Environment

About SBI ARUHI’s Green RMBS

SBI ARUHI’s Green RMBS

SBI ARUHI issued the first Green RMBS (*1) in Japan, procuring funds for the execution of ”ARUHI Super Flat (*2)” housing loans for residential properties that satisfy certain standards on energy saving. SBI ARUHI contributes to the reduction of CO2 emissions by promoting the spread of housing with excellent energy-saving performance through the issuance of Green RMBS.

  • *1 RMBS is an abbreviation of Residential Mortgage-Backed Securities. Refers to securities issued with the backing of housing loan claims. Green RMBS refer to those issued with residential loans for acquiring properties expected to have a high environmental improvement effect as the underlying assets.
  • *2 ”ARUHI Super Flat” is an original SBI ARUHI product using the housing loan insurance (guarantee type) system (Flat 35 (for guarantee program)) in which “the Japan Housing Finance Agency paying an insurance claim to a private-sector financial institution when a customer is unable to repay a housing loan provided by a private-sector financial institution.”

About the ARUHI Green Finance Framework

SBI ARUHI has established the uses of funds procured through Green RMBS and mechanisms and management systems for procuring funds as the ARUHI Green Finance Framework. The framework was assessed by the Japan Credit Rating Agency as conforming to Green Bond Principles (2018), Green Bond Guidelines (2017) and Green Loan Principles, and received an overall evaluation of Green 1 (F), which is the highest evaluation.

Overview of Green RMBS

Overview of Green RMBS
  1. 1

    SBI ARUHI executes the ”ARUHI Super Flat” loan for the customer, and obtains the housing loan claim.

  2. 2

    SBI ARUHI entrusts housing loan claims that conform to the ARUHI Green Finance Framework (*3) to a trust bank, and the trust bank delivers the beneficial interest arising from the claims to SBI ARUHI. This beneficial interest is the Green RMBS.

    *3 Housing loan claims are insured through an agreement between SBI ARUHI and the Japan Housing Finance Agency in case of an unexpected accident occurring with the housing loan.

  3. 3

    SBI ARUHI sells Green RMBS to investors through securities companies, etc. (*4)

    *4 Green RMBS may be sold using the trust ABL method.

  4. 4

    The funds obtained through the sale of Green RMBS are all allocated to the acquisition of housing loans that are the underlying assets of Green RMBS.

Use of Green RMBS funds

Green RMBS are for ARUHI Super Flat loans for residential properties that satisfy the “technical standards on energy saving” and the funds are used for loans to acquire these properties.

technical standards on energy saving of properties covered by Green RMBS (*5)
Program Category Technical standard Applicability
Primary energy consumption grade Insulation grade
New houses
Flat 35 S
ZEH
ZEH Equivalent to 6 Equivalent to 5
Interest Plan A
(Energy saving)
Approved low-carbon housing 6 5
Housing with insulation grade 5 or higher and primary energy consumption grade 6 6 5 or higher
Approved performance improvement plan housing 6 5
Interest Plan B
(Energy saving)
Housing with insulation grade 4 and primary energy consumption grade 6 6 4
Housing with insulation grade 5 or higher and primary energy consumption grade 4 or 5 4 or 5 5 or higher
Interest Plan A
(Durability and modifiability)
Long-life quality housing 6 5
Interest Plan A not mentioned above
Housing with insulation grade 4 or higher and primary energy consumption grade 4 or higher 4 or higher 4 or higher
Housing that meets the building energy consumption performance standards 4 or higher 4 or higher
Interest Plan B not mentioned above
Housing with insulation grade 4 or higher and primary energy consumption grade 4 or higher 4 or higher 4 or higher
Housing that meets the building energy consumption performance standards 4 or higher 4 or higher
Flat 35
Housing with insulation grade 4 or higher and primary energy consumption grade 4 or higher 4 or higher 4 or higher
Housing that meets the building energy consumption performance standards 4 or higher 4 or higher
Flat 35
Regional cooperation type
Regional revitalization
(greening)
Housing with insulation equivalent to grade 6 or 7 - Equivalent to 6 or equivalent to 7
Preowned houses
Flat 35 S
ZEH
ZEH Equivalent to 6 Equivalent to 5
Interest Plan A
(Energy saving)
Approved low-carbon housing 6 5
Housing with insulation grade 4 and primary energy consumption grade 6 6 4
Housing with insulation grade 5 or higher and primary energy consumption grade 4 or higher 4 or higher 5 or higher
Approved performance improvement plan housing 6 5
Interest Plan A
(Durability and modifiability)
Long-life quality housing 6 5
Flat 35
regional cooperation type
Regional revitalization
(greening)
Housing with insulation equivalent to grade 6 or 7 - Equivalent to 6 or equivalent to 7
  • *5 Flat 35 energy efficiency standards apply.

SDGs goals and targets to which Green RMBS contributes

Green RMBS is a project classified under “energy saving” within the green projects defined in the Green Bond Principles, the Green Loan Principles and the Ministry of the Environment’s Green Bond Guidelines, and contribute to the following SDGs goals and targets.

Goal 7: AFFORDABLE AND CLEAN ENERGY

Target 7.3.

By 2030, double the global rate of improvement in energy efficiency

Goal 9: INDUSTRY, INNOVATION AND INFRASTRUCTURE

Target 9.4.

By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes, with all countries taking action in accordance with their respective capabilities

Goal 11: SUSTAINABLE CITIES AND COMMUNITIES

Target 11.6.

By 2030, reduce the adverse per capita environmental impact of cities, including by paying special attention to air quality and municipal and other waste management

Management of funds procured with Green RMBS

All underlying assets of Green RMBS are eligible green assets, and the agreement with the trust bank stipulates that the agreed recovery and early recovery of eligible green assets are reflected in the redemption of principal of the corresponding RMBS by pass through. As a result, there are no unallocated assets, and no special management of funds is required for the balance of Green RMBS. For details, see “JCR Assigns Green 1 (F) to ARUHI Green Finance Framework of SBI ARUHI Corporation” by the Japan Credit Rating Agency.

Green RMBS reporting

The Company intends to disclose the number and total amount of housing loans linked to Green RMBS once annually on its website. If any significant changes are made to the management of the procured funds, the status and response will be reported on the website. For details, see “JCR Assigns Green 1 (F) to ARUHI Green Finance Framework of SBI ARUHI Corporation” by the Japan Credit Rating Agency.

Past issuances of Green RMBS

SBI ARUHI has established the uses of funds procured through Green RMBS and mechanisms and management systems for procuring funds as the ARUHI Green Finance Framework. The framework was assessed by the Japan Credit Rating Agency as conforming to Green Bond Principles (2018), Green Bond Guidelines (2017) and Green Loan Principles, and received an overall evaluation of Green 1 (F), which is the highest evaluation.