Repayment Risk from Financial Covenants in Commitment Lines
First written in FY2017. 23 of 32 entries say "Restated". Latest entry: FY2026.
Verite moved to the "Worse" side of this theme in 2024, 1 year after the typical company in this theme (2023).
The whole theme swung hardest in 2017: 8 of 54 companies on the "Worse" side.
22 other companies' latest entry also says "Worsened".
- FY2026WorsenedAnnual report
「Total overdraft and commitment line limits ¥2,200 million ¥3,000 million Outstanding borrowings ¥1,500 million ¥2,200 million Difference ¥700 million ¥800 million The commitment line agreements contain financial covenants requiring the Company to maintain a specified level of equity, such as at least 75% of the amount in the equity section at the end of the previous fiscal year, and not to record an ordinary loss in its income statement. If these covenants are breached, all obligations under the agreements will become immediately due and payable, and the Company must repay them immediately.」
The total limits of the overdraft and commitment lines subject to financial covenants are ¥3,000 million, and outstanding borrowings are ¥2,200 million, representing increases from the previous fiscal year in both the amount subject to the covenants and the outstanding borrowings exposed to repayment risk. - FY2026-H1WorsenedAnnual report
「1) Total commitment: ¥1,200 million 6) Financial maintenance requirements: (a) At the end of each fiscal year, maintain the amount of equity in the equity section of the standalone balance sheet at or above 75% of the higher of the amount of equity in the equity section at 31 March 2025 or the amount of equity in the equity section at the end of the immediately preceding fiscal year. (b) No ordinary loss may be recorded in the standalone income statement for any fiscal year. (2) Commitment line agreement with Mizuho Bank 1) Total commitment: ¥800 million (3) Commitment line agreement with Sumitomo Mitsui Trust Bank 1) Total commitment: ¥500 million」
The total commitment lines subject to financial maintenance requirements amount to ¥2,500 million, comprising ¥1,200 million with MUFG Bank, ¥800 million with Mizuho Bank and ¥500 million with Sumitomo Mitsui Trust Bank. The requirements include maintaining equity at or above 75% and not recording an ordinary loss. - FY2024WorsenedAnnual report
「※2 The ¥2,000 million commitment line is subject to financial covenants. If any of the covenants below is breached, the borrower will lose the benefit of time with respect to all obligations under the agreement and will be required to repay those obligations immediately.」
The commitment line subject to financial covenants increased from ¥1,000 million in the previous fiscal year to ¥2,000 million, increasing the amount of borrowings exposed to the risk of immediate repayment upon a breach. - FY2024-Q3RestatedAnnual report
「During the cumulative third quarter, there were no new business or other risks, nor any material changes to the business and other risks described in the securities report for the previous fiscal year.」
The Company states that there have been no new occurrences or significant changes regarding the repayment risk arising from financial covenants under the commitment line. - FY2024-Q2RestatedAnnual report
「During the cumulative second quarter, there were no new business or other risks, nor any material changes to the business and other risks described in the securities report for the previous fiscal year.」
The Company states that there have been no new occurrences or significant changes regarding the repayment risk arising from financial covenants under the commitment line. - FY2024-Q1RestatedAnnual report
「During the cumulative first quarter, there were no new business or other risks, nor any material changes to the business and other risks described in the securities report for the previous fiscal year.」
The Company states that there have been no new occurrences or significant changes regarding the repayment risk arising from financial covenants under the commitment line. - FY2023MitigatedAnnual report
「Of the short-term borrowings, the ¥1,000 million under the commitment line agreement is subject to financial covenants. If any of the covenants below are breached, all obligations under the agreement will become immediately due and payable, and the Company must repay them immediately.」
The commitment line subject to financial covenants decreased from ¥1,300 million in the previous fiscal year to ¥1,000 million. The covenants prohibiting ordinary losses for 2 consecutive periods and equity below 75% remain in effect. - FY2023-Q3RestatedAnnual report
「During the cumulative third quarter, there were no new business or other risks, nor any material changes to the business and other risks described in the securities report for the previous fiscal year.」
The Company states that there have been no new occurrences or significant changes regarding the repayment risk arising from financial covenants under the commitment line. - FY2023-Q2RestatedAnnual report
「During the cumulative second quarter, there were no new business or other risks, nor any material changes to the business and other risks described in the securities report for the previous fiscal year.」
The Company states that there have been no new occurrences or significant changes regarding the repayment risk arising from financial covenants under the commitment line. - FY2023-Q1RestatedAnnual report
「During the cumulative first quarter, there were no new business or other risks, nor any material changes to the business and other risks described in the securities report for the previous fiscal year.」
The Company states that there have been no new occurrences or significant changes regarding the repayment risk arising from financial covenants under the commitment line. - FY2022WorsenedAnnual report
「Of the short-term borrowings, the ¥1,300 million under the commitment line agreement is subject to financial covenants. If any of the covenants below is breached, the borrower will lose the benefit of time with respect to all obligations under the agreement and will be required to repay those obligations immediately.」
The commitment line subject to financial covenants increased from ¥600 million in the previous fiscal year to ¥1,300 million, increasing the amount of borrowings subject to the covenants. - FY2022-Q3RestatedAnnual report
「During the cumulative third quarter, there were no new business or other risks, nor any material changes to the business and other risks described in the securities report for the previous fiscal year.」
The Company states that there have been no new occurrences or significant changes regarding the repayment risk arising from financial covenants under the commitment line. - FY2022-Q2RestatedAnnual report
「During the cumulative second quarter, there were no new business or other risks, nor any material changes to the business and other risks described in the securities report for the previous fiscal year.」
The Company states that there have been no new occurrences or significant changes regarding the repayment risk arising from financial covenants under the commitment line. - FY2022-Q1RestatedAnnual report
「During the cumulative first quarter, there were no new business or other risks, nor any material changes to the business and other risks described in the securities report for the previous fiscal year.」
The Company states that there have been no new occurrences or significant changes regarding the repayment risk arising from financial covenants under the commitment line. - FY2021RestatedAnnual report
