Press Information
MHI to Issue its First Transition Bond -- Move Will Help Achieve Company’s “Net Zero” by 2040,Toward Realizing a Carbon Neutral World --
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･ MHI’s first transition bond was selected as a model example for 2021 Climate Transition Finance Model Projects of Ministry of Economy, Trade and Industry
･ Based on the selected model, MHI is planning to issue Transition Bond via public offering in the domestic market for funding projects related to the achievement of Carbon Neutrality
･ As a leading company in decarbonization area with extensive track record and efforts towards advanced technologies, MHI is accelerating the promotion of projects contributing to Carbon Neutrality of Japan and the world
Tokyo, August 5, 2022 – Mitsubishi Heavy Industries, Ltd. (MHI) today submitted a revised shelf registration statement to the Kanto Local Finance Bureau in preparation for planned issuance of a transition bond in the Japanese market. The issuance will be undertaken to raise funds for allocation to diverse initiatives toward achieving carbon neutrality.
The planned issuance is based on MHI’s selection as a model example of the “2021 Climate Transition Finance Model Projects”(Note) being supported by the Ministry of Economy, Trade and Industry (METI), as announced in the Company’s press release of March 18, 2022. One of the unique features of this model example is that MHI not only plans to achieve emission reduction from the economic activities of itself but also attempts to enable the realization of transition strategies of other parties through its products and services. Through issuance of its first transition bond, MHI looks to diversify its fund procurement methods and achieve its target of carbon neutrality by 2040.
Outline of the Issuance
| Bond name (expected) | Mitsubishi Heavy Industries, Ltd. 40th Series Unsecured Bond (with inter-bond pari passu clause) (1st Mitsubishi Heavy Industries Transition Bond) |
|---|---|
| Maturity (expected) | 5 years |
| Issuance amount (expected) | 10 billion JPY |
| Issuance time (expected) | Early September |
| Use of proceeds (expected)(Note) |
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| Structuring agent | Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. |
| Lead-managing underwriters | Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.; Mizuho Securities Co., Ltd.; Nomura Securities Co., Ltd.; Daiwa Securities Co., Ltd.; BofA Securities Japan Co., Ltd.; Goldman Sachs Japan Co., Ltd. |
| Second-party opinion | DNV Business Assurance Japan K.K. |
| Evaluation of the transition bond’s suitability | The Company has received a second party opinion (SPO) from DNV Business Assurance Japan K.K., a third-party institution, attesting to the transition bond’s conformity with: ICMA Green Bond Principles 2021; Ministry of the Environment Japan Green Bond Guidelines 2020; LMA, APLMA and LSTA Green Loan Principles”; Ministry of the Environment Japan Green Loan and Sustainability Linked Loan Guidelines 2020; ICMA Climate Transition Finance Handbook 2020; and Financial Services Agency, Japan; Ministry of Economy, Trade and Industry, Japan; and Ministry of the Environment Japan Basic Guidelines on Climate Transition Finance (May 2021). |
(Note)Use of Proceeds is determined based on the above projects. It may as well include R&D funds, business development and operation funds, and working capital of the eligible businesses and/or projects, which have been confirmed consistent with sectoral roadmaps for electricity, gas, iron & steel, chemicals (Ministry of Economy, Trade and Industry) and shipping (Ministry of Land, Infrastructure, Transport and Tourism), outlined in "Mitsubishi Heavy Industries, Ltd. Green/Transition Finance Framework" stated below.
- A project of METI which provides information on and reduces the assessment costs for examples that are deemed to have model qualities in order to promoting the spread of transition finance. Examples that conform to the "Basic Guidelines on Climate Transition Finance", formulated by the Ministry of the Environment (MOE) and the Financial Services Agency (FSA), and have model qualities will be selected as model examples. For further information:
https://www.meti.go.jp/english/press/2022/pdf/0120_Climate_Transition_Finance.pdf “Case Study：Mitsubishi Heavy Industries, Ltd. Transition Bond”
https://www.meti.go.jp/policy/energy_environment/global_warming/transition/transition_finance_case_study_mhi_eng.pdf
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.