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Issuance of Green Bonds

Environmental Activity

Issuance of Penta-Ocean Construction Green Bonds (5th Unsecured Corporate Bonds)

On October 14, 2020, Penta-Ocean Construction Co., Ltd. (the Company) issued green bonds, whose proceeds will be used for the payment of construction costs of the multipurpose self-elevating platform equipped with a large crane (hereinafter, the SEP), that is currently under construction.


Notice Regarding Issuance of Green Bonds (5th Unsecured Corporate Bonds) (September 8, 2020)

Notice Regarding Issuance of Publically Offered Bonds (October 14, 2020)

1. Purpose and Background

The Company's group management philosophies are "Affiliating with society", "Creating a nature-rich environment" and "Cherishing a pioneering spirit". In order to realize a sustainable society, we strive to sincerely address issues faced by our customers and society at all times and continue to create environmental value through our business activities. In our new medium-term management plan announced in May 2020, we have set one of our main strategies to practicing ESG-oriented CSR management to become a "genuine global general contractor" with distinctive strengths in port, coastal and waterfront areas and overseas, and are promoting initiatives in each of the above Environment (E), Society (S) and Governance (G) areas. In particular, as an environmental initiative, we launched the Offshore Wind Farm Business Division Group in April to leverage our strengths in marine civil engineering and contribute to promote wider-spread use of offshore wind power generation across Japan, as a front-runner in the offshore wind farm construction field. In December 2018, we constructed "CP-8001", Japan's first multipurpose self-elevating platform with an 800t lifting crane for offshore wind turbine installation.The funds raised through the Issuance will be used for the payment of construction costs of the second SEP equipped with a 1,600t lifting crane, which will be constructed by the Company in collaboration with Kajima Corporation and Yorigami Maritime Construction Co., Ltd.

2. Outline of the Green Bonds

Name

Penta-Ocean Construction Co.,Ltd. 5th Unsecured Corporate Bonds
(Penta-Ocean Construction Green Bonds)

Total Amount

JPY 10 billion

Terms of issue

5 years

Interest rate

0.25%

Issuance date

October 14, 2020

Redemption date October 14, 2025
Usage of funds For the payment of construction costs of the SEP (JPY 10 billion)
Credit ratings Japan Credit Rating Agency, Ltd. (JCR) “A”
Underwriters

Mizuho Securities Co., Ltd., Nomura Securities Co., Ltd.,
SMBC Nikko Securities, Inc.

Green Bond Structuring Agent Mizuho Securities Co., Ltd.

3. Outline of the Green Project

Name

Construction of a multipurpose self-elevating platform
equipped with a 1,600t lifting crane

Investment amount

JPY 18.5 billion (Penta-Ocean Construction portion: Approx. JPY 12 billion)

Time of completion

September 2022 (Operation start: March 2023)(Schedule)

Design and construction

Basic design: GustoMSC B.V. (The Netherlands)
Construction: PaxOcean Engineering Pte. Ltd.(Singapore)

Main Crane: Huisman Equipment BV (The Netherlands)
Operation period

12 years

Operation sites

Japan

Distinctive features
By jacking up the hull, the vessel ensures safe, efficient and highly precise crane operation even in the sea areas with severe metocean conditions, especially in deep waters (Up to 50m). The fully revolving crane with a 1,600t lifting capacity enables installation of 10-12 MW wind turbines and various foundations including monopiles and jackets, etc.
Equipped with the large deck space and sufficient jack-up capacity, the SEP can carry multiple 10-12MW class wind turbines for efficient installation works.
The equipped Dynamic Positioning System (DPS) keeps the hull position with high precision and reduces the positioning time required during jacking up of the SEP vessel.

