DBJ: Greening the Bond Market

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The Development Bank of Japan, Inc. (DBJ) issued its inaugural Euro 250 million green bond in October 2014 with a maturity of 3 years. This was the first green bond in the Euro market issued by a Japanese issuer. Those that jointly acted as lead managers for the transaction were Merrill Lynch International, Morgan Stanley & Co. International plc, Citigroup Global Market Limited and Daiwa Capital Markets Europe.  The bond paid an annual coupon of 0.25% per annum and the total amount of the Eligible Assets for the Green Bond is ¥49 billion (approx. €346 million).

Green bonds are created to raise capital for new and existing projects with environmental and social benefits.   DBJ green bond are recourse-to-the-issuer debt obligation for which the proceeds shall be tracked by DBJ and attested to by a formal internal process that will be linked to DBJ’s lending operations for the projects.  The net proceeds of the issuance of the notes will be used to finance the Eligible Assets.  Eligible Assets means new loans and/or existing loans under management by the DBJ which finance a building/development receiving a DBJ Green Building Certification of at least 3 stars out of 5 stars.

The ‘DBJ Green Bond’ won the ADFIAP Outstanding Development Project Award 2015 under the Environmental Development Category.

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