Japan’s Sustainable Bond Market Helps Fund Aging Population
Japan is using the corporate bond market to tackle the challenge of having the world’s oldest population.
Daiwa Securities Living Investment Corp. became the latest issuer to tap the market for social debt on Tuesday with the sale of a 10-year bond to refinance investments in facilities for the elderly at a coupon of 0.46%.
Although the amount raised was only 2 billion yen ($17.5 million), the bond follows offers last year from Daiwa House Reit Investment Corp., United Urban Investment Corp. and Kenedix Residential Next Investment Corp. Those note sales collectively totaled 9 billion yen ($78.6 million) to fund housing for seniors, capitalizing on skyrocketing demand for ethical and green bonds globally.
The Japanese government is looking to boost more social bond issuance from the corporate sector. With a bigger proportion of senior citizens relative to the population than any other country, a growing need for more nursing homes and a better safety net for the elderly will increasingly drive demand.
“There will be more social bonds whose proceeds are earmarked for services linked to elderly services, education and healthcare,” said Kazushi Shimizu, head of the sustainability solutions department at Daiwa Securities Co.
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