United Urban Investment Corporation

Securities Code

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Financial Policies

United Urban has established the following financing policy.

Debt Financing (Loans, Corporate Bonds, etc.)

  1. In order to conduct efficient asset management and realize stable management, United Urban is to make borrowing from financial institutions or issue corporate bonds as funds for acquisition of specified assets, payment of construction costs on real estate and real estate related to trust beneficial interests for lease, redemption of lease deposits and security deposits, payment of cash distributions, payment of expenses, repayment of debts including borrowings and corporate bond, as well as for working funds. However, neither borrowings nor corporate bonds shall exceed 1 trillion yen, and the combined amounts of borrowings and corporate bonds shall also not exceed 1 trillion yen.
  2. When conducting borrowings based on the above 1., United Urban borrow only from qualified institutional investors as defined in the Financial Instruments and Exchange Act.
  3. When conducting borrowings based on the above 1. the asset management company shall select efficient financing methods in terms of borrowing periods, fixed or variable interest rates on borrowings and other factors. In doing so, it shall give broad and deep consideration to the trends in the financial and capital market, interest rate trends, the capital configuration of United Urban or the impact on existing unitholders, as well as forecasting changes in economic and social conditions for the future, etc.
  4. In order to cope with the needs on acquisition of specified assets, return of deposits from tenants, working fund requirements, etc., instantly and flexibly or securing its liquidity in hand, United Urban will study the commitment facilities which ensure its future borrowing at its discretion and will enter into such facilities as needed, taking into consideration of real estate and financial market trends.
  5. United Urban can use investment assets as a collateral for making borrowings and issuing corporate bonds.
  6. United Urban is to keep its loan-to-value (LTV) ratio, the proportion of the balance of its borrowings and outstanding corporate bonds issued against its total assets (Note), at 60% or lower. However, the LTV may temporarily surpass this figure in accordance with asset acquisitions and fluctuations in appraisal values of the portfolio.
(Note) "Total assets" means the amount of the Assets in the balance sheet as of the end of the fiscal period nearest to the date. For the value of specified real estate assets, the amount shall be obtained by adjusting the book value at the end of the fiscal period of the specified real estate assets with the difference between the value calculated based on the appraisal value (including price surveys conducted by real estate appraisers using the same methods for appraisal) and the book value at the end of the fiscal period.

⇒ Please refer to "Track-Records of LTV" page.

Equity Financing (Issuance of Additional Investment Units, etc.)

Issuance of investment units additionally shall be conducted as necessary, with considerations on the dilution of the investment units (lowering of the proportion of the equity in investment units held by unitholders as a result of issuing new investment units).

Acquisition and Cancellation of Treasury Investment Units

From the perspective of improvement of unitholders' value over the medium to long term, United Urban may consider acquisition and cancellation of treasury investment units as necessary in view of the level of invest unit price, the status of cash on hand, the trend of financial market, and its financial situation. In case United Urban acquires or cancels treasury investment units, its volume, its influence on the market and other factors shall be fully taken into consideration.

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