Special Rules for Equity Investments and Asset-Based Lending to Enhance the Fund-Provisioning Measure to Support Strengthening the Foundations for Economic Growth Conducted through the Loan Support Program (Invalid)

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June 14, 2011
Revision: March 13, 2012
April 10, 2012
December 20, 2012
March 11, 2014
March 17, 2015
January 29, 2016
January 31, 2017
January 23, 2018
January 23, 2019

1. Purpose

With the aim of further enhancing financial institutions' efforts to strengthen the foundations for economic growth through the use of a wider range of financial techniques, the Bank established special rules that supplement the "Principal Terms and Conditions for the Fund-Provisioning Measure to Support Strengthening the Foundations for Economic Growth Conducted through the Loan Support Program" (Policy Board Decision on June 15, 2010, hereinafter referred to as the "Principal Terms and Conditions"). The special rules shall be applied when financial institutions make investments and loans with equity-like features (hereinafter referred to as "equity investments") as well as loans without real estate collateral or guarantees that are deemed appropriate by the Bank (hereinafter referred to as "asset-based lending").

2. Amount of Each Loan

The amount extended to each counterparty for each loan is the amount the counterparty wishes to borrow. Notwithstanding 8. of the Principal Terms and Conditions, such amount shall not exceed the maximum amount of loans prescribed in 3. and the unused value of the total standing pool of eligible collateral pledged to the Bank.

3. Maximum Amount of Loans, etc.

(1) Apart from the total amount of loans to each counterparty stipulated in 9.(1) of the Principal Terms and Conditions, the total amount of loans to each counterparty pursuant to the special rules shall not exceed 50 billion yen.
(2) Notwithstanding 9.(2) of the Principal Terms and Conditions, the maximum amount to be lent to each counterparty at each loan disbursement pursuant to the special rules shall be the amount calculated by subtracting the amount in (b) and (c) below from the amount in (a), on a date specified by the Bank.
1. (a) The amount outstanding of equity investments and asset-based lending made by the counterparty on and after April 1, 2010, pursuant to the plan to support strengthening the foundations for economic growth stipulated in 6.
2. (b) Of the amount outstanding of equity investments and asset-based lending that is specified in (a),
  - i) the amount outstanding that is used as the basis for calculating the maximum amount to be lent to each counterparty at each loan disbursement in 9.(2) of the Principal Terms and Conditions.
  - ii) the amount outstanding that is used as the basis for calculating the maximum amount to be lent to each counterparty at each loan disbursement in 3.(2) of the "Special Rules for Small-Lot Investments and Loans to Enhance the Fund-Provisioning Measure to Support Strengthening the Foundations for Economic Growth Conducted through the Loan Support Program" (Policy Board Decision on March 13, 2012).
  - iii) the amount outstanding that is used as the basis for calculating the maximum amount to be lent to each counterparty at each loan disbursement in 8.(2) of the "Special Rules for the U.S. Dollar Lending Arrangement to Enhance the Fund-Provisioning Measure to Support Strengthening the Foundations for Economic Growth Conducted through the Loan Support Program" (Policy Board Decision on April 10, 2012).
3. (c) The amount outstanding of loans to each counterparty disbursed pursuant to the special rules.

4. Prepayment

Notwithstanding 10.(2) of the Principal Terms and Conditions, in case the amount calculated by subtracting the amount in 3.(2)(b) from the amount in the 3.(2)(a) falls short of the amount in 3.(2)(c) for loans disbursed pursuant to these special rules on a day specified by the Bank, the counterparty shall repay the amount equivalent to the shortfall, pursuant to the Bank's relevant rules.

5. Deadline for Applications for New Loans

The date stipulated in 3.(2) shall be not later than March 31, 2020.

6. The Plan to Support Strengthening the Foundations for Economic Growth

Notwithstanding 12. of the Principal Terms and Conditions, the plan shall be formulated by each counterparty for equity investments or asset-based lending, and satisfy the conditions set forth in Annex 1 to the Principal Terms and Conditions. When applying the special rules, the term "funds received, either borrowed or invested from financial institutions, for a period of no less than one year" in 1 of Annex 1 to the Principal Terms and Conditions shall be deemed to be replaced with "equity investments or asset-based lending."

Supplementary Provision

The special rules shall become effective today and shall be valid through June 30, 2024.