Make The World
More Sustainable[Provisional Translation Only]
This English translation of the original Japanese document is provided solely for information purposes.
Should there be any discrepancies between this translation and the Japanese original, the latter shall prevail.

November 13, 2023
IssuerIchigo Office REIT Investment Corporation (“Ichigo Office,” 8975)
1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo
Representative: Keisuke Chiba, Executive Director
www.ichigo-office.co.jp/en
Asset Management Company
Ichigo Investment Advisors Co., Ltd.
Representative: Hiroshi Iwai, President
Inquiries: Yuji Kamo, Head of Ichigo OfficeTel: +81-3-3502-4891

Bond Issuance to Ichigo
First Callable Unsecured Investment Corporation Bond(Subordinated and Limited to Qualified Institutional Investors)
Ichigo Office today decided to issue JPY 350 million of callable bonds (subordinatedand limited to qualified institutional investors) (the “Investment Corporation Bonds”) to
its sponsor, Ichigo, in order to finance the deployment of value-add capex to drive thevalue of its portfolio focused on mid-sized offices.
1. Bond Details
NameAllottee
Total Issue AmountForm of Bond Certificate
Bond Denomination AmountIssue Price
Redemption Price
Offering Method
Subscription Period
Payment Date
Redemption Date and Method(Including Early Redemption)

Ichigo Office First Callable Unsecured Investment
Corporation Bond (subordinated and limited toqualified institutional investors)
Ichigo Inc. (“Ichigo”)
JPY 350 million
Pursuant to the Act on Book-Entry Transfer ofCorporate Bonds and Shares, bond certificates will
not be issued.
JPY 350 million
Par (JPY 100)
Par (JPY 100)
Private placement limited to qualified institutional
investors
November 13, 2023
November 20, 2023Lump sum redemption on November 20, 2033.
The principal may be redeemed in whole or in part
before maturity at par (JPY 100) after November
21, 2028. If Ichigo Office decides on an early
redemption, Ichigo Office must notify bondholders

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the issuance of the Ichigo Office First
Callable Unsecured Investment Corporation Bonds (subordinated and limited to qualified institutional investors), and is not an offer to sell or asolicitation of any offer to buy the securities of Ichigo Office.

1Interest Rate
Interest Payment Date

Subordination Agreement

the amount and the redemption date 10 businessdays prior to the early redemption date. TheInvestment Corporation Bonds may be purchasedand cancelled at any time on and after the day
following the payment date unless otherwise
stipulated by the depository. In the event theredemption date (or early redemption date) is not abusiness day, payment shall be made on the priorbusiness day. Details on redemption are in“Subordination Agreement” below.
1.0% (fixed rate)
May 20 and November 20 every year (the firstinterest payment date will be May 20, 2024). If aninterest payment date is not a business day,payment shall be made on the previous businessday. The interest payment is calculated on a 365day basis for each calculation period (the period
starting on the payment date and ending on the firstinterest payment date, or the subsequent periods
starting on subsequent interest payment dates andending on the following interest payment date,where the first day of each period is not included in
the interest calculation). Interest payments arerounded to the nearest whole number. Interest
payments are made pursuant to the Subordination
Agreement below, and there are no stipulations
regarding accumulated interest.
While Ichigo Office has senior debt obligations to
its bondholders pursuant to its financing
agreements with SMBC and other financial
institutions (“creditors”) and its individual loan
agreements with its creditors entered in line withthese financing agreements, and the requirements(collectively referred to as “Senior DebtDocuments”) of Ichigo Office’s debt obligations to
its creditors and bonds issued by Ichigo Office(excluding (1) the Investment Corporation Bonds;(2) bonds with terms and conditions that are thesame as or have lower priority than the Investment
Corporation Bonds; and (3) Investment
Corporation Bonds that are or are stipulated ashaving lower priority than the Investment
Corporation Bonds), the principal, interest, andother payments relating to the Investment
Corporation Bonds will have lower priority thansenior debt, and will be made on the condition thatsenior debt that has reached maturity (including
senior debt that is immediately due and payable)
has been paid in full and when such condition has
been met. Furthermore, while Ichigo Office hassenior debt obligations, excluding senior debt thatis immediately due and payable, if Ichigo Officelacks the funds to repay its subordinated debt that

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the issuance of Ichigo Office First
Callable Unsecured Investment Corporation Bonds (subordinated and limited to qualified institutional investors), and is not an offer to sell or asolicitation of any offer to buy the securities of Ichigo Office.

