MOL banks on hybrid bonds
Japanese shipping company MOL has submitted an amended version of the shelf-registration statement regarding the issuance of publicly offered hybrid corporate bonds (no collateral and subordinated corporate bonds) to the director-general of the Kanto Local Finance Bureau.
In order to improve its financial standing and reform its business portfolio, the company is considering fund procurement with hybrid bonds as a part of efforts to enhance its earnings base to achieve a swift return to growth.
Meanwhile, MOL plans to apply the funds procured through the hybrid bonds to a partial fund repayment before the maturity of the hybrid loan.
The hybrid bonds are debt instruments, there is no equity dilution, whereas they are similar to equity offering options to defer interest payments, extremely long-term redemption periods and subordination in liquidation or bankruptcy proceedings.
Therefore, MOL expects that 50% of the amount to be financed will be regarded as capital by the Japan Credit Rating Agency. (cd)