MOL Announces Issuance of Publicly Offered Hybrid Corporate Bonds

March 17, 2021

TOKYO-Mitsui O.S.K. Lines, Ltd. (MOL; President & CEO: Junichiro Ikeda) today announced the submission of an amended version of the shelf registration statement regarding the issuance of publicly offered hybrid corporate bonds (no collateral and subordinated corporate bonds) to the Director-General of the Kanto Local Finance Bureau.

1. Purpose and background of the hybrid bond issue

MOL has established the management plan that is updated every year (called the "Rolling Plan") since fiscal year 2017. The management plans reflect the company's actions to set out the group's corporate vision and medium-to-long-term management direction under the ever-changing external environment, and develop business strategies based on those actions. Since the initial year, the plans have encompassed choice and focus of areas for resource allocation to improve the company's financial standing and reform its business portfolio. The company is considering fund procurement with hybrid bonds as a part of efforts to enhance its earnings base to achieve a swift recovery to a growth trajectory and strengthen its financial base to support stable growth.
Meanwhile, MOL plans to apply the funds procured through the hybrid bonds to a partial fund repayment before the maturity of the hybrid loan (*).

2. Characteristics of the hybrid bonds

The hybrid bonds have characteristics of both equity and debt. Because they are debt instruments, there is no equity dilution, whereas they are similar to equity in features and characteristics, such as an option to defer interest payments, extremely long-term redemption periods, and subordination in liquidation or bankruptcy proceedings. Therefore, MOL expects that 50% of the amount to be financed will be regarded as capital by the rating agency Japan Credit Rating Agency, Ltd.
For more information, please refer to the amended shelf-registration statement submitted to Director-General of the Kanto Local Finance Bureau as of today.

3. Future schedule

MOL has appointed Nomura Securities Co., Ltd. as the bookrunner and lead manager of the Hybrid Bonds, and Daiwa Securities Co. Ltd., Mizuho Securities Co., Ltd., and SMBC Nikko Securities Inc. as the joint lead managers, and will determine the terms and conditions, including the date to determine the interest rate, issuance amount, and interest rate, in comprehensive consideration of demand, market environment, and others. The company will announce these matters as soon as they are determined.

Note: This announcement is prepared solely for purpose of public disclosure regarding the issuance of hybrid corporate bonds (no collateral and subordinated corporate bonds), and does not constitute a solicitation of investments or any similar acts.

(*) Please refer to September 30, 2016 press release:
MOL Enters into Agreement for Fund Procurement through Hybrid Loan