DEAL: world's first social impact samurai bond

Author: Brian Yap | Published: 5 Jul 2017

BPCE’s JPY58.1 billion ($500 million) quadruple-tranche senior-preferred (SP) offering to Japanese institutional investors has successfully launched, with specific disclosure needed for the unique use of proceeds.

The June 23 transaction, from France’s second largest bank, marks the first time any financial institution has issued a yen-denominated social-impact bond, and the second senior preferred issuance by the Paris-based lender.

But due to the deal’s unique structure, with the proceeds going towards financing the issuer’s clients rather than projects, the country’s Financial Services Agency (FSA) imposed a standalone disclosure requirement.

"We had a specific use of proceeds section [in the prospectus] to inform the investors of details on how the proceeds are used," said Ryu Umezu, partner at Anderson Mori & Tomotsune in Tokyo. The proceeds for other types of samurai bonds has traditionally been earmarked for general corporate financing purposes, and is therefore much simpler.



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