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February 24, 2000
Mitsui Fudosan Co., Ltd. |
With the partnership of
Sakura Bank Co., Ltd., Sakura Security Co., Ltd.,
Tokyo Maritime Fire Insurance Co., Ltd., Mitsui Fudosan Co.,
Ltd. has erected a securitization scheme for the condominium
development fund.
-- Not only the condominium business will have access to the
direct financing, but also it enhances the non-asset business
by harnessing the companies' portfolio.
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Mitsui Fudosan with the partnership of Sakura Bank, Sakura
Security and Tokyo Maritime Fire Insurance has exploited
a special purpose company (named Millennium Residential
SPC) in accordance with the SPC law, and has erected a securitization
scheme to recruit development fund for developing condominiums.
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With this scheme, Mitsui Fudosan will raise funds by transferring
the common ownership equity, of lands and/or buildings,
of developing condominiums (8 buildings) to SPC. The SPC
will issue the specified bonds (Aaa: 9.5 billion yen, Aa2:
1 billion yen, no rating: approximately 1.2 billion yen,
total of 11.7 billion yen *) and pay the sold amount (approximately
11 billion yen) to Mitsui Fudosan. The SPC and we, Mitsui
Fudosan will sell those condominiums as the joint venders.
SPC will use the amount received from purchasers as the
capital to appropriate for redemption and interest payment
of the specified corporate bonds. The specified corporate
bonds are scheduled to be issued on March 2000. Sakura Security
will distribute the issued bonds to institutional investors,
and Sakura Bank will manage them as the management company
of the corporate bonds.
(* Preliminary ratings are given to the bonds listed with
ratings by Moody's Investors Service.)
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| As for this specified corporate bonds, we have secured measures
to complement the credibility guaranteed by Tokyo Maritime
Fire Insurance for the liabilities of property at the time
of transaction from Mitsui Fudosan to SPC. Although the bond
purchasing investors bear the marketing risk from condominium
sales, the notable feature of these bonds are the high ratings,
including triple As, of eligible investment being grated due
to the past experiences and performances of Mitsui Fudosan
in its condominium businesses. |
| There has been precedents of securitization of the leasing
assets, mainly of office buildings, however, this is the first
time attempt in Japan to exploit SPC law on the developing
real estate, by pooling condominiums while still in developing
stage and merchandising them for investments. This opened
a way for direct financing in the condominium business, and
it is very significant in particular as to create investing
opportunities of developing real estates for Japanese real-estate
securitization market. |
| For the corporations considering disposal of holding estates
for betterment of financial constitution, exploiting this
scheme in partnership with Mitsui Fudosan will not only enables
them to sell lands to SPC and collect funds in short period
of time, but also gives an advantage to harness merchandising
planning and sales ability of Mitsui Fudosan in its condominium
businesses, which gives opportunities to profit from the condominium
development, otherwise not available just by disposing property
for condominium developments. |
| This also gives new business opportunities for Mitsui Fudosan,
which goes along side with our promoting policy of expanding
and enhancing "non-asset businesses". Our aim is to gain new
profits through the condominium businesses with lessened financial
burdens and more efficiency, to maximize the wealth of knowledge
that we have obtained in the past. |
| Mitsui Fudosan has been taking positive steps to address
securitization of the real estate, since the establishment
of the Real Estate Securitization Unit in 1999. We will continue
to develop this new field, which blends the fields of real
estate and financing by harnessing the knowledge and experiences
of the real estate professions. |
| Conceptual Layout |
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* Mitsui Fudosan, a joint vendor with SPC, will take
all liabilities and obligations of SPC after the delivery
of condominiums, such as with maintenance warranties and
services.
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| List of Properties for Securitization and the Schedule |
Name of Property
(Tentative name) |
Address |
Number of
units planned |
Lot Size |
Construction Starts |
Completion |
| Tsurumaki Project |
Setagaya-ku, Tokyo |
83 |
3,309m2 |
February 2000 |
April 2001 |
| Himonya Project |
Meguro-ku, Tokyo |
64 |
2,882m2 |
February 2000 |
March 2001 |
| Sakuragaoka Project |
Setagaya-ku, Tokyo |
32 |
1,897m2 |
March 2000 |
March 2001 |
| Akabane-nishi Project |
Kita-ku, Tokyo |
75 |
2,891m2 |
January 2000 |
February 2001 |
| Mukogaoka-Yuen Project |
Takatsu-ku,
Kawasaki-shi,
Kanagawa-ken |
28 |
1,143m2 |
February 2000 |
January 2001 |
| Takatsu Project |
Takatsu-ku,
Kawasaki-shi,
Kanagawa-ken |
86 |
3,561m2 |
April 2000 |
April 2001 |
| Ichikawa-Suehiro Project |
Ichikawa-shi, Chiba-ken |
41 |
1,697m2 |
February 2000 |
November 2000 |
| Ohmiya Taisei Project |
Omiya-shi, Saitama-ken |
75 |
3,407m2 |
January 2000 |
February 2001 |
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| Schedule |
| Issuance of corporate bondMarch
2000 |
| Legal redemptionOctober
2001(scheduled redemption:June 2001) |
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