Seafood firm plans Japan’s first bond to help ocean

MAJOR Japanese seafood company Maruha Nichiro Corp is planning to sell the country’s first blue bond next month to fund sustainable fisheries. 

The firm mandated Mizuho Securities and Mitsubishi UFJ Morgan Stanley Securities to manage the 5 billion yen (S$49.8 million) offering of 5-year notes, according to a filing. It is the company’s debut bond, and the money raised will go into projects including salmon farming. 

Only a few issuers have sold blue bonds globally, totalling about US$2 billion. That is a fraction of the US$1.5 trillion green debt. Even so, the tiny market is emerging at a time when investors and analysts are increasingly scrutinising the use of funds raised from such debt to ensure that borrowers are not misrepresenting their sustainable bona fides to tap feverish demand. 

Amid a far-reaching market sell-off, the slump this year in blue bonds – which are relatively scarce – has been less than green debt more broadly. The average loss on 7 blue bonds outstanding globally stands at 11.2 per cent, data available on Bloomberg showed. That compares with 28 per cent for a global index of green notes. 

Most of the bond sales have been by sovereigns and international organisations, making a corporate issuance even rarer. Tokyo-based Maruha Nichiro also imports salmon, crab and other fishery products to meet huge demand for seafood in Japan.

The International Finance Corporation is planning to publish a guidance document this autumn, with other global organisations, that would help define eligibility criteria and key performance targets for fundraising in the so-called blue economy. At the moment, the issuance falls under the green bond principles, a set of voluntary guidelines on structure, disclosure and reporting. BLOOMBERG