Financial Covenants and Interest Rate and Foreign Exchange Exposure Associated with Acquisition Financing
First written in FY2017-Q3. 2 of 6 entries say "Materialised", first in FY2017. Latest entry: FY2026.
Terumo moved to the "Worse" side of this theme in 2017, 8 years before the typical company in this theme (2025).
1 other company's latest entry also says "Worsened".
- FY2026WorsenedAnnual report
「Debt outstanding at fiscal year-end: ¥220.0 billion (total)」
Borrowings to finance the acquisition of OrganOx brought the fiscal year-end balance of debt subject to financial covenants to ¥220.0 billion. The covenants requiring total equity of at least 75% and an issuer rating of BBB- or higher remain in effect. - FY2026-H1WorsenedAnnual report
「Based on a resolution adopted at a meeting of the Board of Directors held on 17 October 2025, the Company entered into loan agreements with MUFG Bank and Mizuho Bank dated 24 October 2025 and borrowed the funds on 29 October 2025. 1. Purpose of borrowing: to finance the acquisition of OrganOx. 3. Amount borrowed: ¥240.0 billion. 8. Financial covenants: From each fiscal year-end and interim period-end from the fiscal year ending March 2026 onward (each such period-end referred to in this section as a “fiscal year-end or interim period-end”), the total equity reported on the Company’s consolidated statement of financial position must be maintained at 75% or more of the higher of the amount reported as total equity on the Company’s consolidated statement of financial position at the end of the fiscal year ended September 2025 or the amount of total equity on the Company’s consolidated statement of financial position at the immediately preceding fiscal year-end or interim period-end. The issuer rating assigned to the Company by Rating and Investment Information, Inc. must be maintained at BBB- or higher.」
The Company borrowed ¥240.0 billion to finance the acquisition of OrganOx, with financial covenants requiring total equity to be maintained at 75% or more and the issuer rating to be maintained at BBB- or higher. Financial exposure associated with acquisition financing has increased. - FY2017MaterialisedAnnual report
「Based on a resolution adopted at a meeting of the Board of Directors held on 9 February 2017, the Company entered into a syndicated loan agreement dated 29 March 2017, with Mizuho Bank and Mitsubishi Tokyo UFJ Bank as arrangers and Mitsubishi Tokyo UFJ Bank as agent, and drew down the loan on 28 April 2017.」
The Company drew down US$620 million and ¥48.0 billion to acquire the hemostasis device business and acquire Kalila Medical, with financial covenants requiring the maintenance of equity and avoidance of consecutive losses incorporated into the actual loan agreements. - FY2017-Q3First statedAnnual report
「From the fiscal year ending March 2017 onward, at the end of each fiscal year, the amount of consolidated equity on the consolidated statement of financial position must be maintained at 75% or more of the higher of the amount of consolidated equity on the consolidated statement of financial position at the end of the immediately preceding fiscal year or at the end of the fiscal year ended March 2016.」
The Group borrowed US$168 million and ¥12.0 billion to finance the acquisition of Sequent Medical, with covenants requiring the maintenance of equity above a specified level and avoiding losses for 2 consecutive fiscal years.