Risk of High Interest-Bearing Debt, Rising Interest Rates and Breach of Financial Covenants
First written in FY2019. 18 of 22 entries say "Worsened", first in FY2020. Latest entry: 2026-07-31.
Fuji Corporation Limited moved to the "Worse" side of this theme in 2020, 3 years before the typical company in this theme (2023).
The whole theme swung hardest in 2017: 8 of 54 companies on the "Worse" side.
4 other companies' latest entry also says "Materialised".
- FY2026WorsenedAnnual report
「Total interest-bearing debt has remained relatively high compared with total assets. If market interest rates fluctuate sharply in the future, or if the Group is required by financial institutions to repay its borrowings due to the effects of monetary tightening or other factors and is unable to obtain new financing, this could affect the Group's business performance and financial condition.」
Short-term and long-term borrowings increased, resulting in higher interest-bearing debt at the end of the period. For borrowings subject to financial covenants, the Company also specifically discloses the outstanding balance and covenants relating to the maintenance of net assets, ordinary profit or loss, and ratios to net sales. - FY2026-H1WorsenedAnnual report
「Although monetary policy remains unchanged, the upward trend in long-term interest rates could affect funding costs and act as a constraint on household and corporate investment and consumption. ”The following contracts for borrowings with newly established financial covenants were entered into during the current interim consolidated accounting period.”」
The company explicitly states that rising long-term interest rates could affect funding costs and newly entered into 5 borrowing agreements with financial covenants during the current interim consolidated accounting period. - FY2025WorsenedAnnual report
「Total interest-bearing debt has remained at a relatively high level compared with total assets. The Group's operating results and financial position could be affected if financial institutions request an increase in interest rates, or if they demand repayment due to monetary tightening or other factors in the future and the Group is unable to obtain new financing.」
The company continues to disclose the risks associated with the high level of interest-bearing debt, rising interest rates and difficulty maintaining financing, and also discloses increases in short-term borrowings and balances of borrowings subject to financial covenants. - FY2025-H1WorsenedAnnual report
「This reflected an increase of ¥8,141 million in short-term borrowings, decreases of ¥2,655 million in notes payable and construction payables, ¥201 million in electronically recorded obligations, ¥281 million in advances received, ¥332 million in contract liabilities and ¥143 million in income taxes payable, among other factors. Non-current liabilities were ¥72,854 million, an increase of ¥392 million from the end of the previous consolidated fiscal year. This mainly reflected a decrease of ¥325 million in bonds and an increase of ¥822 million in long-term borrowings, among other factors.」
Short-term and long-term borrowings increased, and interest-bearing debt exposure continued to expand even after including the decrease in bonds. - FY2024-Q3WorsenedAnnual report
「Current liabilities were ¥49,128 million, an increase of ¥9,185 million from the end of the previous consolidated fiscal year. This mainly reflected increases of ¥1,003 million in notes payable and construction payables, ¥1,179 million in electronically recorded obligations and ¥7,478 million in short-term borrowings, as well as decreases of ¥541 million in income taxes payable and ¥935 million in contract liabilities, among other factors. Non-current liabilities were ¥68,778 million, an increase of ¥1,196 million from the end of the previous consolidated fiscal year. This mainly reflected increases of ¥100 million in bonds and ¥1,381 million in long-term borrowings, among other factors.」
Short-term borrowings increased by ¥7,478 million, long-term borrowings by ¥1,381 million and bonds by ¥100 million, continuing the expansion of interest-bearing debt exposure. - FY2024-Q2WorsenedAnnual report
「This reflected increases of ¥113 million in notes payable and construction payables, ¥248 million in electronically recorded obligations, ¥8,758 million in short-term borrowings and ¥545 million in advances received, as well as decreases of ¥567 million in contract liabilities and ¥213 million in income taxes payable, among other factors. Non-current liabilities were ¥65,237 million, a decrease of ¥2,344 million from the end of the previous consolidated fiscal year. This mainly reflected an increase of ¥300 million in bonds and a decrease of ¥2,441 million in long-term borrowings, among other factors.」
Short-term borrowings increased by ¥8,758 million, while long-term borrowings decreased by ¥2,441 million and bonds increased by ¥300 million, and interest-bearing debt exposure expanded from the end of the previous fiscal year. - FY2024-Q1WorsenedAnnual report
「”Increase of ¥8,298 million in short-term borrowings” ”Decrease of ¥200 million in bonds and decrease of ¥3,478 million in long-term borrowings”」
The increase in short-term borrowings exceeded the decreases in long-term borrowings and bonds, expanding interest-bearing debt exposure from the end of the previous consolidated fiscal year. - FY2023RestatedAnnual report
「Total interest-bearing debt has remained at a relatively high level compared with total assets. In recent years, interest expense has remained relatively low because of persistently low interest rates, but the Group's operating results and financial position could be affected if financial institutions request an increase in interest rates, or if they demand repayment due to monetary tightening or other factors in the future and the Group is unable to obtain new financing.」
