Transition Bond
IHI Corporation has issued Transition Bond*.
IHI Group has positioned climate change as a central business challenge in keeping with its Corporate Philosophy “Contribute to the development of society through technology” and “Human resources are our single most valuable asset”. It pledged in IHI Group ESG Management, which it announced in November 2021, to achieve carbon neutrality across its entire value chain by 2050.
Transition bonds use the proceeds to fund efforts to tackle climate change by cutting greenhouse gas emissions as part of long-term strategies to help decarbonize economies.
Summary of Transition Bonds
| Bond name | IHI 49th Unsecured Bonds | IHI 50th Unsecured Bonds |
|---|---|---|
| Maturity | 5 years | 10 years |
| Amount | 11 Billion Yen | 9 Billion Yen |
| Interest rate | 0.39% | 0.62% |
| Date of issuance | June 6, 2022 | June 6, 2022 |
| Date of redemption | June 4, 2027 | June 4, 2032 |
| Proposed fund uses |
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| Lead manager |
Mizuho Securities Co., Ltd.，Nomura Securities Co., Ltd. |
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| Acquired rating |
A- (Japan Credit Rating Agency, Ltd.), A- (Rating and Investment Information, Inc.） |
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| Third-party evaluation entity |
IHI obtained a second-party opinion from Japan Credit Rating Agency, Ltd., relating to conformity assessments, including for the International Capital Market Association’s Climate Transition Finance Handbook 2020. |
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| Structuring Agent* |
Mizuho Securities Co., Ltd. |
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A structuring agent advises issuers on developing transition bond frameworks and on securing second-party opinions and other external third-party evaluations.
Transition Bond Framework
IHI developed a Transition Bond Framework (see note 1) for this issuance. IHI’s transition bonds will finance initiatives to reduce Scope 1 and 2 greenhouse gas emissions from its own operations and support endeavors to lower Scope 3 emissions from upstream and downstream processes.
See appended PDF, titled IHI Corporation Transition Bond Framework
Ministry of Economy, Trade and Industry of Japan Chooses IHI Transition Bond Issue as One of its 2021 Climate Transition Finance Model Projects
The Ministry of Economy, Trade and Industry selected IHI’s offering as one of its 2021 Climate Transition Finance Model Projects. IHI Group’s transition strategy under the framework encompasses roadmaps for a range of sectors. These include chemicals, electricity, and gas (for the Ministry of Economy Trade and Industry), and marine transportation and aviation (for the Ministry of Land, Infrastructure, Transport and Tourism).
Related News Release
Ministry of Economy, Trade and Industry of Japan Chooses Upcoming IHI Transition Bond Issue as One of its 2021 Climate Transition Finance Model Projects (press release IHI, March 28, 2022)
IHI Transition Bond Terms and Conditions Determined (press release IHI, May 31, 2022)
Reporting
Allocation report and Impact report