On October 15, 2020, Development Bank of Japan Inc. ("DBJ") issued its EUR 700 million, sixth sustainability bond (the 85th MTN). Sustainability bonds are one type of socially responsible investment (SRI) bonds which have been rapidly growing in issuance amount around the globe. This bond marks the seventh SRI bond issuance by DBJ.
In terms of environmental aspect, beginning with antipollution measures implemented in the late 1960s and early 1970s, DBJ has provided more than JPY 3 trillion in loans and investments for environmental projects over the past 50 years. The DBJ Environmentally Rated Loan Program (ERLP) was incorporated into our product lineup in fiscal 2004, with DBJ Green Building Certification (GBC) following in fiscal 2011. (As of the end of March 2020, the cumulative loan amount of the ERLP was JPY 1.5 trillion and, as of the end of July 2020, the number of properties certified under DBJ GBC was 773.)
In terms of social aspect, we have functioned as a safety net when natural disasters happen such as the Great Hanshin-Awaji Earthquake. In addition to that, we have responded to the crises such as the global financial crisis and the outbreak of COVID-19.
Considering growing demand for SRI investment across the globe, DBJ issued its inaugural Green Bond in 2014 and Sustainability Bonds in 2015, 2016, 2017, 2018 and 2019 in a successive manner. In 2020, the outbreak of COVID-19 brought attention to sustainable finance, and especially to that of its social aspect. Under such circumstances, with various social challenges including high number of natural disasters, an aging population and infrastructure, as well as the outbreak of COVID-19, we saw a need to revise its Sustainability Bond Framework by expanding it to incorporate new eligible assets for both green and social aspects and have developed an updated framework focused on climate change mitigation, disaster resiliency and healthcare & social well-being. More information on this Framework is available on our website. The net proceeds, or an amount equivalent to the net proceeds, of this bond issuance will be allocated, by way of various financial instruments, exclusively to finance or refinance, in whole or in part, existing and/or future projects or businesses which is described in our Sustainability Bond Framework.
Sustainability ratings company ISS ESG has provided a second-party opinion on the DBJ Sustainability Bond framework. More information on these are available on our website.
The transaction was placed with SRI investors, including Alliance Bernstein, Crédit Agricole SA, Danske Bank Asset Management, PFA Pension, Raiffeisen Capital Management and Schroders to eventually realize one of the largest euro-denominated DBJ SRI bonds. By investor type, the distribution was as follows: central banks and other official institutions 24%, insurance companies and pension funds 5%, asset managers and hedge funds 58% and banks 13%. By geographical type, it was as follows: EMEA 88%, APAC 12%.
In accordance with its Policy on Sustainability, which focus on the practice of sustainability management, DBJ commits to continuously issuing SRI bonds in the future.
In line with our "Design the Future with Financial Expertise" corporate philosophy, DBJ will promote and contribute to the development of the SRI bond market and actively support clients that exhibit high environmental and social awareness.
The main terms of the bonds
| Issuer | Development Bank of Japan Inc. |
| Market | Euro Market |
| Issue amount | EUR 700 million |
| Maturity | 4 years (due on October 15, 2024) |
| Coupon | 0.010% |
| Re-offer price | 100.751% |
| Listing | Luxembourg Stock Exchange Euro MTF |
| Lead managers | J.P. Morgan Securities plc Crédit Agricole Corporate and Investment Bank Daiwa Capital Markets Europe Limited Merrill Lynch International |
| Signing date | October 12, 2020 |
| Closing date | October 15, 2020 |
| Bond ratings | A1: Moody's, A: S&P |
| This communication does not contain or constitute an offer of securities for sale, or solicitation of an offer to purchase securities, in the United States, Japan or any other jurisdiction where such an offer or solicitation would be unlawful. Securities may not be offered or sold in the United States absent registration under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or an exemption from registration, and any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer and that will contain detailed information about the issuer and management, as well as financial statements. The securities referred to herein have not been and will not be registered under the Securities Act. |
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