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MHI Sets Terms and Conditions of First Green Bond Issuance -- Aims to Help Solve Environmental Issues, Achieve SDGs, and Make a Decarbonized World a Reality --
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･ Issuance aimed at raising funds in Japan to support operations in renewable and clean energies
･ Move will contribute to achieving 7th SDG: "ensuring access to affordable, reliable, sustainable and modern energy for all"
Tokyo, November 17, 2020 – Mitsubishi Heavy Industries, Ltd. (MHI) has set the terms and conditions for the corporate green bond (Note1) which will be issued in the Japan market, as announced in the Company's press release of October 30.
1. Objectives and Background
MHI will issue the green bond to finance projects involving renewable and clean energies, with two overarching objectives: to further strengthen the Company's initiatives toward achieving a decarbonized world, and to further enhance awareness toward its initiatives in this respect among a wide spectrum of stakeholders through the dialogue with investors,
2. Outline of the Issuance
| Bond name | Mitsubishi Heavy Industries, Ltd. 36th Unsecured Corporate Bond (with Inter-bond pari passu clause)(MHI Green Bond) |
|---|---|
| Maturity | 5 Years |
| Issuance amount | JPY 25 billion |
| Interest rate | 0.14% |
| Date of issue | November 24, 2020 |
| Redemption date | November 21, 2025 |
| Use of proceeds | New or existing businesses or projects relating to renewable energy or clean energy (wind, hydrogen and geothermal power systems) |
| Acquired rating | AA- (Japan Credit Rating Agency, Ltd.: JCR) |
| Lead manager | Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.; SMBC Nikko Securities Inc.; Mizuho Securities Co., Ltd.; Nomura Securities Co., Ltd.; Daiwa Securities Co., Ltd.; BofA Securities, Inc. (Note2) |
| Green bond structuring agent (Note3) | Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. |
3. Preparation of Green Bond Framework and Acquisition of Second Party Opinion
In preparation for issuance of its green bond, MHI Group has compiled the "Mitsubishi Heavy Industries, Ltd. Green Bond Framework" recording its intentions regarding the four elements stipulated in the Green Bond Guidelines of the International Capital Market Association (ICMA): 1) use of proceeds; 2) process for project evaluation and selection; 3) management of proceeds; and 4) reporting.
With respect to evaluation of the green bond's suitability, the Company has received a second party opinion (SPO) from Sustainalytics, a third-party institution, attesting to the bond's conformity with ICMA's "Green Bond Principles 2018" and the "Green Bond Guidelines" (2020 edition) issued by the Japanese Ministry of the Environment.
- 1An unsecured straight bond issued only to finance green projects: i.e. projects that will result in environmental improvement. The first bond designated as a "green bond" was issued in 2008 by the International Bank for Reconstruction and Development (IBRD), a member of World Bank Group. The scale of the green bond market has subsequently expanded in response to rising attention focused on the environment and such bonds' potential to contribute to initiatives in environmental areas.
- 2Effective November 1, 2020, Merrill Lynch Japan Securities changed its trade name to BofA Securities, Inc.
- 3A green bond structuring agent supports the issuance of a green bond largely by advising the issuer on how to prepare a green bond framework and how to obtain an SPO.
About MHI Group
Mitsubishi Heavy Industries (MHI) Group is one of the world’s leading industrial groups, spanning energy, smart infrastructure, industrial machinery, aerospace and defense. MHI Group combines cutting-edge technology with deep experience to deliver innovative, integrated solutions that help to realize a carbon neutral world, improve the quality of life and ensure a safer world. For more information, please visit www.mhi.com or follow our insights and stories on spectra.mhi.com.