On June 29, the Japan Bank for International Cooperation (JBIC) will sign an accord with three megabanks on the launch of a credit line worth 15 billion dollars (about 1.65 trillion yen) to extend funds denominated in foreign currencies to Japanese firms looking to carry out mergers and acquisitions overseas. This will be the first time for JBIC to use its own funds to set up a credit line aimed at financing overseas corporate buyouts. This will help megabanks cut their fund procurement costs and make it easier for companies to secure loans at stable interest rates for a longer period of time when they carry out M&As.
The credit line will be jointly set up by MUFJ Bank, Sumitomo Mitsui Banking Corporation and Mizuho Bank for a period of two years and will lend money in dollars and euros for five to ten years through them. For companies to be eligible to loans, they must seek M&As that aim to obtain a controlling stake. They are also eligible to loans if they seek to attain mid- to long-term growth through strategic business partnerships, even though their stakes fall below 50%. (Abridged)