Green bond and Green loan

JEI promotes acquisition of assets with excellent environmental performance. As for financial aspects, JEI pursues expansion of the base of investors who display high interest in environmentally conscious projects.
As part of such efforts, JEI is implementing advanced procurement through green bonds and green loans in financing related to the acquisition of AKASAKA INTERCITY AIR, which is an Eligible Green Project.

Green Bond

JEI decided to issue of green bonds with an aim to further promote ESG activities as well as expand fund procurement methods through proactive expansion of the investor base in ESG investments.

Green Bonds are a type of bond instrument to finance Eligible Green Projects. The issuance of Green Bonds must adhere to International Capital Market Association’s (ICMA) Green Bond Principles.

JEI has obtained a second-party opinion from Sustainalytics, an ESG rating agency, for the eligibility of Green Bond Framework. For details of the second-party opinion, please refer to the following website.

Green Bond Framework

(1) The use of proceeds from the Green Bond issuance

The net proceeds from the Green Bond issuance will be used for acquisition of assets defined in (2) below (hereinafter “Eligible Green Projects”), repayment of borrowings required in the acquisition of Eligible Green Projects or redemption of investment corporation bonds that have already been issued (including Green Bonds) required in the acquisition of Eligible Green Projects.

(2) Eligible Green Projects

Eligible Green Projects are assets that have received or scheduled to receive one of the following certifications within the last 2 years as of the payment date upon issuance of Green Bonds among the specified assets owned by JEI.

  1. DBJ Green Building Certification: 5, 4 or 3 stars
  2. CASBEE Certification: S, A or B+ rank

Eligible Green Projects are selected by the sustainability council (a council composed of the President and other board members established to organizationally promote sustainability initiatives) of Japan Excellent Asset Management Co., Ltd., the Asset Management Company of JEI.

(3) Maximum Issuance Amount of Green Bonds

The Debts of Eligible Green Projects calculated by multiplying the determined total period-end book value of Eligible Green Projects in the latest fiscal period by total assets-based LTV determined as of the end of the latest fiscal period is set as the maximum issuance amount of Green Bonds.

Reporting

(1)Allocation Reporting

The allocation report about JEI Green Bond is as follows.

As of December 31, 2019

Total amount of outstanding Green Bonds 4,000 million yen
Name Amount of Green Bond to be issued
(million yen)
Interest
Rate
Issuance date Redemption date Term of
Issuance
No.14 Unsecured Investment Corporate Bonds
(JEI Green Bond)
4,000 0.63% August 10, 2018 August 10, 2028 10years
Use of Funds to be procured The funds procured through the issuance of the Investment Corporation Bonds will be a located to a portion of early payment (JPY 4,000 million yen) out of short-term borrowings (JPY 6,000 million yen) used for the acquision of AKASAKA INTERCITY AIR, which is an Eligible Green Project, on July 2, 2018.
Total Eligible Green Projects 166,098 million yen
LTV 44.9 %
The Debts of Eligible Green Projects 74,578 million yen

The List of Eligible Green Projects

Property Name Book Value
(million yen)
AKASAKA INTERCITY 26,824
AKASAKA INTERCITY AIR 6,559
Nisseki Yokohama Building 23,106
Mansard Daikanyama 11,275
Omori Bellport D 20,763
HAMARIKYU INTERCITY 17,437
Kowa Nishi-Shimbashi Building 10,997
Musashikosugi Tower Place 12,494
Kowa Kawasaki Higashiguchi Building 9,872
Kowa Kawasaki Nishiguchi Building 26,769
Total 166,098

(2)Impact Reporting

The Assessment Rank of Eligible Green Projects

As of December 31, 2019

Eligible Green Projects DBJ Green Building Certification CASBEE
AKASAKA INTERCITY ★★★★★ -
AKASAKA INTERCITY AIR ★★★★★ -
HAMARIKYU INTERCITY Residential portion ★★★★★
Office portion ★★★★
-
Mansard Daikanyama ★★★★ -
Nisseki Yokohama Building ★★★★ -
Omori Bellport D ★★★ -
Kowa Nishi-Shimbashi Building ★★★ Class A
Musashikosugi Tower Place ★★★ -
Kowa Kawasaki Higashiguchi Building ★★★ -
Kowa Kawasaki Nishiguchi Building ★★★ -

The quantatative indicators of Eligible Green Projects

Term The Number of Eligible Green Projects Total amount of the leasable floor space
(㎡)
Electricity consumption(※)
(MW/h)
Water consumption(※)
(Thousand ㎥)
CO2 emissions(※)
(t-CO2)
April 2018~ March 2019 10 195,963.90 46,268 295.6 28,822
  • Limited to the scope in which JEI has energy control authority.

Green Loan

JEI conducts borrowings through green loans as well as green bonds for the purpose of diversifying its fund procurement methods in view of expansion of the base of investors who display high interest in environmentally conscious projects.

Green loans refer to borrowings allocated to environmentally conscious businesses in compliance with the “Green Loan Principles”, an international guideline.

JEI’s green loans are the first borrowings conducted by a J-REIT in compliance with said principles. Furthermore, borrowings through green loans will be conducted within the amount of Debts of Eligible Green Projects in conjunction with outstanding green bonds.

Actual results of procurement through green loans

Issue Amount 2,000 million yen

As of December 31, 2019

Lender Loan
Amount
(million yen)
Interest Rate Drawdown
Date
Principal
Repayment
Date
Borrowing
Period
Evaluation
(Evaluation organizations)
Mizuho Bank, Ltd. 2,000 Base interest
rate (JBA one-month Yen-TIBOR) +0.20%
September
28, 2018
September
30, 2020
2years Green1
Japan Credit Rating Agency, Ltd. (JCR)
Use of Funds to be procured Allocation to a portion of funds for early repayment of 2,000 million yen out of short-term borrowings of 6,000 million yen borrowed on July 2, 2018 and used in the acquisition of AKASAKA INTERCITY AIR, an Eligible Green Project.