International Healthway Corporation (IHC), a Singapore-listed integrated healthcare services and facilities provider, has solved the sword of Damocles of its Japanese financing. It has sold ¥10 billion (US$88.2 million) three-year floating rate notes at three-month yen Libor plus 1.03% to regular supporter Shinsei Bank.

Proceeds will be used to refinance IHC’s outstanding TMK bonds. These carried a floating interest rate of three-month yen Libor plus 3.20%, and so the group has cut 217bp off its borrowing costs.

IHC owns 12 nursing homes and one annex in Japan. Their acquisition  was initially partially funded through the issuance of TMK bonds in 2013, and refinanced via further TMK bonds in 2016. That paper was entirely taken by Shinsei. In January this year, IHC agreed a three-year mezz loan of up to ¥8 billion with a “major international” unnamed bank to help refinance the 2019 TMK bonds.

This now completes IHC’s ¥18 million financing needs for the year.

TMKs or tokutei mokuteki kaisha are a form of Japanese corporation that is taxed like a REIT and used to hold property in Japan. Under their structure they must issue bonds or preferred shares.