Japan International Cooperation Agency (JICA) (President: Akihiko Tanaka) announced today, September 8, that the terms and conditions of the 75th, 76th and 77th JICA Bonds (Domestic FILP Agency Bonds) “Disaster Prevention and Reconstruction Bonds” were determined as follows.
The 75th Japan International Cooperation Agency Bond
Issue amount: 10 billion yen
Term: 5 years (redeemable on September 20, 2028)
Issue date: September 22, 2023
Interest rate: 0.349%.
Issue price: 100 yen per 100 yen par value
Applicant yield: 0.349%.
Collateral: General collateral
Listing: TOKYO PRO-BOND Market
Co-lead managers: Nomura Securities (administrative lead manager), Daiwa Securities, Tokai Tokyo Securities (*Alphabetical order except for the administrative lead manager)
Rating: Rating and Investment Information, Inc.: AA+, Standard & Poor’s Ratings Japan K.K.: A+
The 76th Japan International Cooperation Agency Bond
Issue amount: 12 billion yen
Term: 10 years (redeemable on June 20, 2033)
Issue date: September 22, 2023
Interest rate: 0.747%.
Issue price: 100 yen per 100 yen par value
Applicant yield: 0.747%.
Collateral: General collateral
Listing: TOKYO PRO-BOND Market
Co-lead managers: Nomura Securities (administrative lead manager), SMBC Nikko Securities Inc.
Rating: Rating and Investment Information, Inc.: AA+, Standard & Poor’s Ratings Japan K.K.: A+
77th Japan International Cooperation Agency Bond
Issue amount: 10 billion yen
Term: 20 years (redeemable on June 19, 2043)
Issue date: September 22, 2023
Interest rate: 1.404%.
Issue price: 100 yen per 100 yen par value
Applicant yield: 1.404%.
Collateral: General collateral
Listing: TOKYO PRO-BOND Market
Co-lead managers: Daiwa Securities (administrative lead manager), SMBC Nikko Securities Inc.
Rating: Rating and Investment Information, Inc.: AA+, Standard & Poor’s Ratings Japan K.K.: A+
Natural disasters such as earthquakes, tsunamis, torrential rains, floods, and volcanic eruptions, including the Turkey-Syria earthquake in February 2023, have become a major threat to achieving human security. Developing countries in particular have accumulated little investment (infrastructure, human capital, etc.) for disaster reduction, causing increased loss of human lives and economic losses due to disasters. Among natural disasters, floods and landslides caused by climate change, which have become more frequent and severe in Japan in recent years, are also causing significant damage in developing countries. In developing countries where urbanization is progressing rapidly, the risk of disasters is increasing due to uncontrolled development, population concentration in urban areas, and industrial concentration without sufficient risk reduction. In addition, the globalization of economic activities and supply chains in recent years has raised concerns about increasing disaster risks worldwide.
In order to achieve the organization’s mission, “Achieving Human Security and High Quality Growth,” under the issue-specific business strategy “Disaster Risk Reduction through Disaster Reduction and Recovery,” the Organization is working to strengthen systems that will enable developing countries to independently expand investment in disaster risk reduction in the future. Specifically, we are supporting the development of disaster prevention infrastructure, strengthening disaster risk management capacity, and promoting “Build Back Better,” in which efforts are made to reduce future disaster risks in the process of post-disaster recovery and reconstruction. This support is based on Japan’s unique disaster prevention technologies, policies, systems, and knowledge based on the country’s experience with many natural disasters and its constant efforts to build a disaster-resistant society.
In order to further strengthen its efforts for disaster prevention and recovery from natural disasters, JBIC will issue these bonds as its first “Disaster Prevention and Recovery Bonds”.
On April 7, 2023, JICA released a new “JICA Social/Sustainability Bond Framework” and obtained a second party opinion from Moody’s. The Bonds will be issued as Sustainability Bonds in accordance with the Framework, and the proceeds from the Bonds will be used to support disaster prevention and recovery from natural disasters (excluding loans to coal-fired power generation projects).
In addition, the sustainability bonds issued by MHCB are positioned as financing to secure the funds necessary to achieve the SDGs in Japan’s “Revised Guidelines for the Implementation of the SDGs” (see note).
The bonds are scheduled to be listed on the TOKYO PRO-BOND Market. However, since the bonds are FILP agency bonds, which are exempt from Chapter II of the Financial Instruments and Exchange Act, and do not fall under the category of private placement for specific investors, they can be sold to all investors, including general investors. There are no restrictions on transfer, and the same treatment applies to secondary market transactions.
(Note: In the “Revised Guidelines for Implementation of the SDGs (December 20, 2019, partially revised)” decided by the Headquarters for Sustainable Development Goals (SDGs) Promotion established in the Cabinet (headed by the Prime Minister), “ESG finance and impact finance that consider environmental, social and governance factors, Accelerating the expansion of finance that considers not only economic returns but also social returns, such as social finance, SDG finance, and the issuance of JICA bonds as social contribution bonds, is important for mobilizing private-sector funds to achieve the SDGs. The Japanese government will promote measures to create an environment for this purpose and encourage the private sector to take action.
(In charge)
Finance Department Finance Section 1
(tel: 03-5226-9279)
© Source JICA
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