On February 13, 2006, Akita Bank, a regional bank in northern Japan, started "Eco-Private Placement," giving relaxed eligibility conditions for financing to small- and medium-sized enterprises (SMEs) that are recognized as promoters of environment-friendly activities. Akita Bank is the first bank to introduce this kind of environment-oriented service in the region.

With an 'Eco-Bond' a company will be able to raise capital at a lower cost, a 0.2 percent discount on the guarantee rate compared to regular bank-backed private placements. As big corporations have been putting more focus in recent years on how their suppliers are undertaking eco-friendly activities like recycling or energy saving, the bonds could help smaller local companies to fund their environmental activities and keep up with trends in industry.

Businesses certified or awarded by the government or municipal offices for their environment-conscious management are eligible to issue the bonds. Another requirement is to be financially sound with net assets of more than 300 million yen (about U.S.$2.56 million) just as is the case with regular bank-guaranteed private placements,, although collateral is not part of the requirements.

The bank aims to contribute to environmental activities in the community through continued efforts to develop ways of helping companies raise capital.



Posted: 2006/06/24 04:04:51 PM
Japanese version

TAG Non-manufacturing industry , System/Law