Press Information
MHI Finalizes Terms of First Transition Bond Issuance -- 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 the 2021 Climate Transition Finance Model Projects of the Ministry of Economy, Trade and Industry
･ Based on the selected model, the issuance via public offering in the domestic market will fund projects related to the achievement of carbon neutrality
･ MHI, as a leading company in the decarbonization field with an extensive track record and ongoing development of advanced technologies, is accelerating the promotion of projects that contribute to carbon neutrality of Japan and the world
Tokyo, September 2, 2022 – Mitsubishi Heavy Industries, Ltd. (MHI) has finalized the issuance terms of the transition bond being issued today via public offering in the domestic market, as announced in the Company’s press release of August 5, 2022.
The issuance is based on MHI’s selection as a model example for 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 reductions from its own economic activities, but will also attempt 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 | Mitsubishi Heavy Industries, Ltd. 40th Series Unsecured Bond (with inter-bond pari passu clause) (1st Mitsubishi Heavy Industries Transition Bond) |
|---|---|
| Maturity | 5 years |
| Issuance amount | 10 billion JPY |
| Interest rate | 0.310% |
| Issuance date | September 8, 2022 |
| Redemption date | September 8, 2027 |
| Use of proceeds | New investments and refinancing of existing investments relating to eligible businesses or projects (decarbonize existing infrastructure, build hydrogen solutions ecosystem, build a CO2 solutions ecosystem) |
| Acquired rating | AA- (Japan Credit Rating Agency, Ltd. [JCR]) |
| 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 +Ministry of the Environment Japan Basic Guidelines on Climate Transition Finance (May 2021). |
- Mitsubishi Heavy Industries, Ltd. Green/Transition Finance Framework
- Second Party Opinion
- “Selection of Model Example for 2021 Climate Transition Finance Model Projects of Ministry of Economy, Trade and Industry”
- Projects supported by METI which provide information on and reduce the assessment costs of examples that are deemed to have model qualities for 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 are 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.