Interest Rate Risk Associated with Variable-Rate Borrowings and Interest Rate Swaps
First written in FY2018. 4 of 8 entries say "Restated". Latest entry: FY2026.
Nichia Steel Works moved to the "Worse" side of this theme in 2021, 4 years before the typical company in this theme (2025).
The whole theme swung hardest in 2025: 12 of 58 companies on the "Worse" side.
4 other companies' latest entry also says "Reframed".
- FY2026ReframedAnnual report
「Of the borrowings, short-term borrowings are primarily financing for operating transactions, while long-term borrowings are primarily financing for capital expenditures. The repayment date is no later than 3 years after the balance sheet date.」
The current fiscal year’s disclosure states that, compared with the previous explanation of variable-rate borrowings and interest rate swaps, there are no derivatives subject to hedge accounting and the maximum repayment period for long-term borrowings is no more than 3 years. - FY2021ReframedAnnual report
「Derivative transactions subject to hedge accounting None.」
While the previous disclosures described interest rate swaps for variable-rate borrowings, the current fiscal year’s information on derivative transactions states that there are no transactions subject to hedge accounting. - FY2020RestatedAnnual report
「Of the borrowings, short-term borrowings are primarily financing for operating transactions, while long-term borrowings are primarily financing for capital expenditures. The repayment date is no later than 5 years after the balance sheet date. Some borrowings carry variable interest rates and are therefore exposed to interest rate fluctuation risk. Derivative transactions consist of interest rate swaps entered into to hedge the interest rate fluctuation risk associated with long-term borrowings.」
The interest rate fluctuation risk associated with variable-rate borrowings and the hedging policy using interest rate swaps continue to be presented. - FY2020-Q3RestatedAnnual report
「Long-term borrowings (Note 1) 4,961,000 4,972,143 11,143 (Note) 4. Long-term borrowings The fair value of these borrowings is calculated by discounting the total amount of principal and interest at the rate assumed for a similar new borrowing. Some long-term borrowings bearing variable interest rates are subject to the exceptional treatment for interest rate swaps, and the fair value is calculated by discounting the total amount of principal and interest treated as a single unit with the relevant interest rate swap at the rate assumed for a similar new borrowing.」
The continued application of the exceptional treatment for interest rate swaps to some long-term borrowings bearing variable interest rates was presented. The carrying amount of long-term borrowings was ¥4,961 million. - FY2019ReframedAnnual report
「Of the borrowings, short-term borrowings are primarily financing for operating transactions, while long-term borrowings are primarily financing for capital expenditures. The repayment date is no later than 5 years after the balance sheet date. Some borrowings carry variable interest rates and are therefore exposed to interest rate fluctuation risk. Derivative transactions consist of interest rate swaps entered into to hedge the interest rate fluctuation risk associated with long-term borrowings.」
The structure involving variable-rate borrowings and hedging through interest rate swaps was maintained, but the stated maximum repayment period changed from no more than 4 years to no more than 5 years, and the portion of the ¥2,000 million in interest rate swaps maturing after 1 year was eliminated. - FY2019-Q2RestatedAnnual report
「Derivative transactions (964) (964)」
At the end of the second quarter of the current fiscal year, derivative transactions were also presented as a net liability of ¥964 thousand. No new explanation of the details of the interest rate swaps was provided. - FY2019-Q1RestatedAnnual report
「Derivative transactions (1,519)」
In the information on financial instruments at the end of the first quarter of the current fiscal year, derivative transactions were presented as a net liability of ¥1.519 million. No new explanation of the details of the interest rate swaps was provided. - FY2018First statedAnnual report
「Of the borrowings, short-term borrowings are primarily financing for operating transactions, while long-term borrowings are primarily financing for capital expenditures. The repayment date is no later than 4 years after the balance sheet date. Some borrowings carry variable interest rates and are therefore exposed to interest rate fluctuation risk. Derivative transactions consist of interest rate swaps entered into to hedge the interest rate fluctuation risk associated with long-term borrowings.」
The interest rate fluctuation risk associated with variable-rate borrowings and the hedge using interest rate swaps covering long-term borrowings of ¥2,000 million were disclosed together for the first time.