Social Finance

Issuance of Social Bonds

Sompo Holdings issued its first social bond on April 21, 2023. Upon determination of the terms of issuance, it has received a “Social 1” rating from Japan Credit Rating Agency, Ltd., the highest social bond rating provided by the agency.

Background and Purpose of the Issuance

In Japan, in conjunction with the increase in the number of elderly requiring nursing care, the gap between supply and demand of human resources to provide nursing care is expected to widen, and there is a need to resolve serious social issues such as a shortage of financial resources for long-term care insurance and shortage of labor at nursing care sites.
Sompo Holdings made a full-scale entry into the nursing care field in 2015, providing the highest quality nursing care services as a full-line operator, from home-care to facility care, under the brand slogan of being “A Theme Park for Security, Health & Wellbeing” and to contribute to making “Japan a country of affluent longevity that can be proud of in the world.” Sompo Holdings is currently working on building a “Real Data Platform for Security, Health and Wellbeing (nursing care RDP)” as a new stage in the Nursing Care & Seniors Business.
Sompo Holdings has acquired all shares of ND Software Co., Ltd. (hereinafter, “ND Software”) making it a fully owned subsidiary*1. Now, it has decided to issue social bonds to be used as part of the funds for this acquisition. Through its partnership with ND Software, Sompo Holdings will further develop nursing care RDP (service name: “egaku”) and promote digital transformation (DX) of the nursing care industry, while contributing to solve the social issues by bridging the supply and demand gap for care workers and maintaining and improving the QOL (Quality of Life) of people requiring nursing care and their families.

  1. Announcement regarding Complete Conversion of ND Software Co., Ltd. into a Subsidiary and Change in Representative
    https://www.sompo-hd.com/-/media/hd/en/files/news/2023/e_20230228_1.pdf?la=ja-JP

Summary of the Terms of Issuance

1. Issuer Sompo Holdings Inc.
2. Name of Bonds 1st series of unsecured straight bond with inter-bond pari passu clause (social bond)
3. Aggregate principal amount JPY 70 billion
4. Denomination JPY 100 million
5. Issue price JPY 100 per amount of JPY 100 of each bond
6. Redemption price JPY 100 per amount of JPY 100 of each bond
7. Maturity dates April 27, 2028 (5-year bonds)
8. Interest rates 0.479% per annum
9. Offering period April 21, 2023
10.Payment date April 27, 2023
11.Interest payment dates April 27 and October 27 of each year
12.Use of funds Repayment of short-term borrowings (bridge loan) procured to acquire shares of ND Software
13.Third-party evaluation*2 Third-party evaluation obtained from Japan Credit Rating Agency Ltd.
14.Joint lead managers Mizuho Securities Co., Ltd.
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
Daiwa Securities Co. Ltd.
Nomura Securities Co., Ltd.
SMBC Nikko Securities Inc.
BofA Securities Japan Co., Ltd.
15.Structuring agent Mizuho Securities Co., Ltd.
16.Fiscal agent Mizuho Bank, Ltd.
17.Credit rating AA+(Japan Credit Rating Agency, Ltd.)
18.Securities depository Japan Securities Depository Center, Incorporated

*2 For details about the eligibility review of the framework, please refer to Japan Credit Rating Agency’s website.
https://www.jcr.co.jp/en/

Use of Proceeds

Funds raised by the social bond will be allocated entirely to repay short-term bridge loans made for investments that meets the criteria below.

[Eligibility Criteria]

Funds to acquire shares of ND Software Co., Ltd*3

*3 ND Software's business focuses on the development and sale of nursing care operation support systems, nursing care record systems, and other systems for nursing care facilities.
By making ND Software a subsidiary of Sompo Holdings, we will further develop the nursing care RDP and promote DX in the nursing care industry.

[Social Issue]

Correspondence to an aging society

[Target Population]

Elderly people, their families, and those engaged in nursing care

[Social Project Categories in the Social Bond Principles]

Access to essential services (welfare and care for the elderly, care support), socioeconomic improvement and empowerment

Reporting

Allocation of proceeds

Repayment of short-term borrowings procured for the acquisition of ND Software's stock.
Timing of allocation: August 2023
Amount allocated: 70 billion yen (fully allocated)

Impact reporting

・Outputs

In February 2023, ND Software will become a wholly owned subsidiary of Sompo Holdings to further develop the nursing care RDP and promote DX in the nursing care industry.

・Outcomes

Number of offices End of March
2023
Nursing care operation support systems 50,731
Nursing care operation record systems*4 (Nursing care*5) 12,605
Nursing care operation record systems*4 (Recording*6) 6,280

*4 Nursing care record systems, Database Unit

*5 Systems that manage basic user data

*6 ICT-enabled system for recording operations

・Impacts

We aim to improve the sustainability of the nursing care industry by promoting DX in the nursing care industry, providing new products and services through the nursing care RDP to improve the quality of service for a wide range of Japanese nursing care users and their families, improving the efficiency of nursing care sites, and increasing the satisfaction of nursing care workers.

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