On August 24, 2018, Mizuho Bank, Ltd. (President & CEO: Koji Fujiwara) and Japan Excellent, Inc.1 (JEI), a Japanese real estate investment trust, signed a green loan agreement.
Green loans are provided on the condition that their funds be used for environment-conscious projects. Increased investment focusing on environmental, social and corporate governance (ESG) criteria has spurred rapid development of the market for green bonds, which are issued to encourage environmental efforts, but until recently there were no international lending guidelines or rules for loans specified for environmental purposes. In response to this situation, in March 2018, the Loan Market Association2 (LMA) together with the Asia Pacific Loan Market Association3 (APLMA) established the Green Loan Principles, leading to heightened expectations for future market expansion. This green loan between Mizuho and JEI marks the first time a Japanese real estate investment trust has secured a green loan in accordance with the principles established by the LMA and APLMA.
ESG considerations have become an important issue for management as companies face a changing business environment. This loan agreement was reached through discussion and planning with JEI about utilizing a green loan and other environment-conscious financing options. Also, evaluation of this green loan was conducted by Japan Credit Rating Agency, Ltd. The funds from this loan will be utilized to refinance the funds borrowed to acquire Akasaka Intercity AIR, a DBJ Green Building4 certified property
Mizuho is committed to supporting businesses that contribute to the development of a sustainable society, including industrial growth that is conscious of the environment, energy, infrastructure, wellbeing, food, and other global issues. In the future we will continue to support clients’ ESG initiatives through financing support and consulting services including environment-conscious financing such as loans for renewable energy projects.
|Borrower||Japan Excellent, Inc.|
|Borrowing amount||JPY 2.0 billion|
|Date of the loan agreement||August 24, 2018|
|Date of drawdown||September 28, 2018 (scheduled)|
|Loan structure||See the following chart|
- *Existing revolving loan signed on June 27, 2018 and drawn down on July 2, 2018.
- **Acquired on July 2, 2018 (the revolving loan effected on July 2, 2018 was provided for the purpose of acquiring this real estate property).
- ***Green loan entered into on August 24, 2018 for refinancing of the revolving loan drawn down on July 2, 2018.
- 1:Overview of Japan Excellent, Inc.
Company name Japan Excellent, Inc. Location 1–15–9 Minami Aoyama, Minato-ku, Tokyo, Japan Asset management company Japan Excellent Asset Management Co., Ltd. Asset management company core sponsors Nippon Steel Kowa Real Estate Co., Ltd.
The Dai-ichi Life Insurance Company, Limited
Other asset management company sponsors The Dai-Ichi Building Co., Ltd.
Sohgo Housing Co., Ltd.
Mizuho Bank, Ltd.
Mizuho Trust & Banking Co., Ltd.
- 2:Loan Market Association (LMA):
Established in 1996 to promote the expansion of loan markets in Europe, the Middle East, and Africa. Based in London.
- 3:Asia Pacific Loan Market Association (APLMA):
Founded in 1998 to promote the expansion of loan markets in the Asia Pacific region. Headquartered in Hong Kong.
- 4:DBJ Green Building Certification:
The Green Building Certification Program supports real estate properties with high environmental and social awareness, and was created in April 2011 by Development Bank of Japan Inc. The program evaluates, certifies and supports properties that are needed by society and the economy. It makes comprehensive assessments of properties, while evaluating various factors which range from properties’ environmental features to their communication with stakeholders, such as disaster prevention and proper care for surrounding communities.