Sustainability-Linked Bonds

Hulic has issued Japan’s first Sustainability-Linked Bonds (“the Bonds”) in October 15,2020.
For the issuance of the Bonds, the Company applied for “the Public Offering for Model Cases in the Model Creation Projects on Sustainability Linked Loans 2020” launched by the Ministry of the Environment (the “Public Offering”) and the Bonds were highly evaluated for the modeling and pioneering features and selected as the first model case in the Public Offering.
The Bonds are the world’s first publicly offered Sustainability-Linked Bonds that align with the “Sustainability Linked Bond Principles” (“SLB Principles”) published by The International Capital Market Association (“ICMA”) (as of the date of this announcement).
In February 2021, we received the silver prize as well as the Minister of the Environment award in the issuer category of the second ESG Finance Award Japan hosted by the Ministry of the Environment for this bond issuance.

Third-party verification

The compliance of the bonds with the Ministry of Environment Guidelines and SLB Principles has been confirmed by the Ministry of Environment and its contractors (JCR, E&ES).

pre-issuance report(Japanese)

Progress against the targets is reviewed annually by JCR.

Post-Issuance Verification Report
(Japanese, issued in August 2021)

Overview of the Bonds

  10th series unsecured subordinated bonds
(with an inter-bond pari passu clause, Sustainability-Linked Bonds)
Maturity 10 years
Issue amount 10 billion yen
SPTs linked with the issue terms
  • Achievement of RE100 by 2025
  • Completion of Japan's first 12-story fire-resistant wooden commercial facility in the Ginza 8-chome Development Plan by 2025
  • The Bonds set out additional SPTs subject to monitoring
Interest rate An interest rate of 0.44% per annum will be applied during the period from the day immediately following October 15, 2020 through October 15, 2026.
A coupon step-up of 0.10% is triggered if any of the SPTs linked with the issue terms has not been achieved as of August 31, 2026
Pricing date October 9, 2020
Issue date October 15, 2020
Maturity date October 15, 2030
Credit rating A+ (Japan Credit Rating Agency Ltd., “JCR”)

SPTs&Progress against targets

1. Achieving the RE100 Goal

Having launched the solar power generation business in 2012, Hulic started developing photovoltaic equipment that does not apply the feed-in tariff (FIT) system in 2020. Hulic had been aiming to achieve 100% renewable energy (the goal of RE100) by 2025 by developing solar power generation system that covers the power consumption of the Group, including its subsidiaries, but now we are aiming to achieve it ahead of schedule by 2024. The electricity generated by the solar equipment will be supplied to each building through Hulic Property Solution Co., Ltd., a Group company, which acts as a power producer and supplier. This will make Hulic Japan’s first company to entirely cover its power usage by this self-supply initiative, ensuring it achieves the goal set out for RE100 companies. Under this initiative, Hulic expects to be able to use renewable energy at a price equivalent to that of electricity generated by fossil fuels. Success in achieving the RE100 goal through the development of the non-FIT solar power generation will contribute extensively to Hulic’s CO2 reduction plan as well as ensure that Hulic is taking a step forward to realize a sustainable society (low-carbon and material-recycling society) under its long-term vision for the environment.

Progress against the target

List of solar photovoltaic equipment developed by the Company

Start of generation Location
October 2020 Kazo City 1, Saitama Prefecture
January 2021 Omiya Town, Wakaba Ward, Chiba Prefecture
April 2021 Gotomaki, Tamura City, Fukushima Prefecture
April 2021 Meishizawa, Tamura City, Fukushima Prefecture
June 2021 Kikutamachi, Koriyama City, Fukushima Prefecture
June 2021 Kazo City 2, Saitama Prefecture
June 2021 Amimachi, Inashiki, Ibaraki Prefecture
  • Total power generation capacity of solar photovoltaic equipment that started generating power in FY2020:1.3MW

Solar power generation results and RE100 rate of progress

Solar power generation results
(as of the end of December 2020)
RE100 rate of progress
(as of the end of December 2020)*
283.75MWh 0.9%
  • *RE100 rate of progress is reported to CDP, and the calculation method is as follows.
    the amount of power generated by Hulic-owned solar photovoltaic equipment for one year ÷ the total amount of electricity used at the Hulic head office building and on the floors occupied by Group companies in one year

2. Completion of Japan's first 12-story fire-resistant wooden commercial facility in the Ginza 8-chome Development Plan

Since 2018, Hulic has been developing fire-resistant wooden buildings using timber that requires less energy for manufacturing and processing, in response to Japan Forestry Agency’s effort to expand use of wood under a series of initiatives to reduce overall CO2 emissions. Trees absorb CO2 in the air and provide a carbon dioxide fixing solution as they grow, so an abundance of trees in the nation’s land can help cut down CO2 levels. Considering trees are losing ability to absorb CO2 as they get older, it is possible to maintain a certain number of young, CO2 absorbing trees by planting new trees after cutting down old trees to use as building materials. This initiative for fire-resistant wooden buildings helps promote forest circulation, which in turn leads to reduction in CO2.
Hulic is developing Japan’s first 12-story, fire-resistant wooden commercial facility (hybrid construction combining mainly domestic wooden and steel structures) in Ginza, one of its focus areas. The facility is scheduled for completion in October 2021.

Progress against the target

As of August 2021
Under Construction

Forest Circulation

Ginza 8-chome Development Plan (fire-resistant commercial building)

Asset type Commercial facility
Location Ginza 8-chome
(four-minute walk from Shinbashi Station)
Structure Hybrid construction combining wooden and steel structure
No. of floors 12 floors above ground, 1 below
Site area 251.98m2(plan)
Total floor area 2,456.54m2(plan)
Design and construction Takenaka Corporation
Exterior design supervisor Kengo Kuma and Associates
Completion October 2021 (plan)

List of investors that have committed to investing in the Bonds

The list of investors that have committed to investing in the Bonds is included in the press release.

Press release(English)

Received the silver prize in the second ESG Finance Award Japan

In February 2021, we received the silver prize as well as the Minister of the Environment award in the issuer category of the second ESG Finance Award Japan hosted by the Ministry of the Environment for this bond issuance.

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