The company continues to identify the risks associated with the high level of interest-bearing debt, future interest rate increases, difficulty maintaining financing and breaches of financial covenants. - FY2023-Q3WorsenedAnnual report
「Decrease in short-term borrowings: ¥6,668 million; increases in bonds of ¥300 million and long-term borrowings of ¥8,691 million」
Short-term borrowings decreased, but the increases in long-term borrowings and bonds were larger, expanding interest-bearing debt exposure from the end of the previous fiscal year. - FY2023-Q2WorsenedAnnual report
「”Decrease of ¥2,578 million in short-term borrowings” ”Increase of ¥500 million in bonds and increase of ¥4,856 million in long-term borrowings”」
Although short-term borrowings decreased, increases in long-term borrowings and bonds expanded interest-bearing debt exposure from the end of the previous fiscal year. - FY2023-Q1WorsenedAnnual report
「This reflected an increase of ¥889 million in short-term borrowings, decreases of ¥828 million in notes payable and construction payables and ¥1,139 million in income taxes payable, among other factors. Non-current liabilities were ¥64,524 million, an increase of ¥3,585 million from the end of the previous consolidated fiscal year. This mainly reflected increases of ¥700 million in bonds and ¥2,980 million in long-term borrowings, among other factors.」
Short-term borrowings, long-term borrowings and bonds increased, expanding interest-bearing debt exposure from the end of the previous fiscal year. - FY2022WorsenedAnnual report
「During the current consolidated fiscal year, the Group entered into 3 commitment line agreements with financial institutions to fund purchases for its used-housing asset business and purchases of land for entire-building rental apartments, with total contracted commitments of ¥9,500 million and total borrowings at the fiscal year-end of ¥1,498 million. It also entered into 1 commitment-line syndicated loan agreement for acquisition funding, with flexible permitted uses including subdivided housing, used housing and land for entire-building rental apartments, with a contracted commitment of ¥1,200 million.」
The Group newly entered into commitment lines and other facilities for acquisition funding, expanding borrowing capacity available for business investment. Interest-bearing debt also increased from the end of the previous fiscal year. - FY2022-Q3WorsenedAnnual report
「This reflected an increase of ¥8,195 million in short-term borrowings, decreases of ¥872 million in electronically recorded obligations, ¥888 million in income taxes payable and ¥397 million in advances received, among other factors. Non-current liabilities were ¥62,299 million, an increase of ¥835 million from the end of the previous consolidated fiscal year. This mainly reflected a decrease of ¥525 million in bonds and an increase of ¥1,562 million in long-term borrowings.」
Increases in short-term and long-term borrowings expanded interest-bearing debt exposure from the end of the previous fiscal year, even after including the decrease in bonds. - FY2022-Q2WorsenedAnnual report
「Current liabilities were ¥53,157 million, an increase of ¥8,520 million from the end of the previous consolidated fiscal year. This mainly reflected increases of ¥1,673 million in notes payable and construction payables and ¥8,018 million in short-term borrowings, as well as decreases of ¥718 million in electronically recorded obligations and ¥178 million in income taxes payable. Non-current liabilities were ¥54,173 million, a decrease of ¥7,290 million from the end of the previous consolidated fiscal year. This mainly reflected a decrease of ¥425 million in bonds and a decrease of ¥6,745 million in long-term borrowings.」
The increase in short-term borrowings exceeded the decreases in long-term borrowings and bonds, increasing financial exposure from borrowings and bonds from the end of the previous fiscal year. - FY2022-Q1WorsenedAnnual report
「This reflected an increase of ¥7,634 million in short-term borrowings, a decrease of ¥100 million in bonds and a decrease of ¥4,503 million in long-term borrowings, among other factors.」
The increase in short-term borrowings exceeded the decreases in long-term borrowings and bonds, and total borrowings and bonds increased from the end of the previous fiscal year, partially expanding the interest-bearing debt exposure that had declined in the previous fiscal year. - FY2021MitigatedAnnual report
「Interest-bearing debt decreased by ¥17,430 million from the end of the previous consolidated fiscal year.」
Although the high level of interest-bearing debt and interest rate risk continue to be disclosed, interest-bearing debt decreased by ¥17,430 million during the fiscal year, reducing financial exposure. - FY2020WorsenedAnnual report
「Total interest-bearing debt has remained at a relatively high level compared with total assets. In recent years, interest expense has remained relatively low because of persistently low interest rates, but the Group's operating results and financial position could be affected if financial institutions demand repayment due to monetary tightening or other factors and the Group is unable to obtain new financing, or if they request an increase in interest rates.」
The company continues to identify the high level of interest-bearing debt and the risks of rising interest rates and difficulty maintaining financing, while financing through short- and long-term borrowings and bonds also increased during the period. - FY2019First statedAnnual report
「Total interest-bearing debt has remained at a relatively high level compared with total assets. In recent years, interest expense has remained relatively low because of persistently low interest rates, but the Group's operating results could be affected if interest rates rise in the future.」
The company identifies the relatively high level of interest-bearing debt, future interest rate increases, and the possibility of breaching collateral and financial covenants under its commitment lines as risks.