#Japan #Tokyo #Daiwa Securities #JASSO #Social Bond

Daiwa Securities Collaborates with JASSO for Social Bonds

Daiwa Securities Co., Ltd. based in Chiyoda, Tokyo, has announced the upcoming sale of social bonds by the Japan Student Services Organization (JASSO), which are planned to be issued in November 2025. This initiative is targeted at corporate investors across the country who wish to contribute to the enhancement of educational opportunities for students in Japan.

The bonds allow investors to publicly declare their support through investment statements, which will be made available on JASSO's website. Investors will also have the option to link their own homepage to this listing, amplifying their commitment to fostering educational advancement.

Understanding JASSO's Mission

JASSO aims to create a conducive learning environment for students pursuing higher education and to nurture creative talent imbued with rich human qualities. It also focuses on enhancing international mutual understanding. To achieve these goals, JASSO is implementing three major projects:

1. Scholarship Initiatives: JASSO provides several types of financial support. This includes grant-type scholarships, interest-free loans, and interest-bearing loans to assist students who face financial hardships in continuing their studies.
2. Support for International Students: The organization facilitates the acceptance of foreign exchange students and the dispatch of Japanese students to study abroad.
3. Support for Student Life: This encompasses career education, employment support, and assistance for students with disabilities.

With increasing concerns over talent shortages and employee retention in various sectors, JASSO is also advocating a new initiative called the “Scholarship Repayment Assistance Program.” This program allows companies to support their employees by repaying part or all of their outstanding student loans directly to JASSO, marking a shift from previous practices where only employee-to-company support existed. As of April 2021, companies can now remit funds directly to JASSO, a method that is gaining traction among private organizations and local governments.

Strengthening Educational Support Networks

JASSO's initiatives provide a safety net for education, supported by strong financial backing from the government and market-based fundraising through bond issuance. The organization aims to raise substantial funds quarterly, totaling ¥30 billion, or ¥120 billion annually through the issuance of two-year bonds, with all funds earmarked specifically for the second type of scholarship.

Currently, out of 3.58 million students enrolled in higher education, 1.09 million rely on JASSO's loans, highlighting a significant dependency on these funds - approximately one in three students utilizes JASSO scholarships. This bond initiative aligns with the global sustainable development goal (SDG) aimed at ensuring inclusive and equitable quality education for all.

Investors have responded positively to the social bonds offered by JASSO, appreciating the clarity about how the funds will be used for educational purposes. The growing interest from investors has been fueled by favorable interest rate environments, resulting in an increased number of individuals and organizations recognizing the value in owning JASSO bonds. Recent rounds of investment statements show a robust demand, accumulating to over 1,073 declarations as of the last bond issuance—making it the highest among financial institution bonds.

Upcoming Bond Issue Details

The next offering of the JASSO social bonds will be slated for November 2025, with the following key dates outlined:

• - Condition Determination Date: October 2025
• - Payment Date: November 7, 2025
• - Interest Payment Dates: May 20 and November 20 each year, with the first payment in May 2026.
• - Credit Rating: Anticipated ratings of AA+ from R&I and AAA from JCR, equating to the standing of Japanese government bonds.

Investors looking for further information about JASSO social bonds and the purchase process are encouraged to contact their local Daiwa Securities office for assistance. This bond issuance presents a unique opportunity for corporate entities to support the educational landscape in Japan, fostering both immediate and long-term social benefits.