Hokkaido Electric Power Company, Incorporated finalized the pricing on its first public hybrid subordinated bond on Thursday, July 23, 2026, following the June 29 announcement that it intended to issue one. The unsecured bond carries interest-deferral and early-redemption clauses, runs ¥80bn in size, and pays an initial fixed coupon of 3.393% through July 25, 2033. After that date the rate switches to floating, with a step-up applied the day after the 2033 reset.
| Term | Detail |
|---|---|
| Issue size | ¥80bn |
| Initial coupon | 3.393%, fixed until July 25, 2033 |
| Rate after 2033 | Floating, with a step-up applied the day after the reset |
| Payment (settlement) date | July 29, 2026 |
| Legal maturity | July 25, 2063 |
| First call date | July 25, 2033 (discretionary, on any coupon date thereafter) |
| Ratings | R&I: A-; JCR: A |
| Equity credit | 50% (R&I Class 3; JCR Medium) |
The bond's defining feature is not the coupon but the flexibility built into it. Hokkaido Electric can defer some or all of the interest due on any coupon date, entirely at its own discretion, and the bond does not mature until July 25, 2063, a 37-year tail from the July 29, 2026 payment date. The company can call the bond early on any interest payment date from July 25, 2033 onward, but is not obliged to. In a wind-down, the bond ranks below Hokkaido Electric's general creditors but above common shareholders, the standard subordination slot for this kind of instrument.
Those deferral and subordination features are why Rating and Investment Information assigned the bond an A- rating and the Japan Credit Rating Agency assigned A, both a notch or more below what each agency would typically assign Hokkaido Electric's senior unsecured debt structure for this type of instrument. More consequential for the company's balance sheet, both agencies classified half of the issue as equity rather than debt: R&I placed it in its Class 3 category with 50% equity content, and JCR used its own "Medium, 50%" designation. That treatment lets Hokkaido Electric raise ¥80bn while having the agencies count roughly ¥40bn of it toward capital metrics rather than leverage, without diluting shareholders.
SMBC Nikko Securities, Mizuho Securities, Mitsubishi UFJ Morgan Stanley Securities, and Daiwa Securities underwrote the public offering. Mizuho Bank acts as the lead bond administrator alongside Hokuyo Bank, and the Japan Securities Depository Center handles book-entry transfer. Coupons, once the initial fixed period ends, will still be paid twice a year, on January 25 and July 25.
The filing discloses only the terms of this bond. It does not include pricing on Hokkaido Electric's senior unsecured debt, so there is no basis in the disclosure for comparing this coupon against what the company pays on conventional bonds, and none is offered here.