MIRAI Corporation.

Strong Financial Base and Equity Co-Investment by Sponsors

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Financial Strategy

MIRAI aims to establish a strong financial base by maintaining a conservative LTV ratio and establishing a lender formation comprising mainly mega-bank groups.

 
LTV(Note 1)49.6

Remaining maturity
on debt7.3years

Credit ratings(Note 2)
A+(stable)

As of March 23, 2018

(Note 1) LTV (based on total assets) = Outstanding interest-bearing debt ÷ Total assets. Total asset prior to execution of the borrowings is estimate for the fiscal period ending April 2018 based on the earning estimate announced on December 11, 2017, while that of post execution of the borrowings is the vale obtained by adding acquisition value (inclusive or related expenses) of the three new hotel assets to be acquired (Ise City Hotel Annex, Comfort Hotel Kitakami, Comfort Hotel Nagano) to the total asset prior to execution of the borrowings.
(Note 2) MIRAI obtained a long-term issuer rating ”A+(stable)" from Japan Credit Rating Agency, Ltd. (JCR) and "A(stable)" from Rating and Investment Information, Inc.

Initiative to align the interests of unitholders and sponsors

1. Equity Co-investments

MIRAI aims to align the interests of unitholders, sponsors and the Asset Manager and achieve medium and long-term improvement in unitholders’ value through Equity Co-investments adopted as a governance initiative.

Equity Co-investments by the two sponsors
The sponsors own around 3.4% of the total number of investment units issued by MIRAI.
(Mitsui & Co.: Around 1.7%, IDERA: Around 1.7%)

MIRAI’s strong commitment to improving unitholders’ value

2. Asset management fee structure linked to unitholder profit

Asset management fee I
(based on AUM)
Up to 0.5% per year of total assets
Asset management fee II
(based on DPU)
Adjusted DPU (See Note) x NOI after depreciation x 0.001%(as an upper limit)
Note: Adjusted DPU = Unappropriated retained earnings before deducting Assetmanagement fee 2 / Number of investment units outstanding
Acquisition fee Up to 1.0% of the acquisition price
Disposition fee Up to 1.0% of the disposition price
Merger fee Up to 1.0% of the appraisal value at the time of merger of real-state-related assets held by the counterparty of the merger at the time of merger

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