NYK to issue more transition bonds to fund LNG-powered vessels

This marks NYK’s sixth issuance of such bonds, with detailed issuance conditions to be announced at a later date, according to a NYK statement.

NYK said transition bonds are designed to “facilitate the transition to a low-carbon society.”

The funds raised will be allocated to projects aligned with NYK’s medium-term management plan.

NYK said these projects emphasize long-term transition strategies that contribute to decarbonization, including investments in LNG-fueled vessels.

“Since issuing the shipping industry’s first green bonds in 2018 and subsequently Japan’s first transition bonds in 2021, we have been at the forefront of sustainable finance,” the company said.

“Through the issuance of these transition bonds, NYK aims to accelerate our growth strategy anchored in sustainable management and further enhance recognition among a broad range of stakeholders,” the company added.

According to NYK’s latest financial report, it had 27 LNG-fueled vessels and two LNG bunkering vessels in its fleet at the end of March this year.

This includes 14 LNG-powered car carriers, 10 LNG-powered bulkers, two LNG-powered shuttle tankers, and one LNG-powered cruise ship.

Out of these vessels, 23 ships are owned or co-owned and four are chartered.

NYK said that total investment over its four-year plan period increased from the initial 1.2 trillion yen ($7.62 billion) to approximately 1.6 trillion yen ($10.16 billion) by capturing further growth opportunities.

Out of these, 760 billion yen ($4.82 billion) will be invested in the expansion of NYK’s LNG carrier fleet, in LNG upstream projects, into NYK Energy Ocean, and fleet replacement.

NYK said that 670 billion yen ($4.25 billion) will be invested in M&A by Yusen Logistics (including the acquisition of Healthcare Logistics Business of Walden Group) and LNG-fueled fleet expansion.