4. Eligibility as Green Bonds

●Green Bond Framework
The Company will issue and manage green bonds based on the Green Bond Framework, established in accordance with "CBI Climate Bonds Standard v3.0, Marine Renewable Energy Sector Criteria*1", "Green Bonds Principles 2018 edition*2" and "The Green Bond Guidelines 2020 edition*3"


●Second-party Opinion and credit ratings
As the third-party evaluation of Green Bonds, we have received a second-party opinion from the Japan Credit Rating Agency, Ltd. (JCR) under their "JCR Green Bond Ratings*4" that the above framework complies with the "Green Bond Principles 2018 edition" and the "Green Bond Guidelines 2020 edition", and has also received a preliminary assessment of the highest evaluation, "Green 1".
JCR Green Bond evaluation (967KB)


●CBI certification
The Green Bonds were verified through JCR, the accredited verification body of CBI*, for its conformity to "CBI Climate Bonds Standard v3.0, Marine Renewable Sector Criteria" and have been certified by CBI. This is the world's first CBI certification for funding a SEP vessel construction.
Additionally, the acquisition of a third-party evaluation of these bonds is eligible for the Ministry of the Environment's subsidy for reduction measures of CO2 emission in Reiwa 2.
CBI: Climate Bonds Initiative, an international NGO that promotes large-scale investment for a low-carbon economy.

*1

“CBI Climate Bonds Standard v3.0, Marine Renewable Energy Sector Criteria” are criteria for issuing climate bonds, which were established by Climate Bonds Initiative (CBI), an international NGO that promotes large-scale investment for a low-carbon economy.

*2

"Green Bond Principles" are guidelines for the issuance of green bonds, which were formulated by Advisory Council of Green Bonds Principles, a private organization whose secretariat is managed by International Capital Markets Association (ICMA).

*3

"Green Bonds Guidelines 2020 edition" are the guidelines revised and published by the Ministry of the Environment in March 2020, which provide consideration to consistency and general interpretation in accordance with local Japanese standards to be used as a reference when market practitioners consider specific action regarding green bonds issuance while considering the compliance with the Green Bond Principles, in an attempt to further promote the wider domestic use of green bonds.

*4

“JCR Green Bond Evaluation” is an evaluation of the extent to which the funds procured by the issuance of green bonds are allocated to the JCR-defined green projects, and the extent to which management, operation and transparency of the use of the funds procured from the issuance of the green bonds are ensured. The evaluation ranking is in 5 levels, in order from the top, using the rating symbols of Green 1, Green 2, Green 3, Green 4 and Green 5.



(Reference)
List of investors who announced investment in Penta-Ocean Construction Green Bonds

(As of October 14, 2020, in Japanese alphabetical order)

・The Aichi Bank,Ltd.

・Aichichita Agricultural Cooperative

・Asset Management One Co., Ltd.

・ALPS CHUOH SHINKIN BANK

・Ibaraki Prefecture credit federation of agricultural cooperatives

・OTEC CORPORATION

・Okayama Shinkin Bank

・The Kawaguchi Shinkin Bank

・The Kita Osaka Shinkin Bank

・KUWANAMIE SHINKIN BANK

・THE BANK OF SAGA LTD.

・Shigaken Shinyo Nogyo Kyodo Kumiai Rengokai
・Shigakenmin Shinyokumiai ・SHINONOME SHINKIN BANK
・Shiba Shinkin Bank ・Jodo Shu
・Sugamo Shinkin Bank

・Saison Automobile and Fire Insurance Company, Limited

・THE DAIDO FIRE AND MARINE INSURANCE CO., LTD. ・Danyo Shinkumi Bank
・Tokio Marine Asset Management Co., Ltd. ・Tokyo City Shinkin Bank
・The Toa Reinsurance Company, Limited ・NAGANO SHINKIN BANK
・Nasu Shinyoukumiai ・Niigata Shinkin Bank
・Hanno-Shinkin Bank ・JA Fukuoka Shinren
・JA Fukuoka Shinren ・Sumitomo Mitsui Trust Asset Management Co., Ltd.
・The Miyazaki Taiyo Bank, Ltd.  
 

31 in total



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