NYK to Issue Green Bonds

April 17, 2018

NYK will publicly offer Green Bonds (Unsecured Corporate Bonds No.40) within the Japanese domestic market in May, becoming the world’s first company to issue labelled Green Bonds in global shipping business sector.

A green bond is one in which the proceeds are used solely for the purpose of funding environment-friendly projects. NYK’s new medium-term management plan “Staying Ahead 2022 with Digitalization and Green” positions the company to integrate environmental, social, and governance (ESG) principles into management strategies to contribute to the sustainable development of society and enrichment of the company’s corporate value.

NYK plans to use the net proceeds of the Green Bonds to expand the company’s resources for the procurement of funds, as well as keep a wide range of stakeholders involved in the company’s proactive approach to environmental investment.

- Summary of Green Bonds
Issuer NYK
Maturity 5 years
Issue Amount 10 billion yen
Closing Date May 2018 (current schedule)
Use of Proceeds Investment toward mainly new but including existing (refinancing) projects indicated in NYK’s “Roadmap for Environmentally Friendly Vessel Technologies,”* such as (1) LNG-fueled ships, (2) LNG bunkering vessels, (3) ballast water treatment equipment, and (4) SOx (sulfur oxides) scrubber systems, etc.. See below for more details on these projects.
Lead managers Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., Nomura Securities Co., Ltd.
Green Bond Structuring Agent (one who supports the issuance of green bonds through formulation of a Green Bond Framework and advices on acquiring second opinions) Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.,

- NYK will receive a Second-Party Opinion from Vigeo Eiris, one of the world's leading ESG evaluation institutions based in France, for ensuring eligibility and transparency of the Green Bonds and attracting for investors.

- NYK's Green Bonds have been given the approval as "a model case for the Green Bonds issuance in fiscal year 2018" by Ministry of the Environment, Government of Japan (MOEJ), for the first Japanese industrial corporation. NYK is now under verification process by MOEJ and its contractors and will announce when it is confirmed.
MOEJ’s website: Green Bond Guidelines, 2017

- NYK will participate in a shipping industry working group to be established by the Climate Bonds Initiative and will cooperate in formulating evaluation criteria for Green Bonds issued by shipping companies. The Climate Bonds Initiative is an international, investor-focused not-for-profit working to mobilize bond markets for climate change solutions. It also provides a journal of record for relevant bond issuance, develops Green Bond evaluation criteria such as the Climate Bonds Standard, and provides policy proposals to government, finance, and industry sectors. Website: https://www.climatebonds.net/

* Roadmap for Environmentally Friendly Vessel Technologies

(1) LNG-fueled ship
A vessel powered by liquefied natural gas (LNG) as fuel. Compared to conventional heavy oil, LNG fuel emits 30 percent less carbon dioxide (CO2), almost no sulphur oxides (SOx) or particulate matter (PM), and up to 80 percent less nitrogen oxides (NOx).
Announcement on September 30, 2016, about the delivery of the world’s first LNG-fueled pure car and truck carrier (PCTC), http://www.nyk.com/english/release/4208/004443.html

(2) LNG bunkering vessel
A vessel that provides LNG to LNG-fueled ships.
Announcement on February 15, 2017, about the delivery of the world’s first purpose-built LNG bunkering vessel, http://www.nyk.com/english/release/4735/004784.html

(3) Ballast water treatment equipment
Ships use ballast water to provide stability during a voyage. Usually seawater is pumped into the tank when cargo is unloaded, and the seawater then discharged at another port when cargo is loaded. Ballast water treatment equipment treats marine species carried in ships’ ballast water and contributes to preserving biodiversity by preventing the transfer of aquatic organisms that could harm the marine environment.

(4) SOx (sulfur oxides) scrubber system
A system that uses seawater and chemicals to remove sulfur from ship exhaust gases.

This press release has been prepared for the sole purpose of publicly announcing the Company’s issuance of the Bonds, and not for the purpose of soliciting investment or engaging in any other similar activities within or outside Japan.


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