Outline of DBJ Financial Services ～ Promoting Foreign Direct Investment in Japan ～

Kazuhiko ShioyamaKazuhiko Shioyama

Chief RepresentativeChief Representative

Representative Office in LondonRepresentative Office in London

DEVELOPMENT BANK OF JAPANDEVELOPMENT BANK OF JAPAN28/11/200228/11/2002

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Overview of DBJ

100% owned by the Japanese Government Carrying out effective policy-based financing

Long-term, fixed-rate, low-interest loan Providing value-adding services

Japanese market information, project structuring, M&A matchmaking and advisory services

Total assets

US$130.0 billion as of March 2002 (17.3 trillion yen) Ratings for DBJ International Bonds

‘AA-’(Standard & Poor’s), ‘Aa1’ (Moody’s)

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DBJ loan programs for foreign-affiliated companies

Established in 1984 Supporting foreign companies penetrating the

Japanese market Accumulated financing to foreign-affiliated

companies:777 loans totaling US$6.3 billion (769 billion yen)

Financing to foreign- affiliated companies ('98- '00)

37.847.4

82.2

3440

54

0102030405060708090

'98 '99 '00

bil. yen

0

10

20

30

40

50

60

Amount of loansNumber of loans

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Target projects

Capital investment conducted in Japan.　 　 Construction of factories, R&D centers, office buildings and equipment,

distribution centers, warehouses, purchase of land for above-mentioned facilities etc.

Merger and acquisitions with Japanese companies

Research and development costs in Japan Rent deposits required of tenants

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Conditions (1) Interest rate 　

The interest rate is fixed at the timing of disbursement basically. The rate is determined in accordance with the term, grace period and the security for the loan. The creditworthiness of the borrower is also considered.

Term and grace period Loan term and grace period is set according to the cash-flow needs of the project. Loan term usually ranges from 10 to 15 years and grace period

from 1 to 3 years.

Loan Amount Maximum 50% of the total project cost. Co-finance with commercial banks

is basically required.

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Conditions (2)

Securities Collateral is required in principle. A guarantor(e.g. parent company) may be required if considered to be necessary. In case financial covenants may be provided.

Payment The repayment method is by equal installment with deferred payment of

interest at fixed rates in principle.

Interest Period

Pay in arrear on outstanding balance, Expected to be paid quarterly

Prepayment Possible with a penalty equal to the NPV( Net Present Value) of the

reinvestment cost to the maturity of the loan.

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DBJ Guarantee Program forCommercial Banks

DBJ Also Offers Guarantees On Commercial Bank Loans To Supplement New Entrants’ Credit

• Amount

– Max. 80% of borrowing related to project, in principle

– Available either independently or together with a DBJ loan (combined upper limit of 80%)

• Guarantee Fee

– 0.3% per annum of outstanding balance

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Examples of DBJ’s Corporate Financing for Overseas

1. Semiconductor & High-Tech fields

- Applied Materials, International Rectifier, Lam Research, Tylan General, Applied Materials, International Rectifier, Lam Research, Tylan General,

Silicon Valley Group Inc., LSI Logic, Motorola, Corning Incorporated, Silicon Valley Group Inc., LSI Logic, Motorola, Corning Incorporated, Tycom Corporation, IBM, Raychem, Tyco International, Nanometorics , Tycom Corporation, IBM, Raychem, Tyco International, Nanometorics , Sequent Computer, Interlink Electronics, MEMC Electronic Materials Inc., Sequent Computer, Interlink Electronics, MEMC Electronic Materials Inc., Siward Crystal Technology, Samsung, Micron TechnologySiward Crystal Technology, Samsung, Micron Technology

2. Automobile Industry

- Raymond,Raymond, Inergy Automotive Systems,Inergy Automotive Systems, Volkswagen, BMW, Robert Volkswagen, BMW, Robert

Bosch,General Motors, Ford, Spraying Systems, Escalator Handrail, Bosch,General Motors, Ford, Spraying Systems, Escalator Handrail, General Electric, AMP, SEW, Stihl, Hyundai, Pohang Steel, Evergreen General Electric, AMP, SEW, Stihl, Hyundai, Pohang Steel, Evergreen Marine, Siderca S.A.I.C.Marine, Siderca S.A.I.C.

