Create Social Value / Pursue Economic Value

Taki (SMBC Corporate Research Dept.)

I am in charge of analyst work where I check the credit of businesses seeking large loans, and in recent years I have felt an increase in consultations regarding large MBOs and M&As as corporate actions have become more active. I believe this is due to the spread of the Corporate Governance Code and the review of market segments at the Tokyo Stock Exchange, which have prompted corporate management strategies to shift more toward emphasizing shareholders and corporate value.

Ichikawa (SMBC Tokyo Corporate Banking Dept.2)

Recognizing such changes, SMBC Group is making various proposals to support customers’ corporate actions. I am in charge of major companies in the semiconductor industry, and in September 2024, KIOXIA Holdings (hereafter, KIOXIA HD) and a syndicate of banks including SMBC concluded a credit line agreement using a new finance scheme targeting semiconductor manufacturing equipment, etc.

Mori (SMBC Strategic Corporate Banking Dept.)

KIOXIA HD is aiming to list on the Tokyo Stock Exchange and needed to present a financial strategy to investors, including refinancing existing borrowings and raising funds for growth strategies. In the process of considering support for such fundraising, we faced a situation where, because the company was receiving government subsidies for the semiconductor industry, the transfer of ownership of subsidized equipment was restricted, making it impossible to apply a standard leasing contract. In response, we decided to build a new finance scheme focusing on the value of the equipment.

Matsukihira (SMBC Asset Finance Dept.)

In this financing, the method of valuing movable assets and the approach to management during the contract period were key issues. On this point, SMFL and SMFL Mirai Partners had expertise not available to banks, which was a major help in advancing the project. For management during the contract period, there was a problem in that periodic on-site visual inspections at the factory by bankers alone could not fully grasp the detailed status of the equipment. However, in this case, because a representative from SMFL Mirai Partners was stationed at the factory, it was possible to accurately understand the status of the equipment, enabling precise equipment evaluation and management during the contract period.

Shimoda (SMFL Mirai Partners)

SMFL Mirai Partners has long been engaged in the used trading of semiconductor manufacturing equipment, accumulating know-how in property evaluation and management during the contract period based on actual transactions. In this finance scheme, we leveraged our expertise in physical assets to build a new business model that earns compensation by providing movable asset collateral evaluation and management during the contract period. We are very pleased to be able to return the new added value created through deeper group collaboration to our customers, and ultimately contribute to the growth of the semiconductor industry.

Satsuka (SMFL)

In taking up credit at SMFL, we cleared examination issues based on Mr. Taki’s research report and information sharing from Mr. Ichikawa. There were many other legal issues and contract clauses to sort out, and time was limited toward the listing, but by working closely with SMBC, we were able to close the deal. We have also built a framework to horizontally deploy similar schemes for future cases.

Ichikawa (SMBC Tokyo Corporate Banking Dept.2)

At times, we had tough discussions with customers, but in the end, we were able to provide solutions to their management issues, and I believe this was a case that contributed to our management philosophy of growing together with customers.

Currently, policy interest rates are being raised in stages, and customers’ fundraising methods are diversifying in a world with interest rates. Taking into account changes in the environment, we will strive to understand management issues through dialogue with each customer and provide value-added solutions like the KIOXIA HD project.

Taki (SMBC Corporate Research Dept.)

Through this collaboration, I have once again recognized the importance of leveraging expertise from a medium- to long-term perspective, not just for one-off project research. Going forward, I will proactively engage in strategic proposals for customers and research on industries and fields where new risk taking is expected, and through supporting corporate growth, contribute to the materiality of Japan’s regrowth.