Green Bond Fact Sheet

Nissen Kaiun

Date: 09/07/2019

Issue date: 26-06-2019 Maturity date: 26-06-2029 Tenor: 10
Issuer Name

Nissen Kaiun

Amount Issued

JPY2.8bn/USD26m

Country of riskJapan

CBI Database

Included

Issuer Type1

Loan

Bond TypeGreen loan

Green Bond Framework

N/A

Second party opinion

N/A

Certification Standard

Not certified

Assurance report

N/A

Certification Verifier

N/AGreen bond rating

JCR (Green 1)☐ Energy☐ Solar☐ Onshore wind
☐ Offshore wind
☐ Geothermal☐ Hydro☐ Tidal☐ Biofuels☐ Bioenergy☐ District heating☐ Electricity grid☐ Energy storage☐ Energy performance☐ Infrastructure☐ Industry: components☐ Adaptation & resilience☐ Buildings☐ Certified Buildings☐ HVAC systems☐ Energyperformance☐ Water performance☐ Energy storage/meters☐ Other energy related☐ Industry: components☐ Adaptation & resilience☐ Transport☐ Electric vehicles☐ Low emission
vehicles☐ Bus rapid transit☐ Passenger trains☐ Urban rail

☐ Freight rolling stock☐ Coach / public bus☐ Bicycle infrastructure☐ Energy performance☐ Transport logistics☐ Infrastructure☐ Industry: components☐ Adaptation & resilience☐ Water & wastewater☐ Water distribution☐ Water treatment☐ Wastewatertreatment☐ Water storage☐ Storm water mgmt
☐ Flood protection☐ Desalinisation plants☐ Erosion control☐ Energy performance☐ Infrastructure☐ Industry: components☐ Adaptation & resilience☒ Waste management☐ Recycling☐ Waste prevention☒ Pollution control☐ Landfill, energy capture☐ Energy performance☐ Infrastructure☐ Waste to energy☐ Industry: components☐ Adaptation & resilience

Use of Proceeds☐ Land use & agriculture☐ Afforestation/parks☐ FSC Forestry☐ FSC Cellulose &paper☐ Land remediation☐ Energy/water efficiency☐ Sustainable agriculture☐ Adaptation & resilience☐ Other☐ Adaptation &resilience☐ ICT☐ Industry: process

Issue details
Reporting

The amount withdrawn via the loan will be disclosed in writing to the participating banks at
the same time as the financial statements are submitted, i.e. end of each reporting period(Sumitomo Mitsui Banking Corporation – SMBC – will draw out proceeds in response toNissen Kauin’s request, which allows for tracking and appropriate control).
As for the effects of environmental improvement, the following reporting will be madeavailable in writing to banks participating in the syndication at the same time as reporting
the status of allocation:
Reduction of pollutants per scrubber
Number of scrubbers installed with this loan

Company information

Established in 1889, Nissen Kaiun owns ocean-going vessels on the Hakata island of Imabari
City, Ehime Prefecture, having one of the largest fleets in Japan. Since the 1970s, it hasentered the field of modern vessels, followed by a far-sea route.

Firsts, records andcertificationsFirst green loan from Japan.

Proceeds description

The proceeds will be used to fund the installation of scrubbers, an equipment that removes
sulphur from exhaust gases on ocean vessels. The scrubber to be installed is an open-loopsystem that cleans exhaust gases and particulate matter (PM) containing sulphur oxides(SOx) emitted from the engine using seawater and discharges the seawater into the sea,
and a hybrid scrubber system that can be switched to a closed-loop system.

Also, the first green product to exclusively finance waste projects in Japan in 2019.

Whilst there is an increase in CO2 emissions due to the power consumption of scrubbers, it
can be handled by existing generators of ships, such that the addition of power generators
is not required. Therefore, there is no significant increase in CO2 emissions due toincreased power consumption.

Climate Bonds view

Shipping is still a highly polluting industry and requires more investments such as this one
to make it cleaner. The number of green financial products issued for maritime projects has
been low and needs to increase significantly, for which regulation will be a key driving force(as this green loan shows). In this case, the establishment of scrubbers is one of themeasures for complying with IMO regulations that will become mandatory beginning in2020.
In addition, there are several other green financial instruments apart from bonds that can
support the transition to a greener world. Green loans are an important one, and we are
happy that the Japanese market has finally added one to its mix. Hopefully more Japaneselenders will push for growth in the green loan market, and more companies will turntowards it.

Underwriters
Deal comments

Credit Rating
Pricing summary
Investors summary

1

Sumitomo Mitsui Banking Corporation (syndicate arranger)

Issuer categories: ABS, development bank, financial corporate, government-backed entity, loan, local government, non-financial
corporate, sovereign