Daiwa House Industry has set terms for ¥230bn of subordinated bonds, to be sold in three tranches under its ¥600bn shelf registration. The shelf registration supplement was filed with the Kinki Local Finance Bureau on October 23, 2026, which is also the subscription date. Payment is scheduled for October 29.
Three tranches, one call ladder
The bonds are unsecured, carry no guarantee and have no financial covenants. Their legal maturities are far out, but the company can redeem each tranche in full from its first call date.
| Tranche | Amount | Legal maturity | First call date | Coupon to first call | Reset margin |
|---|---|---|---|---|---|
| 6th (35-year) | ¥84bn | Oct 29, 2061 | Oct 29, 2031 | 3.255% | 2.050% |
| 7th (37-year) | ¥77bn | Oct 29, 2063 | Oct 29, 2033 | 3.666% | 2.250% |
| 8th (40-year) | ¥69bn | Oct 29, 2066 | Oct 29, 2036 | 4.174% | 2.350% |
After the first call date, the coupon resets each year to the one-year government bond yield plus the margin shown. Interest is paid every April 29 and October 29.
Deferral, subordination and the call
Daiwa House may defer interest at its discretion, with notice at least 12 banking days before the payment date. Deferred interest accrues additional interest. The terms require reasonable efforts to repay it if the company pays dividends on certain junior shares or pays on equal-ranking securities. The bonds rank behind all of Daiwa House's debts other than equal-ranking subordinated debt.
Early redemption is also possible after a tax event or a change in how a rating agency treats the bonds' equity content. Before the first call date the price is 101 per 100; after it, 100.
Daiwa House says it intends not to redeem or buy back a tranche unless it has raised replacement capital in the prior 12 months. After the first call date it may skip that if its debt-to-equity ratio is 0.81x or lower and consolidated equity is at least ¥2.9096tn plus the issue amount.
Where the money goes
Gross proceeds are ¥230bn. After estimated issuance costs of about ¥1.7bn, net proceeds are ¥228.3bn. The supplement says all of it is planned to go toward part of the short-term borrowings that Daiwa House plans to repay by the end of October 2026.
The board approved a programme of up to ¥500bn on September 9, with an issuance window of October 1, 2026 to March 31, 2027. R&I rated the bonds A and JCR rated them A+, both dated October 23. JCR says it would assign a D symbol to a permitted interest suspension even though that is not a default.