at a glance
The Joint Funding Organization for
All Japanese Local Governments
November 2023
Basic Framework of JFM’s Business Operations
Financial Markets
Funding (Bonds)

High credit quasi-sovereign issuer, wholly owned by
Japanese local governments with the capital
contribution from 1,789*1 local governments*2
Operates as a non-profit organization under the JFM

Outstanding Bond Amount:
USD 147.0bn(1)Law with the objective to provide long-term and low-JFM

interest-rate loans exclusively to Japanese localgovernments


JFM has never experienced any default on its loans.

Reserve for Interest Rate
Volatility, etc.

Fund for Lending
Rate Reduction

USD 21.8 bn(1)USD 6.9bn(1)Japanese Local Governments
Japanese local governments include 47 prefectures
and a total of 1,741*1 cities and special wards ofLending(Long-term / Low interest rates)
Outstanding Loan Amount:
USD 174.6 bn(1)Tokyo, government-designated cities, as well astowns and villages.
Revenue sources for the local governments aresecured by the national government.
•(1)
(2)

Figures are as of 31 March 2023
A portion of the earnings from municipally operated racing (horse,bicycle, motorcycle and speedboat).

LGBP - Funding Sources for Local Governments

order to adjust revenue disparities among the local(USD bn) Publicly Offered Bonds(USD bn) Other Private Sectors(USD bn) National Government

governments (Local Allocation Tax system).
•The national government also prepares the(USD bn)

Local Government Borrowing Programme (LGBP)

180

each fiscal year, which specifies the amount of160

local government borrowing as well as funding140

14sources.

120

12In the case of each local government funding,

100

1080

8606framework to monitor fiscal indices for each local

40

4government and implement early correction measures

202

if the local governments with the indices exceeding00•

consent or approval must, in principle, be obtained
from the relevant authorities.
The national government also establishes a legal

the early warning limits or reconstruction limits shallrestore their financial soundness.
Thus, none of the local governments has defaulted.

BIS 0% risk weight for Japanese local governments*3Lending

JFM funds have accounted for around 15-18% of theLGBP since fiscal 2016.
JFM provides loans to almost all local governments.

Loans planned to be made in fiscal 2023 ending 31

March 2024 are amounted to USD 11.5 bn.
Reduction ofInterest Rates

Local Governments

The national government allocates a part ofnational tax revenue to the local governments, inProceeds from
Public Racing(2)Maximum term to maturity of JFM loans is 40 years.

Note: Figures in USD are converted at USD 1 = JPY 133.48 as of 31 March 2023,
unless otherwise noted.

Japan Finance Organization for Municipalities

16.1

(%)

15.6 15.3 15.3

18

15.5 16.0
17.2 17.3

2016 2017 2018 2019 2020 2021 2022 2023
FYAnnual Lending Volume(USD bn)
20
15
105Plan0
2016 2017 2018 2019 2020 2021 2022 2023** As of 31 March 2023. Planned amount; subject to change depending onmarket conditions and other factors.

16

Funding PlanFunding Leading issuer in the Japanese bond market with anaverage annual funding volume of USD 15 bn over thepast five fiscal years.
 Aiming to diversify its funding sources and expand its
investor base – continues to access the international
market through benchmark transactions as well asprivate placements, making use of its MTN Programme.
 In the international market, only non-government
guaranteed bonds will be issued.
 In fiscal 2022, JFM issued a total of USD 2.0 bn worthof international bonds through 2 benchmark
transactions, Private Placements and Uridashi Bonds.

Support Structure(1)

the relevant obligations in full via payment to JFM.

(2)

(4)

USD 12.5 bn
USD 6.5 bn
USD 4.0 bn

USD 2.0 bn(2)USD
1.8 bn(2)USD 2.2 bn
USD 107 mm(2)USD 77 mm(2)USD 1.5 bn
USD 0.6 bn
USD 0.6 bn

USD 1.0 bn(5)Non-Guaranteed Bond Issuance(USD bn)

20

Solid Risk Management JFM maintained USD 21.8 bn of the reserves for

USD 12.5 bn
USD 4.8 bn
USD 4.0 bn

FY2022(achieved)

Planned amount; subject to change depending on lending status,market conditions and other factors.
Includes USD, EUR and AUD denominated bonds, each converted at
the exchange rate at the time of pricing.
Details of issuance such as tenor, issue size and issue market will be
determined as necessary based on the lending status, market
conditions and other factors.
Denominated in JPY only and issued in the domestic market forrefinancing our predecessor’s government guaranteed bonds.
Totals may not add up due to rounding.

