NAF aims to strengthen the funding base by expanding the group of investors interested in ESG investment and financing, along with promoting initiatives for sustainability even further, by procuring funds through Green Bonds.
Green Finance Framework
NAF has formulated the green finance framework as described below as part of its aim of conducting green finance.
Use of Proceeds
NAF plans to apply the proceeds from green finance to funds for acquisition of eligible green assets (described in “Eligibility criteria” below) and funds for repayment of existing loans or redemption of investment corporation bonds that were procured for acquisition of eligible green assets.
Eligibility Criteria
Assets for which any of the following certifications from a third-party certification body (“green building certification”) has been or will be obtained (“eligible green assets”).
- DBJ Green Building Certification: 3 Stars, 4 Stars, or 5 Stars
- BELS Certification: 3 Stars, 4 Stars, or 5 Stars
- Certification for CASBEE for Real Estate: B+, A, or S Rank
- Other green building certification: Rating of an equivalent level to the above
- For details of “eligible green assets”, please see “International Initiatives and External Certifications” page.
Process for Project Evaluation and Selection
The eligibility criteria are drafted by the Office, which is made up of members from across the Asset Management Company, and decided at the Investment Committee, the members of which include the President & CEO, the Chief Investment Officer (CIO), and the Chief Financial Officer (CFO) of the Asset Management Company.
Green finance projects are selected through examination of eligibility carried out by the Office based on the eligibility criteria followed by deliberation and approval by the Investment Committee.
Management of Proceeds
The amount of debt calculated by multiplying total acquisition price of eligible green assets in NAF’s portfolio by the ratio of interest-bearing debt to total assets (“amount of eligible green debt”) will be set as the upper limit amount for green finance and managed so that the balance of green finance does not exceed the amount of eligible green debt.
Reporting
The following items will be disclosed on the NAF website as at the end of February of each year so long as the balance of green finance is outstanding.
- Total acquisition price of eligible green assets
- Ratio of interest-bearing debt to total assets
- Amount of eligible green debt
- Balance of green finance outstanding
As of February 28, 2023
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| Total eligible green assets (billion yen) | 81.1 |
|---|---|
| LTV | 51.5% |
| Eligible green debt amount (billion yen) | 41.7 |
| Green finance (billion yen) | 11.0 |
Reporting on status of proceed allocation is as follows.
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| Green finance (billion yen) | 11.0 |
|---|---|
| Green bonds (billion yen) | 5.0 |
| Green loans (billion yen) | 6.0 |
- *For details of green finance, please see “Investment Corporation Bonds”・ “Borrowings” page.
Outline of Green Bond Issues
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| Name | Issue date | Total Amount (Yen in millions) |
Interest Rate(%) | Date of redemption | Notes | Target for funding allocation |
|---|---|---|---|---|---|---|
| 3rd Unsecured Investment Corporation Bonds (with special pari passu conditions among specified investment corporation bonds) (green bonds) |
July 16, 2020 | 2,000 | 0.26% | July 16, 2025 | Unsecured, Unguaranteed R&I: AA- |
Park Cube Meguro Tower |
| 4th Unsecured Investment Corporation Bonds (with special pari passu conditions among specified investment corporation bonds) (green bonds) |
July 16, 2020 | 2,000 | 0.52% | July 16, 2030 | Unsecured, Unguaranteed R&I: AA- |
Park Cube Meguro Tower |
| 5th Unsecured Investment Corporation Bonds (with special pari passu conditions among specified investment corporation bonds) (green bonds) |
September 30, 2021 | 1,000 | 0.32% | September 28, 2029 | Unsecured, Unguaranteed R&I: AA- |
Shibaura Island Air Tower |
Outline of Green Loans
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| Name of financial institution | Issue date of loans | Balance (Yen in millions) |
Interest rate | Date of maturity | Target for fund allocation |
|---|---|---|---|---|---|
| Nippon Life Insurance Company | November 30, 2021 | 1,000 | 0.53% | November 28, 2031 | Park Axis Toyosu |
| Mizuho Bank, Ltd. | November 30, 2021 | 1,000 | 0.53% | November 28, 2031 | Park Axis Toyosu |
| Nippon Life Insurance Company | May 31, 2022 | 2,000 | 0.65% | May 31, 2032 | Park Axis Toyosu |
| Nippon Life Insurance Company | November 30, 2022 | 2,000 | 0.80% | November 30, 2032 | Park Axis Toyosu |
External review
For eligibility of the green finance framework, NAF has been assigned “Green 1 (F),” the highest evaluation grade in the JCR Green Finance Framework Evaluation by Japan Credit Rating Agency, Ltd. (JCR). For the content and other details of the JCR Green Finance Framework Evaluation, please refer to the following website.
JCR Green Finance Framework Evaluation
SMBC Environmental Assessment Loan
NAF has received an “A” rating for the SMBC Environmental Assessment Loan from Sumitomo Mitsui Banking Corporation, as it was deemed that NAF is at a high level in terms of “understanding environmental impact,” “environmental business,” and the “status of efforts for environmental conservation measures.”
