Outline of DBJ Financial Services
～ Promoting Foreign Direct Investment in Japan～
Kazuhiko Shioyama
Chief Representative
Representative Office in London
DEVELOPMENT BANK OF JAPAN
28/11/2002
Overview of DBJ


100% owned by the Japanese Government
Carrying out effective policy-based financing
Long-term, fixed-rate, low-interest loan

Providing value-adding services
Japanese market information, project structuring, M&A
matchmaking and advisory services

Total assets
US$130.0 billion as of March 2002 (17.3 trillion yen)

Ratings for DBJ International Bonds
‘AA-
’(Standard & Poor’s), ‘Aa1’ (Moody’s)
2
DBJ loan programs for
foreign-affiliated companies


Established in 1984
Supporting foreign companies penetrating the
Japanese market
Accumulated financing to foreign-affiliated
companies:
777 loans totaling US$6.3 billion (769 billion yen)
Fi n an c i n g t o fo r e i gn - affi l i at e d c o m pan i e s (' 9 8 - ' 0 0 )
bil. yen

90
80
70
60
50
40
30
20
10
0
54
60
50
40
40
34
82.2
37.8
30
Amount of loans
Number of loans
20
47.4
10
0
'98
'99
'00
3
Target projects
 Capital
investment conducted in Japan.
Construction of factories, R&D centers, office buildings and equipment,
distribution centers, warehouses, purchase of land for above-mentioned
facilities etc.
 Merger
and acquisitions with Japanese
companies
 Research and development costs in Japan
 Rent deposits required of tenants
4
Conditions (1)

Interest rate
The interest rate is fixed at the timing of disbursement basically. The
rate is determined in accordance with the term, grace period and the
security for the loan. The creditworthiness of the borrower is also
considered.

Term and grace period
Loan term and grace period is set according to the cash-flow needs of
the project. Loan term usually ranges from 10 to 15 years and grace
period from 1 to 3 years.

Loan Amount
Maximum 50% of the total project cost. Co-finance with commercial
banks is basically required.
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Conditions (2)

Securities
Collateral is required in principle. A guarantor(e.g. parent company) may
be required if considered to be necessary. In case financial covenants may
be provided.

Payment
The repayment method is by equal installment with deferred payment of
interest at fixed rates in principle.

Interest Period
Pay in arrear on outstanding balance, Expected to be paid quarterly

Prepayment
Possible with a penalty equal to the NPV( Net Present Value) of the
reinvestment cost to the maturity of the loan.
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DBJ Guarantee Program for
Commercial Banks
DBJ Also Offers Guarantees On Commercial
Bank Loans To Supplement New Entrants’
Credit
•
•
Amount
– Max. 80% of borrowing related to project, in principle
– Available either independently or together with a DBJ
loan (combined upper limit of 80%)
Guarantee Fee
– 0.3% per annum of outstanding balance
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Examples of DBJ’s
Corporate Financing for Overseas
1. Semiconductor & High-Tech fields
- Applied Materials, International Rectifier, Lam Research, Tylan General,
Silicon Valley Group Inc., LSI Logic, Motorola, Corning Incorporated,
Tycom Corporation, IBM, Raychem, Tyco International, Nanometorics ,
Sequent Computer, Interlink Electronics, MEMC Electronic Materials Inc.,
Siward Crystal Technology, Samsung, Micron Technology
2. Automobile Industry
- Raymond, Inergy Automotive Systems, Volkswagen, BMW, Robert
Bosch,General Motors, Ford, Spraying Systems, Escalator Handrail,
General Electric, AMP, SEW, Stihl, Hyundai, Pohang Steel, Evergreen
Marine, Siderca S.A.I.C.
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Examples of DBJ’s
Corporate Financing for overseas
3. Chemical & Pharmaceutical factories
- Swedeponic, Solvay, UCB, Bayer, Fresenius, Roche, Eli Lilly, Advanced
Ceramics, Rohm and Haas, R.P. Scherer, Chevron, Du Pont, Proctor &
Gamble, Boston Scientific Corporation, BASF, Degussa-Hüls, Novartis,
4. Telecommunications
- Fidelity Management Research
5. Retail
- Carrefour, Virgin Entertainment ,Toys”R”Us, Starbucks Coffee, L.L.Bean,
Nike Inc., Pier1 Import, Triumph
6. Real Estate
- Alderney Investments, Pacific Century Group
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The Progress of M&A in Japan

Recently the number of
M&As by foreign companies
is increasing year by year.
In 1996
In 1997
In 1998
In 1999
In 2000
In 2001
31
51
85
129
175
158
180
160
140
120
100
80
60
40
20
0
95
96
97
98
99
00
01
10
Advantage of DBJ’s
Programs for M&As




Special emphasis on mid-sized transactions, a segment
given low priority in M&A services by commercial
investment banks
Long-term, fixed-interest and lengthy grace”take-out
financing”, complimentary to commercial banks loan and
good source to reduce the capital burden for the work-out
stages of the project
Sell / Buy side Advisory (with fee base)
Target Screening, Transaction Execution, etc.
Value-adding Matchmaking
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Characteristics of DBJ
Matchmaking

Broad network throughout industry, including over 4,000
customers in Japan and abroad (extended over 700 loans
for FDI into Japan)

Close Relationships with over 60 regional banks
possessing valuable information on the firms within their
territory

Close relationships with major law offices and accounting
firms which take charge of legal counseling and due
diligence
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Recent cross-border transactions
M&A advisory and acquisition financing
– Micron Technology (U.S.A.)
• Advised, structured and provided debt finance in relation to the
acquisition of the remaining 75% share of KMT Semiconductor from
Kobe Steel
– Siward Crystal Technology (Taiwan)
• Advised and provided debt finance for the acquisition of
Meidensha’s quartz crystal business
– Siderca S.A.I.C. (Argentine)
• Advised and provided debt finance in connection with the transfer of
the seamless pipe business of NKK (Japan’s second largest steel
maker)
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DBJ’s Network
TOKYO HEAD OFFICE
9-1 Otemachi 1-chome
Chiyoda-ku, Tokyo
100-0004 Japan
Phone:81-(0)3-3244-1770
Fax:81-(0)3-3245-1938
http://www.dbj.go.jp
LONDON REPRESENTATIVE
OFFICE
Level 12, City Tower
40 Basinghall Street
London EC2V 5DE UK
Phone:44-(0)20-7638-6210
Fax:44-(0)20-7638-6467
E-mail:hendy@dbjuk.info
OTHER REPRESENTATIVE OFFICES
Washington D.C. Phone: 1-202-331-8696 Fax: 1-202-293-3932
New York
Phone: 1-212-221-0708 Fax: 1-212-221-6138
Los Angeles
Phone: 1-213-362-2980 Fax: 1-213-362-2982
Frankfurt
Phone: 49-(0)69-7191760 Fax: 49-(0)69-71917615
Singapore
Phone: 65-2211779
Fax: 65-2211142
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