Japanese insurers flock to Tokyo’s first green bonds

Dai-ichi Life and Nippon Life are among the investors in the $88m issuance, which will fund environmental projects in the capital.

The Tokyo Metropolitan Government has raised 10 billion yen ($88 million; €75 million) from its debut issuance of Tokyo Green Bonds to fund smart energy and green projects in the capital of Japan.

Half of the green bonds have a maturity of five years with a 0.02 percent coupon rate, while the remaining half offer a 30-year term with a coupon rate of 0.982 percent. The Metropolis of Tokyo priced the bonds, which are rated A+ by S&P Global Ratings, last Friday and completed the transaction the same morning.

Funds from Tokyo Green Bonds will be allocated to support the development of the “Smart Energy Cities” initiative and other environmental projects led by the metropolitan government.

The bond investors comprise banks, asset managers, corporations and institutions. AEON Bank, Aflac Japan, Johnan Shinkin Bank, Mizuho Bank, Shinkin Central Bank, to name a few, are among the bond investors. Sumitomo Mitsui Banking Corporation, and its trust asset management and trust bank affiliates also invested in Tokyo Green Bonds.

Five life insurance companies – Daido Life, Fukoku Mutual Life, Nippon Life, Sumitomo Life and Dai-ichi Life – as well as Meiji Yasuda Asset Management Company and Tokyo TY Financial Group also supported the bond issuance.

Nippon Life said the investment is part of its 200 billion-yen commitment target for ESG bonds under a 1.5 trillion-yen investment plan in “growth fields” for the next three years. It also noted this marks the first Japanese issuance of green bonds with a super-long maturity of more than 10 years.