Financial Covenants in Borrowing Agreements and Risk of Loan Acceleration
First written in FY2024-Q2. 3 of 6 entries say "Restated". Latest entry: FY2026.
Kusurinomadoguchi moved to the "Worse" side of this theme in 2026, 3 years after the typical company in this theme (2023).
17 other companies' latest entry also says "Worsened".
- FY2026WorsenedAnnual report
「Overdraft limit ¥2,000,000 thousand ¥3,000,000 thousand Outstanding borrowings — same ¥2,000,000 thousand same」
The financial covenants and absence of breaches continue, but the special overdraft limit has become ¥3.0 billion and outstanding borrowings at the consolidated fiscal year-end are ¥2.0 billion. - FY2026-H1RestatedAnnual report
「The special overdraft agreement between our company and Sumitomo Mitsui Banking Corporation contains financial covenants. If (1) the interest coverage ratio is 1 or less, (2) net income is negative for 2 consecutive fiscal years, or (3) the company is insolvent, the bank may request discussions to review the overdraft limit and reference interest rate. As of the end of the interim consolidated accounting period under review, none of the financial covenants had been breached.」
The company continues to disclose the special overdraft agreement with Sumitomo Mitsui Banking Corporation and its financial covenants, stating that none had been breached as of the interim period-end. - FY2025SoftenedAnnual report
「The special overdraft agreement between our company and Sumitomo Mitsui Banking Corporation contains financial covenants. If (1) the interest coverage ratio is 1 or less, (2) net income is negative for 2 consecutive fiscal years, or (3) the company is insolvent, the bank may request discussions to review the overdraft limit and reference interest rate. As of the end of the consolidated fiscal year under review, none of the financial covenants had been breached.」
The annual disclosure refers only to the agreement with Sumitomo Mitsui Banking Corporation, with an overdraft limit of ¥2,000,000 thousand, no outstanding borrowings and no breach of the financial covenants. - FY2025-H1RestatedAnnual report
「As of the end of the interim consolidated accounting period under review, none of the financial covenants had been breached.」
The borrowing agreements continue to contain financial covenants, and none had been breached as of the end of the interim consolidated accounting period. - FY2024-Q3RestatedAnnual report
「As of the end of the third quarter of the consolidated accounting period under review, none of the financial covenants had been breached.」
The borrowing agreements continue to contain financial covenants, and none had been breached as of the end of the third quarter. - FY2024-Q2First statedAnnual report
「The special overdraft agreement between our company and Sumitomo Mitsui Banking Corporation contains financial covenants. If (1) the interest coverage ratio is 1 or less, (2) net income is negative for 2 consecutive fiscal years, or (3) the company is insolvent, the bank may request discussions to review the overdraft limit and reference interest rate. The special overdraft agreement between our company and The Chiba Bank,Ltd. also contains financial covenants. The benefit of time is lost if (1) ordinary profit or loss is negative for 2 consecutive fiscal years, (2) net assets fall below 75% of the higher of the amount at the end of the fiscal year ending March 2021 or the immediately preceding fiscal year, or (3) the quarterly interest coverage ratio is 1 or less. The overdraft agreement with Mizuho Bank contains financial covenants requiring, for standalone financial statements beginning with the fiscal year ended March 2023, that (1) net assets in subsequent periods be at least 80% of net assets at the end of the immediately preceding fiscal year and (2) losses not be recorded for 2 consecutive fiscal years. Failure to comply results in loss of the benefit of time. As of the end of the second quarter of the consolidated accounting period under review, none of the financial covenants had been breached.」
Several borrowing agreements contain financial covenants. The company discloses the numerical tests for each agreement and states that none had been breached as of the quarter-end.