2

Transfer Restrictions

Financial Covenants
Collateral
Credit Rating
Bond Administrator
Fiscal, Issuing, and Paying Agent
Underwriters
1

has reached maturity pursuant to the Senior Debt
Documents, the deficit may be deferred until
Ichigo Office has raised enough funds, and thedeferral does not constitute a default on Ichigo
Office’s subordinated debt or a reason for theInvestment Corporation Bonds to become
immediately due and payable.
In the event of an Ichigo Office liquidation or
rehabilitation, Investment Corporation Bonds willbe treated as subordinated bankruptcy claims or
subordinated rehabilitation claims. If proceedings
related to liquidation under Japanese law, orliquidation, bankruptcy, or rehabilitation pursuant
to laws outside of Japan arise and are ongoing,
neither interest nor principal payment will be madeuntil senior claims have been repaid in full.
Sales of the Investment Corporation Bonds require
the approval of Ichigo Office, and can only be soldto qualified institutional investors as defined in
Article 10, Clause 1 of the Cabinet Office
Ordinance Relating to Definitions Prescribed in
Article 2 of the Financial Instruments andExchange Law.1
None
The bonds are not secured by any collateral nor
guaranteed, and no assets have been reserved ascollateral for the Investment Corporation Bonds.
None
None
SMBC
SMBC Nikko Securities

Ichigo, the allottee, has consented not to transfer the Investment Corporation Bonds
without prior consent of Ichigo Office.

2. Reason for Bond Issuance
Ichigo Office continues to execute on its strategy to build a portfolio focused on midsize offices, an asset class that offers both return stability and upside potential, anddrives shareholder value via value-add and thorough asset management.
Ichigo Office is targeting long-term total returns of greater than 8%, and believes thatgrowing asset value and NAV per share via the proactive deployment of value-add
capex is essential to achieve this target. 1
Although Ichigo Office has historically kept capex below depreciation for each fiscal
period, Ichigo Office has decided to proactively deploy value-add capex for select assets
to differentiate its mid-size office portfolio while continuing to deploy capex necessary
for building maintenance purposes. As a result, total capex (capex for maintenancepurposes and value-add capex) will significantly exceed depreciation from the current
April 2024 fiscal period.
After reviewing its financing options for the value-add capex in light of current liquidity
Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the issuance of Ichigo Office First
Callable Unsecured Investment Corporation Bonds (subordinated and limited to qualified institutional investors), and is not an offer to sell or asolicitation of any offer to buy the securities of Ichigo Office.

3and LTV, Ichigo Office decided to issue Investment Corporation Bonds to Ichigo as theallottee.
Ichigo Office believes the bond issuance will drive the earnings potential of its mid-size
office portfolio, asset value, and NAV per share.
On the other hand, Ichigo is strengthening its commitment to Ichigo Office’s growth asa sponsor and alignment with shareholder value creation, and will record gains on saleon assets sold to Ichigo Office. 2Ichigo Office will continue to execute on organic growth and acquisition-driven growthstrategies, as well as financial strategy, to maximize shareholder value.
1

Total Returns: Returns (Re-invested Dividends and Capital Gains) divided byInvestment Amount (Share Price)2
Ichigo currently owns 107,040 Ichigo Office shares (7.07% of shares outstanding).
3. Characteristics and Benefits of Bond Issuance
The Investment Corporation Bonds have characteristics of both equity and debt.
Although they are legally considered debt and do not cause share dilution, in the eventof bankruptcy or rehabilitation, they are treated as subordinated bankruptcy claims orsubordinated rehabilitation claims. Furthermore, if proceedings related to liquidation
under Japanese law, or liquidation, bankruptcy, or rehabilitation pursuant to laws
outside of Japan arise and are ongoing, the Investment Corporation Bonds aresubordinated to other general claims pursuant to the Subordination Agreement and thus
have characteristics of equity capital. The Investment Corporation Bond Issuance allows
Ichigo Office to effectively strengthen its equity base while avoiding any dilution of net
asset value per share.
4. Rationale of Bond Issuance Terms
Ichigo Office is issuing the Investment Corporation Bonds to its sponsor, Ichigo, todrive the earnings potential of its mid-sized office portfolio, asset value, and NAV pershare.
Because there have been a limited number of Investment Corporation Bonds issued byinvestment corporations in Japan, Ichigo Office conducted a multi-faceted analysis todetermine issuance terms including setting an interest rate based on information
provided by financial institutions, interest rate spreads of existing subordinatedinvestment corporation bonds, and interest rate spreads of other bonds issued by similar
investment corporations, and discussed its analysis with Ichigo. Ichigo agreed to theabove terms and conditions after reviewing the appropriateness of the terms andconditions of the Investment Corporation Bonds in light of its ongoing sponsor support.
5. Allottee Details(1) Allottee Overview
Company NameIchigo Inc.

