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MHI Sets Terms and Conditions of Second Series MHI Green Bond Issuance
-- With Eye on Strengthening Businesses in Energy Transition Solutions to Realize a Carbon Neutral World by 2050 --

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・ Issuance aimed at raising funds in Japan to support operations in renewable and clean energies
・ Move will accelerate Energy Transition projects, toward achieving carbon neutrality by 2050

Tokyo, August 26, 2021 – Mitsubishi Heavy Industries, Ltd. (MHI) has set the terms and conditions for its new corporate green bond to be issued in the Japanese market, as announced in the Company’s press release of August 2. This will be MHI’s second issuance of this kind, and it marks the first time that a member of Japan’s manufacturing industry sector has issued a corporate green bond in the domestic market in two consecutive years.

The funds procured through issuance of the “MHI Green Bond” last year were allocated in full toward the Company’s business in renewable energy (partial refinancing of outlays relating to offshore wind power systems). Plans call for the capital raised from "2nd Series MHI Green Bond" issuance to be allocated not only to the renewable energy business (wind power systems and business), but also to the clean energy business (hydrogen power systems and business).

MHI is currently taking steps to achieve the energy transition that will enable realization of a carbon-neutral society. As a short-term initiative, the Company is pursuing decarbonization of existing infrastructure, aiming to demonstrate carbon-free power generation fired by hydrogen and ammonia, together with successive product development, by 2025. Over the longer term, MHI is targeting achievement of a hydrogen ecosystem, encompassing all aspects from production to transport, storage and utilization; the necessary decarbonization technology is expected to be established by fiscal 2025. Today, various hydrogen production technologies are being developed and proposed, including blue hydrogen, turquoise hydrogen and green hydrogen; MHI intends to allocate the funds raised from "2nd Series MHI Green Bond" to investments relating to green hydrogen production.

MHI views Green Finance such as this Green Bond and Transition Finance not only as methods of financing, but also as precious opportunities to engage in dialogue with its investors and society at large. Going forward, as it continues such dialogue further, the Company looks to enhance its corporate value through expansion of its energy transition businesses and utilizing financing arrangements appropriate to these areas.

1. Objectives and Background

MHI will issue the new green bond to support businesses involving renewable and clean energies, with two overarching objectives: to further strengthen its initiatives toward realizing a decarbonized society through dialogue with the capital markets, and to enhance awareness toward its initiatives in this respect among a wide spectrum of stakeholders.

2. Outline of the Issuance

Bond name Mitsubishi Heavy Industries, Ltd. 38th Unsecured Corporate Bond
(with Inter-bond Pari Passu Clause) (2nd Series MHI Green Bond)
Maturity 5 years
Issuance amount 15 billion JPY
Interest rate 0.09%
Date of issue September 1, 2021
Redemption date September 1, 2026
Use of proceeds New or existing businesses or projects relating to renewable or clean energies
(wind, geothermal and hydrogen power systems)
Acquired rating AA- (Japan Credit Rating Agency, Ltd.: JCR)
Lead-managing underwriters Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.; SMBC Nikko Securities Inc.; Mizuho Securities Co., Ltd.; Daiwa Securities Co., Ltd.; Nomura Securities Co., Ltd.; BofA Securities Japan Co., Ltd.
Evaluation of the green bond’s suitability With respect to evaluation of the green bond’s suitability, the Company has received a second party opinion (SPO) from Sustainalytics, a third-party institution, attesting to the bond’s conformity with ICMA’s “Green Bond Principles 2021” and the “Green Bond Guidelines” (2020 edition) issued by the Japanese Ministry of the Environment.

Tags: Green bond,SDGs,decarbonized