June 14, 2024
Sumitomo Mitsui Banking Corporation
Syndicated Sustainability-Linked Hybrid Loan for Daiwa House Industry Co., Ltd.
Sumitomo Mitsui Banking Corporation (President and CEO: Akihiro Fukutome, hereinafter "SMBC") has
signed an agreement of the first sustainability-linked hybrid loan (hereinafter the "Loan") in Japan, which
combines sustainability-linked loan and hybrid finance with Daiwa House Industry Co., Ltd. (President andCEO: Keiichi Yoshii, hereinafter "Daiwa House Industry"). The loan is based on the "Sustainability-Linked
Finance Framework" (hereinafter the "Framework") that has been formulated by Daiwa House Industry.
The objective of sustainability-linked loans is to promote and support environmentally and socially beneficial
economic activities and growth by linking corporate loan terms with a client’s performance againstsustainability performance targets (hereinafter "SPTs") consistent with a client’s sustainability strategy. In
addition, the Loan is a form of subordinated hybrid financing with an intermediate nature between equity anddebt, and Daiwa House Industry anticipates receiving equity certification on 50% of the capital procurement
amount from Rating and Investment Information Inc. (R&I) and from Japan Credit Rating Agency, Ltd. (JCR).
SMBC has been appointed by Daiwa House Industry as the Lead Arranger, Bookrunner and Agent to structure
the loan.
Daiwa House Industry is engaged in a wide range of real estate-related businesses, including thedevelopment, management, operation and sale of rental real estate, and condominiums, as well as construction
contracts for housing, commercial facilities and logistics facilities that make use of prefabricated construction
technology. Additionally, it advances initiatives such as renewable energy power generation projects.
Daiwa House Industry aims to realize a sustainable society in its long-term environmental vision "Challenge
ZERO 2055" formulated in fiscal 2016 and has set seven targets of particular importance defined as "ChallengeZero" in order to accelerate its initiatives with specific milestones for 2030. In the loan, items that contributeto the realization of a decarbonized society have been selected from these targets, and the following SPTs areset as important indicators to measure the progress of reducing greenhouse gas emissions during the use ofbuildings provided in addition to the company's business activities, and as an incentive to achieve them, theborrower is obliged to donate to an organization for the purpose of environmental conservation activities orpurchase emission credits, according to the degree of achievement of the SPTs.
[Overview of the loan]
Date of agreement

June 14, 2024

Drawdown date

September 25, 2024

Loan amount40 billion yen

Maturity date

September 25, 2059
However, on each interest payment date after September 25, 2029, all orpart of the principal can be prepaid.

Lead Arranger

Sumitomo Mitsui Banking Corporation

Joint Arranger

MUFG Bank
Mizuho BankLenders

Syndicate Group organized by lead arranger and joint arrangers
1SPT-1:
Reduction of greenhouse gas emissions (Scope 1+2) in businessactivities by 59% in FY2027 (compared to FY2015)
SPTs
SPT-2:
Reduction of greenhouse gas emissions (Scope 3, Category 11) incommunity planning by 56% in FY2027 (compared to FY2015)
The framework has received a second party opinion from Rating and Investment Information Inc. (R&I) forits alignment with the “Sustainability-Linked Loan Principles” (2023) published by Loan Market Association(LMA), Loan Syndications and Trading Association (LSTA) and Asia Pacific Loan Market Association(APLMA), and “Green Loan and Sustainability-Linked Loan Guidelines” (2022) published by the Ministry ofthe Environment.
SMBC will further contribute to achieving sustainable society by providing solutions and engaging in dialogue
for our clients’ sustainable management.
(Reference)
Daiwa House Industry Co., Ltd. website:
https://www.daiwahouse.com/English/"Second Opinion" by Rating and Investment Information Inc. (R&I):
https://www.r-i.co.jp/rating/esg/sustainabilityfinance/index.html【Contact Information】
Sustainable Solution Department
TEL：03-4333-6967
This announcement is not intended as recommendation to invest or solicit.

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