September 26, 2011
Daiwa Securities Capital Markets Co. Ltd.
Daiwa PI Partners Co. Ltd.
Aozora Bank, Ltd.
Daiwa Securities Group and Aozora Bank Announce M&A Finance Business
Alliance and Establishment of Joint-venture Company
Daiwa Securities Capital Markets Co. Ltd. (President and CEO: Takashi Hibino; Head
Office: Chiyoda-ku, Tokyo) (“Daiwa Securities CM”) and Daiwa PI Partners Co. Ltd.
(President: Hideki Araki; Head Office: Chiyoda-ku, Tokyo) (“Daiwa PIP”), consolidated
subsidiaries of Daiwa Securities Group Inc. and Aozora Bank, Ltd. (President and CEO:Brian F. Prince, Head Office: Tokyo, Chiyoda-ku) (“Aozora Bank”) today announced an M&A
finance business alliance and an agreement to establish a joint-venture company.

1. Purpose of the Alliance
The joint-venture company has been established to provide M&A finance for an
anticipated increase in the number of management buyout-related (MBO) transactions
going forward. This new company brings together Daiwa Securities CM’s corporate client
relationship and its experience and track record as a top-class domestic financial advisor,Daiwa PIP’s expertise in private equity investments, mezzanine finance and fundmanagement, and Aozora’s high-level of expertise in leveraged buyout finance (LBO).
Through the partnership, clients of Daiwa Securities CM will not only be provided withexisting M&A solutions such as debt and equity finance and its services as a tender offer(TOB) agent, but also with one-stop funding solutions such as bridge loans and mezzanine
finance as part of the joint venture company, taking advantage of the high level of expertisein LBO finance provided by Aozora Bank. This will allow the Daiwa Securities Group andAozora Bank to provide wide-ranging and high value-added services for M&A transactions
that require a swift response and expertise.

2. Overview of the Partnership
The joint-venture company is scheduled to be established in October 2011 anddiscussions are progressing with a view to commencing operations around December.
Bridge loans to be provided by the joint venture company will be financed by Daiwa Next
Bank Ltd. and Aozora Bank. Mezzanine finance will be provided through a fund that will beformed with the joint venture company as the operating partner and Daiwa PIP and Aozora
Bank as ordinary partners. The scale of the financing scheme, comprising bridge loans andinvestment in mezzanine finance, will be approximately 20 billion yen for the time being.

Joint-venture Company Overview
Company name:
Address:
Date of establishment:
Total capital:
Capital contribution:

Aozora Daiwa Finance Co., Ltd.
1-9-1 Marunouchi, Chiyoda-ku, Tokyo
October 2011
50 million yen
Daiwa Securities CM 25%; Daiwa PIP 25%;
Aozora Bank 50%
2 representative directors - 1 from both Daiwa
Securities CM and Aozora Bank
2 directors - 1 from both Daiwa PIP and Aozora BankManagement composition:

Financing Scheme Overview

Loan 50%

Loan 50%

Investment

Investment

Aozora Daiwa Finance Co., Ltd.
20,000M
in total
25% capital contribution
respectively

50% capital contribution

Bridge Loan

Investment
andOperation

Aozora Daiwa
Mezzanine 1 Partners

Mezzanine finance

Borrower (acquiring entity）

3. Others
Today’s announcement represents the beginning of ongoing consideration between
Daiwa Securities CM and Aozora Bank on the expansion of their business partnership.
Specifically, Daiwa Securities CM and Aozora Bank are exploring the possibility of joint
financial advisory business, mainly in Asia.
End