Management Policies
Financial Policies
JEI follows the policies listed below to realize a stable revenue stream and steady growth of investment assets in the medium- to long-term, and engages in agile as well as detailed financial strategies formulated by specialists in finance.
A. Personnel Organization
The Asset Management Company has personnel with abundant experience in finance and stock markets, and has established a structure that enables specialists in finance to formulate and execute financial strategies characterized by agile as well as detailed operations.
B. Utilizing Research
In addition to the personnel structure mentioned above, the Asset Management Company utilizes its business partnership with Mizuho Research & Technologies Ltd. to formulate and execute financial strategies, in light of macro-economic survey reports on the economy, interest rates, foreign currency trends, etc., and future outlooks based on these.
C. Equity Finance
JEI expeditiously issues new investment units by accurately judging financial conditions and considering dilution of investment units (decrease in net assets or distribution per unit by additional issue of investment units), timing of acquisitions of new properties, etc. and ratio of interest-bearing debt to total assets (hereinafter, "LTV").
D. Debt Finance
EI seeks an optimum balance between short-term and long-term fund raising in an effective way while considering agility and stability.
At times, a commitment line may be set up to ensure agility and stability.
JEI pays attention to the following points in undertaking debt financing.
| Fixed and variable interest rates |
For any given capital market situation and interest rate trend, JEI determines various terms and conditions including fixed or floating interest rates. JEI may engage in derivative transactions for the purpose of hedging the risk of interest rate fluctuations in borrowings. |
|---|---|
| Spreading repayment date |
JEI tries to spread the date of repayments of borrowings and maturities of investment corporation bonds. |
| Investment corporation bonds |
JEI may issue investment corporation bonds for the purpose of diversification of means for fund procurements. At the time of issuing investment corporation bonds, it may obtain a rating (ratings) from a designated rating agency (agencies) to use it (them) as one of the indicators for JEI's financial health. |
| The level of LTV |
JEI sets its upper limit for LTV to be 60%, but with such factors as property acquisitions and fluctuations in property appraisal value, the level of LTV may temporarily exceed 60% at times. JEI maintains LTV at around the level of 35% to 50%. |
| Limit on amount of fund procurement |
JEI sets the limit for funding to be one trillion yen, which is the sum of issued investment corporation bonds and the aggregate amount of debt. |
| Lender selection |
JEI borrows funds only from institutional investors (as specified under the Article 67-15 of Act on Special Measures Concerning Taxation, hereinafter "Institutional Investors") In applying for a loan, JEI negotiates debt terms with multiple Institutional Investors and make a decision after comparing their terms. At the same time it considers diversification and enhancement of fund procurement sources to avoid reliance on any specific institutional investor. |
| Policy on setting collateral |
JEI may pledge investment assets as collateral in order to ensure stable and efficient fund-raising activities. |
E. Cash management
JEI may use deposits and guarantee monies received from tenants as a mean for fund procurements. It manages funds by fully reviewing trends of interest rates and fund management situations, while considering such factors as safety and liquidity.
F. Rating Acquisition
JEI may acquire ratings from credit rating agencies as an index to measure financial soundness. Utilizing the credit worthiness underpinned by ratings, JEI considers strategic fund procurement on preferential conditions.
G. Appropriate Control of Balance Sheet
JEI appropriately controls both assets (asset balance, asset acquisition periods, etc.) and liabilities (LTV) by utilizing warehousing functions of the sponsor and by establishing a flexible portfolio.