DBJ's Businesses

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DBJ's Businesses DBJ’s Businesses To resolve the various issues that the economy and society face and become its clients’ most supportive financial institution, DBJ supplies long-term funds and provides risk capital, supports the formation of business and provision of information and takes a host of other approaches to ensure the smooth operation of businesses and projects serving a constructive purpose. In recent years, collaborating with other financial institutions, businesses and investors, we have worked diligently to develop financial and capital markets that allow funds to be raised more efficiently by applying our function as a financial institution with a trifecta of financial products and services—loans, investments and advisory services. Integrated Investment and Loan Services . 32 Investments and Loans . 34 Consulting/Advisory Services . 46 Special Investment Operations . 50 Crisis Response Operations . 52 Initiatives Related to the Great East Japan Earthquake . 55 Regional Revitalization Initiatives . 58 Making Use of Information Functions . 60 AnnualAnnualuaua ReportReporpo t & CSRCSRRR ReportRepoepp rt 20162010116 3131 Integrated Investment and Loan Services DBJ provides seamlessly integrated investment and loan services. We assist clients with their financing needs by taking a position of neutrality and a long-term perspective that extends over all their activities, and by employing leading-edge financial methods. We offer integrated investment and loan solutions that range from senior loans to mezzanine and equity financing. DBJ also provides a host of services (e.g., M&A advisory and CSR support services) that help raise corporate value. In collaboration with its Group companies, DBJ provides finely tuned services to meet individual clients’ needs. DBJ DBJ Green Environmentally Building Debtor-in- Rated Loan Certification Program Possession (DIP) Financing DBJ Enterprise Structured Disaster Financing Resilience Rated Loan Program Syndicated Loans Equity Loans DBJ Visionary Provision of medium- and Hospital long-term financing, as well as Program structured financing and other forms of structured subordinated Mezzanine Financing financing DBJ Employees’ Hybrid Financing Investment Health Management Rated Loan Program Provision of mezzanine and equity financing Interest Rate Subsidy Programs Asset-Based Lending LBOs/MBOs Integrated Investment and Loan Services M&A Advisory Services Consulting/Advisory Services Arrangement of structured Public financing, provision of M&A The Otemachi Asset advisory services, applying DBJ’s Innovation Hub Management industry research function and expertise in environmental and (iHub) technology evaluations DBJ Asia Financial Support Center Support The DBJ Women for Technology Center Entrepreneurs Management Center (DBJ-WEC) Note: DBJ-designated analysis is required for investment and loan services. 32 Annual Report & CSR Report 2016 Consulting/Consulting/ LoansLoans Investment AdvisorAdvisoryy ServiceServicess DBJ provides financing to DBJ provides investment Through its advisory support meet the diverse funding, based on services, DBJ helps clients needs of its clients. a long-term perspective, to become more competitive meet specific needs and invigorate regional and address a host of issues economies. that clients face. DBJ’s Businesses Provides medium- and long-term We provide investment to assist Provides M&A advisory services loans businesses in terms of growth Makes proposals that apply its Offers unique high-value-added strategies, business restructuring, expertise in industry research and fi nancial services (DBJ Environ- international competitiveness and ability to develop new fi nancial mentally Rated Loan Program and infrastructure operations. We pro- technologies vide such funding through mezza- other loans based on evaluations Arranges structured and other nine fi nancing, as well as through and certifi cations) types of fi nancing equity and other funding. Responds to diverse needs by offer- ing non-recourse loans and devel- ops and provides fi nancing offering collateral and structural fl exibility (debtor-in-possession fi nancing, inventory collateral, intellectual property rights as collateral, etc.) Loan Amounts Provided Investment Amounts Provided M&A Advisory and Consulting Agreements (Non-consolidated) (Flow base) (Non-consolidated) (Flow base) (Non-consolidated) (Cumulative) (Billions of yen) (Billions of yen) (Agreements) 4,000 320 400 370 281.4 347 318 3,000 2,805.1 2,861.3 240 300 2,262.7 166.3 2,000 160 200 138.2 1,000 80 100 0 0 0 Year ended Year ended Year ended Year ended Year ended Year ended March 31, March 31, March 31, March 31, 2014 March 31, 2015 March 31, 2016 March 31, 2014 March 31, 2015 March 31, 2016 2014 2015 2016 Note: