2nd Obayashi Sustainability-Linked Bond
Obayashi Issues 2nd Obayashi Sustainability-Linked Bond
Obayashi Corporation has issued Obayashi Sustainability-Linked Bond through a public offering in the Japanese domestic bond market. This bond issue is the company's 2nd Sustainability-Linked Bonds (*1) under the "Obayashi Sustainability-Linked Finance Framework" established in March 2022. Regarding its adequateness, the company had obtained a second opinion from Rating & Investment Information, Inc. (hereinafter "R&I").
Sustainability-Linked Bonds mean bonds whose terms of issue change depending on whether preset sustainability and other ESG targets are achieved or not. Specifically, Sustainability-Linked Bond issue terms change according to the issuer's commitment to improve, within a time frame set in advance by the issuer, the outcome related to future sustainability and according to whether sustainability performance targets (SPTs), set as numerical goals to be attained in relation to issuer-specified KPIs, have been accomplished or not.
The Obayashi Group has obtained Science-Based Targets (SBT) initiative (*2) certification regarding achievement of targets for 2030 greenhouse gas (GHG) emission reduction in October 2022. The KPI in this issue represents a strong commitment to the "achievement of its decarbonization target," an important pillar of Obayashi's sustainability initiatives, and is also an appropriate measuring progress in the commitment.
Summary of Obayashi Sustainability-Linked Bond
| Redemption period | 5 years (Obayashi Corporation's 27th Series of Unsecured Bond) |
|---|---|
| Issue amount | 20 billion yen |
| Pricing date | June 6, 2024 |
| Issue date | June 12, 2024 |
| Coupon rate | 0.819% per annum |
| KPI | KPI 1： Obayashi Group's CO2 reduction rate under Scope 1&2 scenarios |
| KPI 2： Obayashi Group's CO2 reduction rate under Scope 3 scenario(category1 and 11) | |
| SPTs | SPT 1: 33.6% cut (from fiscal 2019) in Scope 1&2 CO2 emissions for fiscal 2027 Target reporting period：FY2027, Judgment date: End of October 2028 |
| SPT 2: 20.0% cut (from fiscal 2019) in Scope 3(category1 and 11) CO2 emissions for fiscal 2027 Target reporting period：FY2027, Judgment date: End of October 2028 |
|
| Bond characteristics | In case of failure to achieve both SPTs, Obayashi will donate, after the SPT judgment date, an amount equivalent to 0.1% of the issue amount to those public-interest incorporated associations/foundations, international organizations, and municipality-accredited nonprofit organizations which aim to engage in environmental conservation activities, local governments, or other similar entities, with the donation to be completed by the redemption date of the bond issue. In case of failure to achieve SPT 1, the company will donate 0.07% of the issue amount and, in case of failure to achieve SPT 2, the company will donate 0.03% of the issue amount. |
| Managing underwriters | Nomura Securities Co., Ltd. (Book Runner) and Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. |
| Structuring agent (*3) | Nomura Securities Co., Ltd. |
| Credit rating | A+ (R&I) |
Investors in 2nd Obayashi Sustainability-Linked Bond
The following investors have agreed to disclose their participation in Obayashi Sustainability-Lined Bond.
(As of June 6, 2024 in Japanese alphabetical order)
- The Bank of Iwate, Ltd.
- The Osaka City Shinkin Bank
- OTEC CORPORATION
- Kyoei Shinkumi Bank
- The Kuwanamie Shinkin Bank
- THE BANK OF KOCHI, LTD.
- The Kobe Shinkin Bank
- The Sawayaka Shinkin Bank
- THE SHIGA BANK, LTD.
- Shigaken Shinyokumiai
- THE SHIZUOKA BANK, LTD.
- Shizuoka Labour Bank
- SHINONOME SHINKIN BANK
- The Juroku Bank, Ltd.
- SUMITOMO LIFE INSURANCE COMPANY
- Tajima Shinkin Bank
- The Chikugo Shinkin Bank
- Tokio Marine Asset Managemant Co., Ltd.
- The Toho Bank,Ltd.
- NAGANO SHINKIN BANK
- Nakamura Sangyo Gakuen
- Nissay Asset Management Corporation
- Japan Earthquake Reinsurance Co.,Ltd.
- Fukuokaken Credit Union
- Fukushima Shinkin Bank
- North Pacific Bank,Ltd.
- MATSUMOTO SHINKIN BANK
- Mitsui Sumitomo Insurance Company, Limited
- Sumitomo Mitsui Trust Asset Management Co., Ltd.
- Mitsui Direct General Insurance Company, Limited
- Mitsubishi UFJ Trust and Banking Corporation
- The Musashino Bank,Ltd.
- The Yamagata Bank,Ltd.
Obayashi Sustainability-Linked Finance Framework
Eligibility Evaluation by the third party (R&I) regarding Obayashi Sustainability-Linked Bond
- *1 Please refer to the link below for the news release of 1st Sustainability-Linked Bond
Obayashi Sustainability-Linked Bond - *2 The STB is a target for GHG emission reduction that a company-set for 5 to 15 years ahead as compatible with either the scenario that was proposed in Paris Agreement of "well below 2 degrees Celsius" above the pre-industrial level and limit to the 1.5 °C.
- *3 The restructuring agent refers to a company that supports ESG bond issuance through the establishment of a framework, advice for the acquisition of a second opinion, and other forms of assistance.