In July 2019, we issued green bonds through public offering for the purpose of funding mass-production equipment for Motors and Inverters for Electric Vehicles.
In June 2018, Meidensha pledged to reduce greenhouse gas emissions by 30% by fiscal 2030 (compared to fiscal 2017 levels) and as part of the First Meiden Environmental Vision and we are promoting reduction of environmental impact. Furthermore, we understand that contributing to the achievement of sustainable development goals (SDGs) is a major management issue facing the Company and we are promoting the environmental contribution business by rolling out environmentally conscious products and services.
By issuing green bonds, we plan to expand our capital procurement resources and deepen the understanding of a wide range of stakeholders regarding our active environmental initiatives.
| Name of bonds | "Meidensha Corporation 2nd Series Unsecured Straight Bonds (with pari passu agreement limited to corporate bonds) (Green Bonds)" |
|---|---|
| Also known as | Meidensha Corporation Green Bonds |
| Maturity | 5 years |
| Total amount of issue | 6.0 billion yen |
| Coupon rate | 0.260％ |
| Issue price | 100 yen for each 100 of corporate bonds |
| Date of issue/date of maturity | July 23, 2019 to July 23, 2024 |
| Redemption method | Bullet payment at maturity |
| Subscription method | Open invitation |
| Security/guarantee | Unsecured and non-guaranteed |
| Rating | BBB+ (Japan Credit Rating Agency, Ltd./Rating and Investment Information, Inc.) |
| Use of proceeds | To provide partial funding of enhancement of mass-production facilities for electric vehicle components |
| Lead managing underwriter | SMBC Nikko Securities Inc. |
| Green Bond Structuring Agent |
SMBC Nikko Securities Inc. |
| Principles with which to confirm compliance | Climate bond standard version 2.1 Low Carbon Transport (Land) Standard Version 1.0 (CBI) Green Bond Principles 2018 (ICMA) Green Bond Guidelines 2017 Edition (MOE) |
(As of July 17, 2019 in alphabetical order)
Meidensha Green Bonds are issued and managed according to the Green Bond Framework developed in accordance with the Green Bond Principles 2018*1 drafted by the International Capital Market Association, the Green Bond Guidelines 2017*2 Edition drafted by the Ministry of the Environment, and the Climate Bond Standard Version 2.1*3 drafted by the Climate Bonds Initiative (CBI).
Compliance with these green bonds is assessed by the Japan Credit Rating Agency (hereinafter JCR) according to the JCR Green Bond Evaluation, and the bonds received a rating of Green 1, which is the highest rating, as they fulfilled the Green Bond Principles 2018 and the Green Bond Guidelines 2017.
DNV GL Business Assurance Japan K.K. (DNV GL), one of the world's leading organizations to evaluate and accredit the ESG performance, has verified that Meidensha Green Bonds cleared the requirements in the Climate Bonds Standard Version 2.1 as well as related technological standards.
Meidensha has received certification from Climate Bonds Initiative (CBI), an international nongovernmental organization dedicated to promoting large-scale investments to realize a low-carbon society that sets stringent standards for the issuance of such bonds. Meidensha is the first Japanese private enterprise to receive the CBI certification.
Additionally, JCR and DNV GL has received the notification of Green Finance Organization JAPAN’s decision to grant as subsidy as part of the Financial Support Programme for Green Bond Issuance of MOEJ’s FY 2018*4.
Eligible green project: Equipment for mass production of electric vehicle components
| Nagoya Works: Renovation of existing buildings and introduction of new facilities | |
|---|---|
| Location | 496 Ittangosewari, Nishibiwajimacho, Kiyosu City, Aichi Prefecture |
| Parts to be produced | Inverter-Integrated Motor Units for EVs |
| Start of operations | Scheduled for November 2019 |
| Total floor space | 4,620m2 |
| Production capacity | Maximum annual production of 170,000 units |
| Kofu Meidensha Electric Mfg. Co., Ltd.: Construction of new building and introduction of new facilities | |
|---|---|
| Location | 825 Nakadate, Chuo City, Yamanashi Prefecture |
| Parts to be produced | Motors for EVs |
| Start of operations | Scheduled for November 2019 |
| Total floor space | 2,660m2 |
| Production capacity | Maximum annual production of 170,000 units |
| Numazu Works: Expansion of facilities | |
|---|---|
| Location | 515 Kaminakamizo, Higashimakado, Numazu City, Shizuoka Prefecture |
| Parts to be produced | Inverters for EVs |
| Start of operations | Scheduled for April 2019 |
| Total floor space | 240m2 |
| Production capacity | Maximum annual production of 120,000 units |
Nominated green bond projects were selected and evaluated by Meidensha Accounting & Financing Group Financing Division, after the consideration of conformity to qualified criteria, based on the Group's management philosophy, environmental vision, and CSR critical issues. Final approval of the project selection is implemented by the director of treasury executives of the company decision making committee. Furthermore, we also conduct verification of negative environmental impact of eligible projects.