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Examples of DBJ’s Corporate Financing for overseas

3. Chemical & Pharmaceutical factories

- Swedeponic, Solvay, UCB, Swedeponic, Solvay, UCB, Bayer, Fresenius, Roche, Eli Lilly, Advanced Bayer, Fresenius, Roche, Eli Lilly, Advanced

Ceramics, Rohm and Haas, R.P. Scherer, Chevron, Du Pont, Proctor & Ceramics, Rohm and Haas, R.P. Scherer, Chevron, Du Pont, Proctor & GambleGamble, , Boston Scientific Corporation, BASF, Degussa-Hüls, Novartis, Boston Scientific Corporation, BASF, Degussa-Hüls, Novartis,

4. Telecommunications

- Fidelity Management ResearchFidelity Management Research

5. Retail

- Carrefour, Virgin EntertainmentCarrefour, Virgin Entertainment ,Toys”R”Us, Starbucks Coffee, Toys”R”Us, Starbucks Coffee,

L.L.Bean, Nike Inc., Pier1 Import, TriumphL.L.Bean, Nike Inc., Pier1 Import, Triumph

6. Real Estate

- Alderney Investments, Pacific Century GroupAlderney Investments, Pacific Century Group

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The Progress of M&A in Japan

Recently the number of M&As by foreign companies is increasing year by year.

In 1996 31 In 1997 51 In 1998 85 In 1999 129 In 2000 175 In 2001 158

0

20406080

100120140160180

95 96 97 98 99 00 01

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Advantage of DBJ’s Programs for M&As

Special emphasis on midmid--sized transactionssized transactions, a segment given low priority in M&A services by commercial investment banks

Long-term, fixed-interest and lengthy grace”take-out financing”, complimentary to commercial banks loan and good source to reduce the capital burden for the work-out stages of the project

Sell / Buy side Advisory (with fee base)

Target Screening, Transaction Execution, etc. Value-adding Matchmaking

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Characteristics of DBJ Matchmaking

Broad network throughout industry, including over 4,000 customers in Japan and abroad (extended over 700 loans for FDI into Japan)

Close Relationships with over 60 regional banks possessing valuable information on the firms within their territory

Close relationships with major law offices and accounting firms which take charge of legal counseling and due diligence

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Recent cross-border transactions

M&A advisory and acquisition financing– Micron Technology (U.S.A.)

• Advised, structured and provided debt finance in relation to the acquisition of the remaining 75% share of KMT Semiconductor from

Kobe Steel

– Siward Crystal Technology (Taiwan)• Advised and provided debt finance for the acquisition of

Meidensha’s quartz crystal business

– Siderca S.A.I.C. (Argentine)• Advised and provided debt finance in connection with the transfer of

the seamless pipe business of NKK (Japan’s second largest steel maker)

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DBJ’s NetworkTOKYO HEAD OFFICE LONDON REPRESENTATIVE OFFICE9-1 Otemachi 1-chome Level 12, City TowerChiyoda-ku, Tokyo 40 Basinghall Street100-0004 Japan London EC2V 5DE UKPhone:81-(0)3-3244-1770 Phone:44-(0)20-7638-6210Fax:81-(0)3-3245-1938 Fax:44-(0)20-7638-6467http://www.dbj.go.jp E-mail:hendy@dbjuk.info

OTHER REPRESENTATIVE OFFICES Washington D.C. Phone: 1-202-331-8696 Fax: 1-202-293-3932 New York Phone: 1-212-221-0708 Fax: 1-212-221-6138 Los Angeles Phone: 1-213-362-2980 Fax: 1-213-362-2982 Frankfurt Phone: 49-(0)69-7191760 Fax: 49-(0)69-71917615 Singapore Phone: 65-2211779 Fax: 65-2211142