Obayashi Sustainability Bond

Obayashi Corporation has issued a sustainability bond

Issuance of ESG bonds following Green Bond in 2018
Obayashi Corporation has issued Obayashi Sustainability Bond (Obayashi Corporation's 24th Series of Unsecured Bonds) through a public offering in the Japanese domestic bond market. This issuance of ESG bonds follows the Obayashi Green Bond (Obayashi Corporation's 23rd Series of Unsecured Bonds) in October 2018.

Sustainability bonds are bonds issued in accordance with the Green Bond Principles, Social Bond Principles, and Sustainability Bond Guidelines of the International Capital Market Association (ICMA), and/or the Green Bond Guidelines of the Ministry of the Environment, Japan. They are intended to raise proceeds for projects that address or solve specific social issues, achieve positive social outcomes (Social Project), or contribute to environmental sustainability including climate change (Green Project).

Obayashi Sustainability Bond received a second party opinion from DNV GL Business Assurance Japan K.K. and Rating and Investment Information, Inc. regarding its eligibility for these guidelines.

The proceeds from the sustainability bond shall be allocated to the following projects undertaken by the Obayashi Corporation Group: (1) Environmentally friendly "Wellness Building" under the concept "smart buildings that are good for all people"; (2) Secure skilled workers for construction industry and strengthen trust relationship with suppliers; and (3)Renewable energy business such as R&D for hydrogen production plant, biomass power generation, and onshore wind power generation (plan).

We believe that pursuing initiatives in sustainability is precisely what it means to practice Obayashi Basic Principles, which is the very essence of conducting our corporate activities. We are working diligently to solve social challenges in order to realize a sustainable society and increase corporate value.

Summary of Obayashi Sustainability Bond

Bond Name
Obayashi Sustainability Bond (Obayashi Corporation's 24th Series of Unsecured Bonds)
Pricing Date
June 14, 2019
Issue Date
June 20, 2019
Redemption Period
5 years
Total Amount of Issue
JPY 10,000 million
Interest Rate
0.110% per annum
Sustainability Projects
Environmentally friendly "Wellness Building" under the concept "smart buildings that are good for all people"
  • Capital investment for ZEB of Obayashi Technical Research Institute Techno Station main building
  • Construction of new environmentally friendly "Wellness Building" (Obayashi Next-Generation Training Facility)
Secure the skilled workers of construction industry and strengthen trust relationships with suppliers
  • Subsidy for certified excellent site supervisors and excellent operators
  • Operation of Obayashi Rin-yu-kai Vocational School
Renewable Energy Business
  • R&D for hydrogen production plant
  • Otsuki Biomass Power Plant
  • Kamikita ogawara onshore wind power (plan)
Managing Underwriters
Nomura Securities Co., Ltd. (Book Runner) and Mitsubishi UFJ Morgan Stanley Co., Ltd.
Sustainability Bond Structuring Agent (*1)
Nomura Securities Co., Ltd.
Rating
A+ (Rating and Investment Information, Inc.)
Shelf Registration Supplementary Prospectus

*1 Sustainability Bond Structuring Agent
One who supports the issuance of sustainability bonds by establishing the issuer's green bond framework and advising on the acquisition of second opinions from external review providers

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External Reviews for Sustainability Bond

Obayashi has received a second party opinion from DNV GL Business Assurance Japan K.K. and Rating and Investment Information, Inc. on the compliance with various guidelines related to the Sustainability Bond as a third-party evaluation in order to ensure the eligibility and transparency of the bond.

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Investors in Obayashi Sustainability Bond

The following investors have agreed to disclose their participation in Obayashi Sustainability Bond. (As of June 20, 2019 by industry)

  • Nippon Life Insurance Company
  • SUMITOMO LIFE INSURANCE COMPANY (Available only in Japanese)
  • THE DAIDO FIRE & MARINE INSURANCE CO., LTD.
  • Mitsubishi UFJ Trust and Banking Corporation
  • Sumitomo Mitsui Trust Asset Management Co., Ltd.
  • AXA INVESTMENT MANAGERS JAPAN LTD.
  • The 77 Bank, Ltd.
  • The Aichi Bank, Ltd.
  • THE BANK OF NAGOYA, LTD.
  • The Daitokyo Shinkumi Credit Cooperative

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Obayashi Sustainability Bond Framework

Obayashi Corporation has established Obayashi Sustainability Bond Framework. This framework is aligned with the four core components ("Use of Proceeds," "Process for Project Evaluation and Selection," "Management of Proceeds" and "Reporting") under the Green Bond Principles 2018, Social Bond Principles 2018, and/or the Sustainability Bond Guidelines 2018 (International Capital Market Association).

Use of Proceeds
Environmentally friendly "Wellness Building" under the concept "smart buildings that are good for all people"
  • Capital investment for ZEB of Obayashi Technical Research Institute Techno Station main building
  • New Environmentally friendly "Wellness Building"
Secure the skilled workers of construction industry and strengthen trust relationships with suppliers
  • Subsidy for certified excellent site supervisors and excellent operators
  • Operation of Obayashi Rin-yu-kai Vocational School
Renewable Energy Business
  • R&D for hydrogen production plant
  • Otsuki Biomass Power Plant
  • Kamikita ogawara onshore wind power (plan)
Process for Project Evaluation and Selection
Green and social aspects of the project should be evaluated to determine whether the project is eligible for the use of proceeds as sustainability bonds, and whether it is significant as six ESG materiality initiatives that more clearly articulate the social issues addressed by the Obayashi Group.
Management of Proceeds
The proceeds from the sustainability bond shall be managed by the Finance Department, Headquarters.
The amount of proceeds allocated to the sustainability projects shall be compiled quarterly and the outstanding balance of the proceeds shall be confirmed.
The outstanding balance of the proceeds shall be managed as a part of cash and cash equivalents.
Reporting
The status of the allocation of the sustainability bond proceeds and environmental and social improvement effect shall be reported and reviewed by DNV GL Business Assurance Japan K.K. and Rating and Investment Information, Inc. annually until the redemption of the sustainability bond.
The report and the result of the review conducted by DNV GL Business Assurance Japan K.K. and Rating and Investment Information, Inc. shall be disclosed in the Obayashi Corporate Report and on Obayashi Corporation's website.

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