Japan’s NYK Line has raised ¥20bn ($183m) via sales of “transitional bonds” to develop low-emission shipping in the decades to come.
The shipping conglomerate said in a statement on Friday that it has become the first company to issue such bonds as defined by the Japanese government.
Tokyo has laid out its own taxonomy guidelines for bonds whose proceeds are used to promote energy transition after pledging to achieve net-zero greenhouse emissions by 2050.
Earlier this month, NYK issued two tranches of unsecured bonds in the Japanese domestic market based on the guidelines.
Each tranche amounts to ¥10bn. The five-year notes were priced at a coupon rate of 0.26% per annum, while the seven-year notes were at 0.38%.
Tokyo-listed NYK said the money will be used to fund offshore wind support and LNG bunker vessels, as well as ships using hydrogen fuel cells or that are fuelled by ammonia, LNG and LPG. The bonds also fund efficiency improvements and optimisation of vessel operations.
Classification society DNV, which provided an outside opinion on the deal, said the issues will also meet the International Capital Market Association’s Green Bond Principles.
Mitsubishi UFJ Morgan Stanley Securities, Nomura Securities, Goldman Sachs, Mizuho Securities, Nomura Securities and SMBC Nikko Securities were lead managers for the bond sales.
With more investors focusing on environmental, social and governance (ESG) standards, shipping companies across the globe have been increasingly tapped into green and sustainable financing.
CSSC (Hong Kong) Shipping, the leasing arm of state-owned China State Shipbuilding Corp, recently sold $500m green bonds with a rare “blue” notation.
Blue bonds refer to green bonds whose proceeds are used to protect the ocean environment.
NYK has already been issuing green bonds and participated in green and sustainability-linked loans to finance its decarbonisation projects.
The company has been building LNG-fuelled vessels while studying low-emission fuels such as ammonia and hydrogen.
The Carbon Disclosure Project (CDP) has awarded the top "A" rating to NYK in recent years for its environmental reporting standards.
“Through environmentally efficient investment supported by ESG financing, NYK will demonstrate the company’s growth strategies based on ESG initiatives to a wide range of stakeholders,” the CDP said.