Figures, including those for corporate Note: Figures, including those for securities, bonds, are on a management money held in trust and other assets accounting basis. (funds), are on a management accounting basis. Annual Report & CSR Report 2016 33 Investments and Loans DBJ provides medium- and long-term loans, meeting a host of client needs. In addition to senior loans—tradi- tional corporate loans—we offer a range of other loans that employ advanced financial methods, such as project financing, non-recourse loans and other types of structured financing, meeting diversified needs for funding. We also work to resolve client issues involving business expansion and support strategies and the formation of financial infrastructure. We achieve these goals by supporting the creation of funds, as well as mezzanine, equity and other financing methods, providing appropriate risk capital based on a long-term perspective. The case study section on pages 72 through 91 introduces DBJ’s “CSR through Investment, Loan and Other Businesses.” Loan Procedures DBJ is ready at all times to discuss with its clients optimal Financing terms are discussed after DBJ has conducted financial solutions, as well as the specific terms and conditions comprehensive due diligence of the businesses of its client DBJ can offer, including interest rates and loan maturities. enterprises, including assessment of their present business status, project plans and profitabilities. Financing ConditionsConditions • LoanLoan AmountsAmounts • Interest Rates Loan amounts are determined through consultation DBJ sets interest rates in line with loan periods and basedbased on client financing plans.plans. risk. Fixed- and floating-rate loans are both available. • LoanLoan TermsTerms DBJ also considers the application of various interest Appropriate loan terms are set in consultation with rate subsidy programs. our client enterprises according to factors such as • Collateral/Guarantees repayment plans, business profitability and the Loans may require collateral and/or guarantees, expected life of equipment and/or facilities. Grace depending on due diligence results. periodsperiods may be applied as needed. Note: Please be aware that, based on due diligence results, DBJ may not be able to provide the loans that prospective borrowers anticipate. Medium- to Long-Term Loans By leveraging the long-term financing expertise it cultivated based on the profitability of the business that requires fund- as a policy-based financial institution, DBJ provides loans ing. DBJ also works to meet the varied needs of our clients, to clients to match their medium- to long-term financing such as by introducing grace periods. needs. Medium- to long-term repayment may be proposed We provide a broad range of information to our clients. Through our long history of opera-opera- DBJ puts its wide-ranging net-net- We provide information generated tionstions,, we have accumulated substan- works to use to help clientclientss through our various studies and tial eexpertisexpertise and exexperienceperience that expexpandand their businesses.businesses. research activities,activities, as well as infor- we apply when offering advice to mation from overseas, through addaddressress tthehe iissuesssues ourour clientsclients face.face. our reports and other publications. 34 Annual Report & CSR Report 2016 Integrated Investment and Loan Services Mezzanine Financing Mezzanine financing is an intermediate financing method Mezzanine financing has the benefit of providing risk that is between typical senior bank loans and equity finance capital that may be difficult to obtain through senior loans. in terms of risk. Such financing also prevents dilution of the voting rights of Although mezzanine financing is comparatively risky existing shareholders. Redemption and exit methods can be because its payment is subordinated to senior loans, it set to be flexible. plays an important role in markets such as the United From a long-term perspective, DBJ helps clients resolve States which have a broad range of investors with diverse their balance sheets issues through total financing solutions investment appetites. One of a diverse range of funding that range from structuring and arrangement to providing methods, mezzanine financing helps to ensure economic risk capital. DBJ’s Businesses rationality by setting adequate interest rate and dividend levels to correspond to the investment risk. Depending on TypesTypes of Mezzanine FinancingFinancing clients’ financing plans and capital policies, flexible mez- • Subordinated loans,loans, subordinated bondbondss zanine financing can be set. In recent years, demand for • Preferred shares,shares, classified sharesshares mezzanine financing has grown in association with business • Hybrid
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