(3)

local governments bear all costs necessary to satisfy(1)

Non-Guaranteed Bonds
Domestic Public Offerings
Domestic Private Placements
Overseas Offerings - GMTN
BenchmarkUridashi Bonds
Private Placements
Open Issuance(3)Guaranteed Bonds(4)Long-term Bank Loans Under the JFM Law, if JFM is to be dissolved and its
obligations cannot be satisfied in full with its assets,

FY2023(initial plan)

Type ofFunding Instruments

Non-JPY denominated bonds

JPY denominated bonds

15

interest rate volatility for the purpose of dealing withinterest rate risk resulting from a duration gap between

10lending (7.64 years) and funding (7.42 years).
The duration gap of 0.22 years*1

in the general

Plan

5

account qualifies JFM’s management target of theduration gap below 2 years.

Credit Ratings
 A1 (Moody’s), A+ (S&P)
 The ratings of JFM are the same as those of theJapanese sovereign.
 BIS risk weight*3: 10% for JFM bonds (non-guaranteed)
denominated in JPY
Note: A rating is not a recommendation to buy, sell or hold securities andmay be subject to suspension, reduction or withdrawal at any timeby the assigning rating agencies.
*1: As of 31 March 2023.
*2: Local governments comprise all of the prefectures, cities and special wards ofTokyo, government-designated cities, towns and villages, as well as some local
government associations.
*3: Value for investors in Japan. For overseas bonds, the value is determined byrespective authorities in each country (as of 31 March 2023).

0FY 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Outstanding Non-JPY Public Bonds (non-guaranteed)
Issue Date

Currency

1 Sep 2023
27 Apr 2023
22 Feb 2023
8 Sep 2022
27 Jan 2022
3 Sep 2021
20 Apr 2021
10 Feb 2021
2 Feb 2021
2 Sep 2020
21 May 2020
12 Feb 2020

USD
USD
EUR
EUR
USD
EUR
USD
USD
EUR
USD
USD
EUR

IssueAmount
750 mm
1,000 mm
500 mm
1,250mm
750 mm
1,000 mm
1,250 mm
1,250 mm
500 mm
1,500 mm1,500 mm
500 mmCoupon
(%)
5.125
4.125
3.375
2.375
1.500
0.100
1.125
1.375
0.010
0.625
1.000
0.050

Tenor
3y5y
5y
5y
3y
10y
5y
10y
7y
5y
5y
7y

DISCLAIMER
By reading these materials, you agree to be bound by the following limitations:
No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information, oropinions contained herein. Neither the company nor any of the company’s advisors or representatives shall have any responsibility or liability whatsoever (for negligence or otherwise)
for any loss howsoever arising from any use of these materials or their contents or otherwise arising in connection with these materials. The information set out herein may be subject toupdating, completion, revision, verification and amendment and such information may change materially.
These materials are based on the economic, regulatory, market and other conditions as in effect on the date hereof. It should be understood that subsequent developments may affectthe information contained in these materials, which neither the company nor its advisors or representatives are under an obligation to update, revise or affirm.
Forward-looking statements, including the company’s plans in these materials, are based on information available to the company at the time they were prepared and involve potential
risks and uncertainties. Actual results, therefore, may differ from those described in these materials due to changes in a variety of factors, such as market trends, economic conditions
and regulations. Accordingly, investors are advised to use their own discretion and exercise great caution when making investment decisions.
These materials and the information contained herein do not constitute or form part of any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe forany securities of the company. Securities of the company not registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), may not be offered, sold or delivered
within the United States or to U.S. persons absent registration under or an applicable exemption from the registration requirements of the United States securities laws. These materials
and the information contained herein are being furnished to you solely for your information and may not be reproduced or redistributed to any other person, in whole or in part. In
particular, neither the information contained in these materials nor any copy hereof may be, directly or indirectly, taken or transmitted into or distributed in the United States, Canada,
Australia, Japan, Hong Kong or any other jurisdiction which prohibits the same except in compliance with applicable securities laws. Any failure to comply with this restriction may
constitute a violation of U.S. or other national securities laws. No money, securities or other consideration is being solicited, and, if sent in response to this presentation or theinformation contained herein, will not be accepted.