Panasonic Holdings Sets Terms on 100 Billion Yen of Hybrid Bonds

Panasonic Holdings Corporation on August 28, 2026 determined the terms and conditions for two series of hybrid bonds (subordinated bonds), setting an initial coupon rate of 3.455% per annum on a 70 billion yen fourth series and 4.188% per annum on a 30 billion yen fifth series, the company announced.

The Osaka-based company set the aggregate principal amount to be issued at 70 billion yen for its Fourth unsecured subordinated bonds with optional interest payment deferral and early redemption provisions and 30 billion yen for its Fifth unsecured subordinated bonds with optional interest payment deferral and early redemption provisions. Both series carry a denomination of 100 million yen per bond and an issue price of 100% of the principal amount. The payment date for both series is September 3, 2026.

Interest payment dates are April 14 and October 14 of each year, with the first interest payment date on April 14, 2027. The Fourth series matures on September 3, 2056, and the Fifth series matures on October 14, 2056.

Coupon Structure and Redemption Terms

For the Fourth series, the fixed interest rate applies from the day after September 3, 2026 to October 14, 2032, with a variable interest rate from the day after October 14, 2032; step-up interest rates apply from the day after October 14, 2036 and the day after October 14, 2052. For the Fifth series, the fixed interest rate applies from the day after September 3, 2026 to October 14, 2036, with a variable interest rate from the day after October 14, 2036 and a step-up interest rate applied from the day after October 14, 2036.

The company may, at its option, redeem the Fourth series on any interest payment date on or after October 14, 2032, and the Fifth series on any interest payment date on or after October 14, 2036. For both series, early redemption is also permitted upon the occurrence and continuation of a taxation event or capital event on or after the payment date.

The bonds include an optional interest deferral feature. “The Company may, at its option, defer the payment of interest, in whole or in part, in respect of the Bonds that would otherwise be due to be paid on an interest payment date,” the release states. On priority, it states: “The Bonds rank subordinated to general senior debt and senior to common stock of the Company.”

Rating and Investment Information, Inc. assigned a BBB+ rating to the bonds. The bonds carry 50% equity credit for the financing amount, as assigned by Rating and Investment Information, Inc. and S&P Global Ratings Japan Inc., according to the release.

Refinancing of 2021 Hybrid Bonds

The company intends to use the proceeds from the bond issues for the redemption of its First unsecured subordinated bonds with optional interest payment deferral and early redemption provisions. The company set up a shelf registration for the issue of bonds with a maximum possible amount of 500 billion yen on November 13, 2024.

In an August 3, 2026 announcement, the company said it will exercise its option for early redemption of the 1st Hybrid Bonds, which were issued on October 14, 2021, on the first optional redemption date of October 14, 2026. The 1st Hybrid Bonds total 150 billion yen.

The company raised a total of 400 billion yen through the issuance of hybrid bonds on October 14, 2021 to repay a bridge loan incurred in connection with the acquisition of an additional 80% equity interest in Blue Yonder, which was completed on September 16, 2021 (U.S. time), according to the August 3 release.

Alongside the bond offering, the company concluded a contract for a hybrid loan (subordinated loan) of 50 billion yen, with a closing date of August 3, 2026, a drawdown date of October 14, 2026, and a maturity date of October 14, 2056. The loan carries a BBB+ rating from Rating and Investment Information, Inc. and ranks pari passu with the company’s existing subordinated hybrid bonds and the bonds. The company may, at its option, make prepayments on any interest payment date upon prior notice on or after October 14, 2032, or upon the occurrence and continuation of a taxation event or capital event on or after the drawdown date, and it may, at its option, defer the payment of interest, in whole or in part. The company also filed an amended shelf registration statement regarding the public offering of the bonds with the Director-General of the Kanto Local Finance Bureau.

The August 3 announcement had stated that the aggregate principal amount to be issued across the two series would be 100 billion yen and that specific terms, including the aggregate principal amount, issue price, coupon rate and date of issue, would be determined in consideration of demand, interest rate trend and other conditions.

The loan and the bonds are a form of hybrid financing that has characteristics of both debt and equity, the company said, similar to equity in features including optional deferral of interest payments, extremely long maturities, and subordination in the event of liquidation or bankruptcy proceedings. If the company prepays the loan before its scheduled maturity or redeems or purchases the bonds before their maturity date, it intends to raise funds through the issuance of common stock or securities or debt approved by the rating agencies as having equity credit equal to or higher than the equity credit of the loan and the bonds, within a 360-day period ending on or prior to the prepayment or the early redemption. When the prepayment or the early redemption is scheduled on or after the first call date, the company may decide not to raise funds through the issuance of replacement securities in cases where certain financial conditions are met, among other cases, according to the release.

Founded in 1918, the Panasonic Group consists of Panasonic Holdings Corporation, seven operating companies and affiliates within Japan and overseas, with businesses spanning consumer electronics, devices, B2B solutions, heating and cooling, electrical equipment and lighting, and energy. Panasonic Holdings Corporation reported consolidated net sales of 8,048.7 billion yen for the year ended March 31, 2026.

The company said the press release does not constitute an offer of any securities for sale and was prepared for the purpose of publicly announcing the terms of the hybrid bond issuance in Japan and not for the purpose of soliciting investment. The securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration, the company said.