NYK Line issues Japan’s first transition bonds

Japan’s shipowner Nippon Yusen Kaisha (NYK) Line has revealed that it has issued its first transition bonds in the domestic market, becoming the first Japanese firm to do so.

By issuing $183 million transition bonds to secure various funding resources for low carbon, decarbonization solutions, NYK will accelerate its greenhouse gas emission reduction, the company claims.

This issuance has been selected as the first model case for transition finance by Japan’s Ministry of Economy, Trade and Industry.

Transition bonds are a relatively new class of debt instrument used to fund a company’s transition towards reduced environmental impact or lower carbon emissions. 

In 2018, NYK became the world’s first shipping company to issue labeled Green Bonds in the shipping sector.

The proceeds of a green bond are used solely for the purpose of funding environment-friendly projects.

Transition bonds are often issued in fields that would not normally qualify for green bonds, such as large carbon-emitting industries like oil and gas, iron and steel, chemicals, aviation and shipping.