Mitsubishi Materials Corporation

Sustainable Financing

Mitsubishi Materials Corporation (MMC) establishes the Transition-Linked Finance Framework (the framework) to promote our efforts to achieve carbon neutrality.
Transition-Linked Finance is a bond or loan with an unrestricted use of proceeds, in which a Company has developed a long-term strategy to achieve a decarbonized society, sets targets in line with its transition strategy, and may change its financial and/or structural characteristics depending on the degree of achievement of targets.
Based on the framework, we execute the Transition-Linked Bond and Transition-Linked Loan.
We have obtained a second-party opinion from Japan Credit Rating Agency, Ltd. (JCR), which is an independent external institution on the framework’s conformance.

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Background of the Transition-Linked Finance Execution

The Group has set out its GHG emissions reduction targets (Scope 1 + Scope 2) of 47% reduction compared to the fiscal year ended March 2021 level by the fiscal year ending March 2031, excluding GHG emissions from resource recycling efforts. We also aim to achieve carbon neutrality including GHG emissions from resource recycling efforts by the fiscal year ending March 2046. To achieve carbon neutrality by the fiscal year ending March 2046, we have set a target to achieve a 100% renewable energy usage rate for electricity by the fiscal year ending March 2036.
In order to raise the necessary funds to achieve the goals and promote our efforts to achieve carbon neutrality, we has issued the Transition-Linked Bond and has executed Transition-Linked Loan.

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Transition-Linked Bonds

38th unsecured Bonds (limited inter-bond pari passu clause) (Transition-Linked Bonds)

Tenor 5 years
Issue Amount \20 billion
Amount of Each Bonds \100 million
Issue Price \100 per face value of \100
Coupon 0.863% per annum
Pricing Date November 22, 2023
Issue Date November 29, 2023
Maturity Date November 29, 2028
Interest Payment Date 29th each of May and November annually
Credit Rating A- (Japan Credit Rating Agency, Ltd.(JCR))
KPI Renewable energy utilization rate*1
SPT*2 Achieve 30% renewable energy utilization rate by FYE March 2026
Determination date: At the end of August 2026
Lead Managers Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. / Mizuho Securities Co., Ltd. / Nomura Securities Co., Ltd. / Daiwa Securities Co. Ltd.
Structuring Agent Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
Trustee MUFG Bank, Ltd.

39th unsecured Bonds (limited inter-bond pari passu clause) (Transition-Linked Bonds)

Tenor 5 years
Issue Amount \15 billion
Amount of Each Bonds \100 million
Issue Price \100 per face value of \100
Coupon 0.856% per annum
Pricing Date April 18, 2024
Issue Date April 24, 2024
Maturity Date April 24, 2029
Interest Payment Date 24th each of April and October annually
Credit Rating A- (Rating and Investment Information, Inc. (R&I))
KPI Renewable energy utilization rate*1
SPT*2 Achieve 30% renewable energy utilization rate by FYE March 2026
Determination date: At the end of August 2026
Lead Managers Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. / Mizuho Securities Co., Ltd. / Nomura Securities Co., Ltd. / Daiwa Securities Co. Ltd.
Structuring Agent Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
Trustee MUFG Bank, Ltd.
  • *1 Ratio of renewable electricity purchased by MMC (including electricity procured by other companies) divided by total electricity purchased
  • *2 Sustainability Performance Target. Set targets to be achieved with respect to key performance indicators (KPIs)

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Transition-Linked Loan

Loan Amount ¥20 billion
Execution Date February 13, 2024
KPI GHG emission reduction rate for Scope 1 and Scope 2
SPT 47% reduction of Scope 1 and 2 GHG emissions by FYE March 2031
(Base year: FYE March 2021)
(Excluding GHG emissions from resource recycling efforts) *3
Arranger MUFG Bank, Ltd.
Co-arranger Mizuho Bank, Ltd.
Lender MUFG Bank, Ltd. / Mizuho Bank, Ltd. / Development Bank of Japan Inc. / The Norinchukin Bank / The Hachijuni Bank, Ltd. / The Chiba Bank, Ltd. / THE TOHO BANK, LTD.
Structuring Agent Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
Loan Characteristics An interest subsidy of up to 0.2% will be granted by the government if the SPT is achieved
  • *3 Based on the METI's performance-linked interest subsidies program, multiple SPTs have been set over the loan period.

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Reporting

The following table shows the actual performance of the KPIs and the achievement of the SPTs. In addition, for the fiscal year ended March 2024 results, a third-party assurance has been obtained from Sustainability Accounting Co., Ltd.

  FYE March 2021 FYE March 2022 FYE March 2023 FYE March 2024
Percentage of electricity from renewable energy sources 0% 2% 4% 17%
Total GHG emissions in Scope1 and Scope2 935 thousand t-CO2e 949 thousand t-CO2e 902 thousand t-CO2e 887 thousand t-CO2e
GHG emission reduction rate in Scope1 and Scope2
(Base year: FYE March 2021)
-1% 3% 5%

For information on our latest sustainability strategy, please refer to the below.

MMC, MBS, DFF Inc., Trans-Asia Inc., ideaship Inc., KPMGあずさサステナビリティ

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