「Of the short-term borrowings, the ¥600 million under the commitment line agreement is subject to financial covenants. If any of the covenants below are breached, all obligations under the agreement will become immediately due and payable, and the Company must repay them immediately.」
The Company continues to disclose financial covenants on the ¥600 million commitment line, including a prohibition on ordinary losses for 2 consecutive periods and an equity threshold, as well as the risk of immediate repayment upon a breach. - FY2021-Q3RestatedAnnual report
「During the cumulative third quarter, there were no new business or other risks, nor any material changes to the business and other risks described in the securities report for the previous fiscal year.」
The Company states that there have been no new occurrences or significant changes regarding the repayment risk arising from financial covenants under the commitment line. - FY2021-Q2RestatedAnnual report
「During the cumulative second quarter, there were no new business or other risks, nor any material changes to the business and other risks described in the securities report for the previous fiscal year.」
The Company states that there have been no new occurrences or significant changes regarding the repayment risk arising from financial covenants under the commitment line. - FY2021-Q1RestatedAnnual report
「During the cumulative first quarter, there were no new business or other risks, nor any material changes to the business and other risks described in the securities report for the previous fiscal year.」
The Company states that there have been no new occurrences or significant changes regarding the repayment risk arising from financial covenants under the commitment line. - FY2020MitigatedAnnual report
「Of the short-term borrowings, the ¥600 million under the commitment line agreement is subject to financial covenants. If any of the covenants below are breached, all obligations under the agreement will become immediately due and payable, and the Company must repay them immediately.」
The amount drawn under the commitment line subject to financial covenants has decreased from the previously disclosed ¥900 million to ¥600 million. The covenants prohibit ordinary losses for 2 consecutive periods and equity below 75%. - FY2020-Q3RestatedAnnual report
「During the cumulative period of the third quarter, there were no new business or other risks, nor any material changes to the business or other risks described in the annual securities report for the previous fiscal year.」
The Company states that there have been no new occurrences or significant changes regarding the repayment risk arising from financial covenants under the commitment line. - FY2020-Q2RestatedAnnual report
「During the cumulative second quarter period, there was no new occurrence of business or other risk, nor any material change in the business or other risks described in the securities report for the previous fiscal year.」
The Company states that there have been no new occurrences or significant changes regarding the repayment risk arising from financial covenants under the commitment line. - FY2020-Q1RestatedAnnual report
「During the cumulative first quarter, there were no new business or other risks, nor any material changes to the business and other risks described in the securities report for the previous fiscal year.」
The Company states that there have been no new occurrences or significant changes regarding the repayment risk arising from financial covenants under the commitment line. - FY2019-Q3RestatedAnnual report
「During the cumulative period of the third quarter, there were no new business or other risks, nor any material changes to the business or other risks described in the annual securities report for the previous fiscal year.」
The Company states that there have been no new occurrences or significant changes regarding the repayment risk arising from financial covenants under the commitment line. - FY2019-Q2RestatedAnnual report
「During the cumulative period of the second quarter, there were no new business or other risks, nor any material changes to the business or other risks described in the annual securities report for the previous fiscal year.」
The Company states that there have been no new occurrences or significant changes regarding the repayment risk arising from financial covenants under the commitment line. - FY2019-Q1RestatedAnnual report
「During the cumulative first quarter, there were no new business or other risks, nor any material changes to the business and other risks described in the securities report for the previous fiscal year.」
The Company states that there have been no new occurrences or significant changes regarding the repayment risk arising from financial covenants under the commitment line. - FY2018RestatedAnnual report
「Of the short-term borrowings, the ¥900 million under the commitment line agreement is subject to financial covenants. If any of the covenants below are breached, all obligations under the agreement will become immediately due and payable, and the Company must repay them immediately.」
The Company continues to disclose financial covenants on the ¥900 million commitment line, including ordinary losses for 2 consecutive periods and equity below 75%, as well as the risk of immediate repayment upon a breach. - FY2018-Q3RestatedAnnual report
「During the cumulative period of the third quarter, there were no new business or other risks, nor any material changes to the business or other risks described in the annual securities report for the previous fiscal year.」
The Company states that there have been no new occurrences or significant changes regarding the repayment risk arising from financial covenants under the commitment line. - FY2018-Q2RestatedAnnual report
「During the cumulative period of the second quarter, there were no new business or other risks, nor any material changes to the business or other risks described in the annual securities report for the previous fiscal year.」
The Company states that there have been no new occurrences or significant changes regarding the repayment risk arising from financial covenants under the commitment line. - FY2018-Q1RestatedAnnual report
「During the cumulative first quarter, there were no new business or other risks, nor any material changes to the business and other risks described in the securities report for the previous fiscal year.」
The Company states that there have been no new occurrences or significant changes regarding the repayment risk arising from financial covenants under the commitment line. - FY2017First statedAnnual report
「Fiscal year ended 31 March 2017 Of the short-term borrowings, the ¥900 million commitment line is subject to financial covenants. If any of the following covenants is breached, all obligations under the agreement will become immediately due and payable, and those obligations must be repaid immediately. Financial covenants (i) Ordinary income or loss must not be a loss for 2 consecutive fiscal years (ii) Total net assets must not be less than 75% of total net assets as of the end of the previous fiscal year」
The disclosure identifies for the first time the financial covenants applicable to the ¥900 million commitment line, including ordinary losses for 2 consecutive fiscal years and net assets below 75%, as well as the risk that a breach would cause the loss of the benefit of time and require immediate repayment.