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Finance
Financial Policy
MID REIT, Inc. aims to secure stable earnings and achieve steady growth of its investment assets. To this end, MID REIT formulates and executes financial strategies in a well-planned and responsive manner, while following the financial policies set forth below.
Equity Financing
MID REIT shall undertake additional issues of its investment units, with due consideration given to: (1) continual and stable distributions to unitholders over the long term; (2) the schedule for acquiring real-estate-related assets; (3) its financial standing represented by the loan-to-value (LTV) ratio, which is the ratio of interest-bearing debt to total assets, and other financial indicators; and (4) dilution of investment unit value.
Debt Financing
With the aim of facilitating fund procurement and securing financial stability, MID REIT may engage in debt financing through such means as long- and short-term borrowings, the issue of investment corporation bonds and loans under credit lines. MID REIT also sets LTV levels to better monitor its own capability for acquiring real-estate-related assets. The maximum limit for funds procurement is one trillion yen for borrowings and one trillion yen for the issue of investment corporation bonds. The aggregate maximum total of borrowings and investment corporation bonds, however, shall be one trillion yen.
- LTV Levels
The maximum limit for LTV levels shall be 60%. LTV levels may, however, exceed the limit temporarily due to acquisition of new investment assets and other activities. - Collateral Pledging Policy
MID REIT may collateralize its investment assets or their underlying assets to facilitate fund procurement. - Minimizing Interest Rate Fluctuation Risks
Borrowing periods for long- and short-term borrowings, as well as the combination of fixed and floating interest rates, shall be carefully coordinated. - Minimizing Refinancing Risks
MID REIT shall use a variety of lenders and procurement schemes (borrowings, investment corporation bonds, etc.) while spreading repayment and redemption deadlines for its borrowings and investment corporation bonds. - Financial Futures and Derivative Transactions
For the purpose of hedging interest rate fluctuation and other risks relating to its borrowings and other fund procurement activities, MID REIT may utilize financial futures and derivative transactions.