Address

1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo

Representative

Scott Callon, Chairman
Takuma Hasegawa, President

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the issuance of Ichigo Office First
Callable Unsecured Investment Corporation Bonds (subordinated and limited to qualified institutional investors), and is not an offer to sell or asolicitation of any offer to buy the securities of Ichigo Office.

4

Capital

JPY 26.888 billion

Establishment Date

March 17, 2000

Major Shareholder

Ichigo Trust Pte. Ltd.

Principal Businesses

Asset Management, Sustainable Real Estate, Clean Energy

Relationship withIchigo Office or IIA

Parent company of Ichigo Investment Advisors (“IIA”), theasset management company(2) Allottee Selection Rationale
Ichigo Office is issuing the Investment Corporation Bonds to finance the deployment ofvalue-add capex to further drive portfolio growth. Towards this end, the selection of its
sponsor, Ichigo, as allottee demonstrates Ichigo’s unwavering commitment and support
for Ichigo Office.
Ichigo currently owns 107,040 Ichigo Office shares (7.07% of shares outstanding), andis the parent company of IIA, Ichigo Office’s asset management company.
(3) Related-Party Transactions
Transactions with the allottee, Ichigo, are related-party transactions as defined under theInvestment Trust and Investment Corporation Law (Act No. 198 of 1951, including
subsequent revisions). Pursuant to its rules on related-party transactions, IIA’s Risk
Compliance Committee and Asset Management Committee reviewed and approved theterms and conditions of the Investment Corporation Bond issuance. Ichigo Office also
received approval from its Board of Directors.
6. Total Amount to be Raised and Use and Timing of Proceeds(1) Amount of Estimated Net Proceeds
JPY 342 million(2) Use of Proceeds and Scheduled Expenditure Date
The proceeds will first be retained as cash-on-hand, and then deployed towards valueadd capex as necessary.
7. Other(1) Equity Treatment of Investment Corporation Bonds
The Investment Corporation Bonds are a form of hybrid financing that has
characteristics of both equity and debt.
(2) Investment Risks
Risks related to this bond issuance include the “Investment Risks” described in thelatest Financial Report submitted on July 26, 2023, as well as the following risks for
Ichigo Office shareholders and holders of the Investment Corporation Bonds.
-The interest rate for the Investment Corporation Bonds has been set relatively highto appropriately reflect the subordinated priority of repayment compared to seniordebt. Because Ichigo Office’s shareholder dividends are paid from profits afterDisclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the issuance of Ichigo Office First
Callable Unsecured Investment Corporation Bonds (subordinated and limited to qualified institutional investors), and is not an offer to sell or asolicitation of any offer to buy the securities of Ichigo Office.

5

interest payments have been made to the holders of the Investment CorporationBonds, dividends may be lower than dividends under a loan without a subordinationagreement or a typical bond issuance.
-If an event triggering the prioritization of Ichigo Office’s debt occurs, theInvestment Corporation Bonds have lower priority than senior debt for interest andprincipal repayment, but have higher priority than shareholders for claims toresidual assets because the bonds are characterized as debt. As such, depending on
bond issuance terms, Ichigo Office’s shareholder rights and share price may benegatively impacted.

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the issuance of Ichigo Office First
Callable Unsecured Investment Corporation Bonds (subordinated and limited to qualified institutional investors), and is not an offer to sell or asolicitation of any offer to buy the securities of Ichigo Office.

6

Reference
Outstanding Loan and Bond Balance(JPY million)
BeforeBond Issuance
(A)

After
Bond Issuance(B)

Short-term bank loans–––

Long-term bank loans

108,007108,007–

Total bank loans

108,007108,007–

6,900

6,900––

350+350

6,900

7,250+350

114,907

115,257+350

Bonds
Subordinated Bonds
Total bonds
Total bank loans and bonds

Change(B) - (A)Distribution of Loan and Bond Maturities■ Bank Loans (floating rate)■ Bank Loans (fixed rate)■ Bonds■ Subordinated Bonds

11,6451,200

9,763 9,682

9,812

8,908

8,846

1,000

1,000

7,346

9,347
8,267

1,200

1,000
5,494
7,953

4,192

2,900

4,899

10,445
8,763

7,246

5,330

5,476

1,500

8,147

6,346

2,000900
Apr2024

Apr2025

Oct2025

Apr20261,300

1,700Oct
2031

Apr
2032

Oct
2032

350

955

600
Oct
2024

3,830

Oct
2026

Apr2027

Oct
2027

Apr
2028

Oct
2028

Apr2029

Oct
2029

Apr2030

Oct
2030

Apr
2031

Apr2033

Oct2033

Apr2034

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the issuance of Ichigo Office First
Callable Unsecured Investment Corporation Bonds (subordinated and limited to qualified institutional investors), and is not an offer to sell or asolicitation of any offer to buy the securities of Ichigo Office.

7