Focusing on business opportunities that help achieve a cleaner, healthier and sustainable society.
Hitachi Capital (UK) Plc (HCUK) is a leading financial services company, which provides specialised innovative finance solutions to retail consumers, SMEs, fleet owners, motor dealers and retailers. HCUK’s 1,500+ employees serve over 1.3 million customers in the UK and Europe across its five business units: Consumer Finance, Vehicle Solutions, Business Finance, Invoice Finance and European Vendor Solutions. HCUK will be changing its name in early 2022 to Mitsubishi HC Capital UK PLC and introduce Novuna as a trading style.
HCUK, a wholly owned subsidiary of Mitsubishi HC Capital Inc., one of Japan’s largest non-bank financial institutions, has the mission to make a difference to society by aligning the company’s business to achieve the wide range of sustainability targets set out in the United Nations Sustainable Development Goals (SDGs). In doing so, HCUK focuses on business opportunities that help achieve a cleaner, healthier and sustainable society and has launched numerous projects to help accelerate the transition towards a zero-carbon society.
Amongst other initiatives, the company has set itself the target of 20% of its assets being directly connected to climate action and affordable clean energy within the next five years. The financial services provider is also committed to electrifying 100% of its 62,500+ funded car & small van fleet (3.5t and under), and 50% of its funded van fleet (vehicles over 3.5t) by 2030. Recognising that the transition to Electric Vehicles (EVs) can only be accelerated if consumers have confidence in the charging infrastructure, HCUK is partnering with UK green energy company GRIDSERVE on projects that will provide the backbone for not only the future of electric vehicle charging in the UK but also for the wider energy needs of the UK as the country moves towards producing net-zero greenhouse gas emissions by 2050. HCUK has demonstrated its commitment to GRIDSERVE with a 19.63% equity stake.
Green Bond to finance electric vehicles and build out the UK’s EV charging point infrastructure
To facilitate the funding of green projects such as the provision of leases for Battery Electric Vehicles, Hybrid Solar Farms and Electric Vehicle charging points, HCUK asked NatWest earlier this year to advise and support on the creation of its Green Financing Framework. Following the publication of the framework, it received a Second Party Opinion (SPO) from Sustainalytics, confirming alignment of HCUK’s Green Financing Framework to the Technical Screening Criteria of the EU Taxonomy as well as to ICMA’s Green Bond Principles 2021,
HCUK first issued under the framework in March 2021, through a privately placed $40m 3-year Green MTN, with NatWest acting as sole Dealer. In October, on the back of positive feedback from investors and with continued momentum on the green asset book, the company moved into the public markets – announcing an inaugural €300m 3-year Green public bond. In their role as an Active Bookrunner, the NatWest team supported HCUK in engaging with the investor community to present their new framework and the characteristics of its debut public Green Bond in detail
The close dialogue paid off: Investor feedback was extremely positive with strong indications of interest and specific compliments on the ‘dark green’ nature and simplicity of the Use of Proceeds. Building an orderbook of over €1.1bn, HCUK were able to tighten pricing significantly, pricing with a final size of €325m and a coupon of 0%.
The Green Bond’s proceeds will go towards financing electric and low carbon Hybrid vehicles, as well as towards the build out of the UK’s EV charging point infrastructure, including electric forecourts which use a combination of solar and battery technology.
Close relationship and ongoing dialogue ensure delivery of key milestones
Luke Hasham-Smith, Corporate Financing & Risk Solutions, NatWest, commented:
“We are really proud to have continued our sustainable finance work with HCUK, supporting with the very successful issuance of their first public Green Bond. The Framework received very positive feedback with investors really engaging with the quality and clarity of the Use of Proceeds. This transaction is also great example for how we put the whole of NatWest to work for our customers with our Financing and Risk Solutions, Syndicate and Sustainable Finance teams collaborating seamlessly to help deliver a fantastic result.”
Dr Arthur Krebbers, Head of Sustainable Finance Corporates, NatWest, commented
“Hitachi Capital UK’s inaugural public green bond marks another important milestone for the UK sustainable finance market. It is issued off a very focused framework, that clearly stipulates the company’s role in driving the electrification of the country’s vehicles and transportation infrastructure.”
Sam Robinson, Deputy Treasurer, Hitachi Capital (UK) PLC, commented
“We have been on a journey over the past few years as we developed our sustainable financing and reporting. Having the support from the NatWest team not only to develop our Green Financing Framework but also their feedback on our ESG report has been invaluable. We hope to continue working with NatWest as we continue on our ESG journey.”
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