The proceeds from the Green Bonds will be fully allocated to eligible projects and assets and tracked. Fund allocation will be implemented in one year after bond issuance. The proceeds will be managed by the Meidensha Accounting & Financing Group Financing Division. The proceeds outstanding balance will be managed by internal Meidensha forms (earmarked by numbering) and its budget and actual expense tracked with Meidensha internal protocol (accounting management scheme) quarterly. These will be requested to receive approval from the Meidensha General Manager of Financing Division to avoid deviation (financial outflow). Meidensha also manages the preservation of documents related to cash management by using the accounting document retention term list and through the accounting regulations of Meidensha concerning the scope and preservation of accounting documents.
Until the allocation of procurement funds is decided, we will manage cash or cash equivalents equal to funds.
We will report the status of funding once a year until the full amount of funds to be procured is applied to projects that meet qualified criteria. Disbursement status disclosed is as follows: (1) Amount of funds appropriated, (2) Approximate amount or ratio in case of unappropriated funds, operation schedule of allocated time, and unappropriated period, (3) Estimated amount or percentage when the refund is applied.
We will disclose in a timely manner if there is a major change in the procurement funding plan or when there is a significant change in the fund status after the procurement funds have started to be appropriated.
Until Green Bonds are redeemed, the following indicators showing the progress status of qualified projects funded and the environmental improvement effect are scheduled to be disclosed once a year on our website.
KPI in Impact Reporting: Annual CO2 emission reduction from eligible projects*5
*1 The guideline regarding green bond Issuance is written by Green Bond Principles Executive Committee which is facilitated by ICMA (International Capital Market Association.)
*2 MOEJ (Ministry of the Environment of Japan) has established “the Green Bond Guidelines, 2017” in March 2017 with the purpose of spurring issuances of Green Bonds and investments in them in Japan. The Guidelines, with due consideration to the consistency with the GBP, which is widely accepted in the Green Bond markets in the world, provide issuers, investors and other market participants with illustrative examples of specific approaches and interpretations tailored to the characteristics of the Japan's bond market which will aid these market participants to make decisions on working-level matters related to Green Bonds.
*3 Climate Bonds Standards (CBS) is a standard developed by Climate Bonds Initiative (CBI), the UK’s international nongovernmental organization, which includes certification process, pre issuance and post-issuance requirements and sectoral eligibility and guidance. And is aimed with the objective of “Ensuring credibility and transparency of Green Bond’s contribution to the environment. CBS imposes a sectoral standard, and it is necessary to meet the applicable sectoral standard in judging the eligibility of projects and assets covered by the green bond.
*4 A program where subsidies will be provided for the expenses that are required by those who support companies, municipalities and other bodies who seek to issue Green Bonds, in the form of granting external reviews, consultation on establishing a Green Bond framework, etc.
(1) A Green Project that meets one of the following criteria:
(2) Compliance with the Green Bond Guidelines to be confirmed by an external review organization before issuance.
(3) It cannot be “Green wash” bonds.
*5 The formula for calculation differs from Meidensha’s calculation of environmental contribution and CO2 emissions reduction, which are stated under Meidensha’s environmental targets, as they are calculated according to the ICMA Green Bond Principles 2018, the MOE Green Bond Guidelines 2017, the CBI Climate Bond Standard Version 2.1, and the Low Carbon Land Transport and the Climate Bonds Standard (v1.0).
This content is provided for the sole purpose of publicly announcing the Company’s issuance of the Bonds, and not for the purpose of soliciting investment or engaging in any other similar activities within or outside of Japan.