Section 3. Strengthening Our Corporate Structure

3. Issuance of Foreign Bonds

On March 26, 1984, we issued our first foreign bonds—a convertible bond denominated in Swiss francs. These foreign bonds, which followed a Japanese convertible bond we had issued in March 1982, were issued to provide partial financing for the construction of the Awajimachi Daibiru Building and Mita-Nitto Daibiru Building. Under the terms of issuance, the total amount issued was 40 million Swiss francs (approximately 4.265 billion yen in Japanese currency), with an interest rate of 2.125% and a maturity date of March 31, 1989. The conversion terms were based on a conversion price of 365.5 yen, converted from Swiss francs to yen at a fixed conversion rate of 1 Swiss franc to 106.62 yen. Conversion requests, which started on May 1, 1984, proceeded more smoothly than we had expected, with full conversion being completed by July 2, 1985. With the new shares issued upon conversion, the company’s capital reached 5,702,346,213 yen as of the end of July 1985.

The foreign bonds were issued as a private placement, with total individual purchase underwriting carried out by lead manager Union Bank of Switzerland, Japanese co-managers Nomura Bank (Switzerland) Ltd. and Sumitomo Finance, and four other local banks. We were able to raise funds at a coupon rate of 2.125%—a low rate that would have been undesirable in Japanese financial markets. Not only that, but we were able to gain knowledge about fundraising while observing the political and economic situation from a more global perspective, which was a significant achievement for us.