Syndicated Loan Financial Covenants and Liquidity Risk
First written in FY2022. 1 of 8 entries say "Worsened", first in FY2023. Latest entry: FY2026.
The whole theme swung hardest in 2017: 8 of 54 companies on the "Worse" side.
52 other companies' latest entry also says "Mitigated".
- FY2026MitigatedAnnual report
「Certain long-term borrowings, including long-term borrowings due for repayment within 1 year, totaling ¥83,320 thousand are subject to the following financial covenants. If these covenants are breached, the benefit of time for the relevant borrowings may be lost. Although the above financial covenants were breached at the end of the fiscal year ending March 2026, we had not received notice from any financial institution that it would exercise its rights concerning the loss of the benefit of time.」
Although the financial covenant breach continued, the affected borrowings decreased from ¥133,324 thousand in the previous fiscal year to ¥83,320 thousand, and no notice of the loss of the benefit of time had been received. - FY2026-H1Update to the amount subject to financial covenant breachesAnnual report
「Although we were in breach of the above financial covenants at the end of the interim consolidated accounting period, we had not received notice from any financial institution that it would exercise its rights concerning the loss of the benefit of time.」
The continuing breach of the financial covenants was reconfirmed, with ¥108,322 thousand of the affected long-term borrowings. No notice concerning the loss of the benefit of time had been received from any financial institution. - FY2025Update to the amount subject to financial covenant breachesAnnual report
「Although we were in breach of the above financial covenants at the end of the fiscal year ending March 2025, we had not received notice from any financial institution that it would exercise its rights concerning the loss of the benefit of time.」
Although the syndicated loan agreement was terminated, breaches of the net asset and ordinary income or loss covenants continued for ¥133,324 thousand of certain long-term borrowings. - FY2025-H1Syndicated loan agreement terminated while covenant breaches continuedAnnual report
「To finance capital expenditures and other required funds, our group entered into a ¥1,150,000 thousand committed syndicated loan agreement on 30 November 2023 with four transaction banks and other financial institutions, with Sumitomo Mitsui Banking Corporation acting as arranger. The agreement terminated upon expiration of its term on 28 June 2024.」
The ¥1.15 billion committed syndicated loan agreement was terminated, while breaches of financial covenants continued for certain borrowings. - FY2024-Q1MaterialisedAnnual report
「As a result, after obtaining the other lending financial institutions' consent to voluntary early repayment to that one institution, we voluntarily repaid the full amount borrowed from that institution, ¥570,000 thousand, on 8 July 2024.」
Following a request from a financial institution for early repayment, the full ¥570,000 thousand borrowing was voluntarily repaid. The liquidity and financial institution support risk arising while financial covenants were breached materialized as an actual cash outflow. - FY2023WorsenedAnnual report
「Although we have not currently received notice from certain lending financial institutions that they intend to apply provisions concerning the loss of the benefit of time, we are in breach of financial covenants relating to borrowings from those institutions.」
Following termination of the former syndicated loan agreement, a breach of financial covenants concerning net assets and ordinary income or loss on long-term borrowings was disclosed. EV Charging Infrastructure No. 1 Godo Kaisha also entered into a new ¥1.15 billion committed agreement. - FY2023-Q3Change in the risk profile following termination of the agreementAnnual report
「On 27 December 2022, we entered into a ¥1,500,000 thousand committed syndicated loan agreement with seven transaction banks and other financial institutions, with Sumitomo Mitsui Banking Corporation acting as arranger. The agreement was terminated effective 18 August 2023.」
The ¥1.5 billion syndicated loan agreement containing financial covenants was terminated, reducing both the borrowing limit and the outstanding amount drawn under the agreement to zero. Although the financial covenant risk profile changed following termination, the financing facility also ceased to exist. - FY2022First statedAnnual report
「This agreement is subject to the following financial covenants: (1) The total amount of net assets shown in the consolidated balance sheet at the end of the fiscal year ending December 2023 and at the end of each subsequent fiscal year must be maintained at or above an amount equal to 75% of the total amount of net assets shown in the consolidated balance sheet at the end of the fiscal year ended December 2022. (2) Ordinary income or loss shown in the consolidated statement of income for the fiscal years ending December 2023 and December 2024 must not be a loss for consecutive periods.」
New financial risks were disclosed for the ¥1.5 billion committed syndicated loan, including maintaining net assets at 75% or more of the December 2022 level and meeting the ordinary income or loss requirements for 2023 and 2024.