Tokyo Gas issues decarbonized hybrid bonds up to 20 billion yen
Funds will be allocated to the production of city gas with virtually zero CO2 emissions, etc.
Tokyo Gas announced on the 24th that it will issue hybrid corporate bonds (subordinated bonds) whose use of proceeds will be limited to reducing carbon dioxide (CO2) emissions. Subordinated bonds have properties intermediate between equity and debt, and a portion of the issue amount is considered equity capital. It will be issued in December and will raise up to 20 billion yen. Allocate funds to the decarbonization of city gas and the introduction of renewable energy.
Other companies have issued transition bonds to raise funds for decarbonization efforts, but Tokyo Gas is the first in Japan to issue subordinated bonds. Lead underwriters include Mizuho Securities, Mitsubishi UFJ Morgan Stanley Securities, and Daiwa Securities. The term is 60 years.
The funds raised will be used for the development of manufacturing facilities to produce hydrogen at low cost, "methanation" that mixes hydrogen and CO2 to create a raw material for city gas, and the development of onshore wind power and biomass power generation. Since methanation uses CO2 during manufacturing, it is considered to have virtually zero environmental impact by offsetting it from use. East Gas will operate a methanation facility in the United States with Mitsubishi Corporation and others from 2029.
On the same day, Tokyo Gas also announced that it would raise up to 50 billion yen in hybrid loans (loans with subordinated clauses) around December. Together with the subordinated bonds issued at the same time, we will invest in projects aimed at decarbonization. S&P Global, a major US credit rating company, plans to evaluate hybrid corporate bonds and loans as "intermediate equity", which considers half of the issue amount as equity for the time being after issuance.
