Issue of New Units

MAF may flexibly issue additional units with the objective of financing acquisition of assets, renovation and other capital requirements for operation, or to repay debt, including lease deposits, security deposits, loans and bonds that MAF may have issued.

Debt Financing

MAF may issue bonds or take on loans, including call market funding, with the objective of financing acquisition of assets; renovation expenses; dividend payments; working capital; or debt repayment, including lease deposits, security deposits, loans and bonds that MAF may have issued. MAF only borrows capital from qualified institutional investors as defined by Article 2-3-1 of the Securities and Exchange Law of Japan. In addition, MAF may not take on loans or issue bonds that exceed ¥1 trillion, respectively, nor may the total of loans and bonds exceed ¥1 trillion. According to MAF’s current Articles of Incorporation, MAF may use its assets under management as collateral for loans and bonds.

Loan-to-Value Ratio

The ratio of total loans and bonds outstanding to MAF’s total assets is known as the loan-to-value (LTV) ratio. The REIT Management Company determines the upper limit of its LTV ratio as part of its mid-to-long-term asset management plans and its yearly management plans. The upper limit for MAF’s LTV ratio is currently set at 60 percent, although issues including the acquisition of assets may cause the LTV ratio to temporarily exceed 60 percent.

Derivatives

According to MAF’s current Articles of Incorporation, MAF limits transactions involving financial derivatives to those with the objective of hedging risks including the risk of change in the interest rates associated with debts.