertible Bonds due 2009

JFE Holdings (the "Company") has resolved at the Board of Directors held on May 27, 2004 to issue as described below, Euro Yen Zero Coupon Guaranteed Convertible Bonds due 2009 (the "Convertible Bonds"), of 100 Billion Yen in aggregate principal amount.

Background and Objective

The JFE Group has proactively been raising its profitability and reducing debts outstanding, in line with the First Medium Term Business Plan ("The Plan"). The Company expects to achieve the financial targets that were set out in The Plan (Consolidated Ordinary Income of 250 Billion Yen and Consolidated Interest-bearing Debts Outstanding of 1.6 Trillion Yen, in the fiscal year ending March, 2006) one year ahead of schedule, by the fiscal year ending March, 2005.

Even after achieving the financial targets described above, the JFE Group intends to continue to proactively maximize free cash flow. However in order to attain further growth in profits and shareholder value, the Company believes that the most important task is to promptly strengthen its financial position, required to meet changes in the business environment and to prepare for strategic investments in the future. In order to enhance its equity base, and to shorten the time it takes to enhance it, the Company has decided to issue the Convertible Bonds.

Reasons for Choosing the Convertible Bonds

The Company has chosen to issue the Convertible Bonds because it believed that the issuance best suited the financial objectives of the Company for the following reasons; the Convertible Bonds are designed to (i.) minimize the dilution effect on earnings per share ("EPS") by setting a conversion price higher than the current share price (ii.) strengthen its financial position with the conversion to shares in the event of future rise in share price and (iii.) minimize interest costs through the zero coupon.

Terms of Issuance

(1) Aggregate principal amount of the Bonds   ¥100 billion
(2) Offer Price of the Bonds   105.0% of the principal amount of the Bonds
(3) Issue Price of the Bonds   102.5% of the principal amount of the Bonds
(4) Date of issuance (Payment date)   14th June, 2004
(5) Maturity date   15th June, 2009
(6) Conversion Price* (the amount per share)   ¥3,465
  *The amount to be paid per share upon exercise of the Stock Acquisition Right
incorporated in the Bonds is called the "Conversion Price".
Share price information on Pricing Date (May 27, 2004)
    a. Share price (closing price) on the Tokyo Stock Exchange   ¥2,475
    b. Premium
         (Conversion Price*/(Share price (closing price))- 1) x 100
(7) Number of Shares to be Acquired upon Exercise of the Stock
Acquisition Right (Conversion)
  The number of shares to be acquired upon exercise of the stock acquisition rights shall be determined by dividing the aggregate Issue Price of the Bonds deposited by the Conversion Price
(8) Amount to be accounted for as stated capital   ¥1,733 per share

For further information, please contact:

Kenichiro Imai
Deputy General Manager, Public Relations
General Administration and Legal Division
JFE Holdings, Inc.
Tel: +81-3-3217-4030
Fax: +81-3-3214-6111

Note: This press release is intended as general information regarding the Company's issuance of convertible bonds and shall not be considered an offering of securities. This press release shall not be construed as an offering of securities in any region including Japan, the United States or Canada. The securities may not be offered or sold in the United States absent registration or an applicable exemption under the Securities Act of 1933. In the event of an offering of securities in the United States, a prospectus in English prepared in accordance with the Securities Act of 1933 will be used. The transaction does not involve any public offering of securities in the United States.

United Kingdom: These materials are directed only at (a) persons who have professional experience in matters relating to investments falling within Article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (the "Order"); or (b) high net worth entities, and other persons to whom it may otherwise lawfully be communicated, falling within Article 49(1) of the Order (all such persons together being referred to as "relevant persons"). The securities described are available only to and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not rely on this document or any of its contents.


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