The main reason for raising funds by issuing corporate bonds is to maximize our debt capacity by diversifying our financing sources.

With M&A as the core of our growth strategy, we have maintained financial discipline and continued to grow by striking a good balance between debt financing, mainly through bank loans, equity financing through follow-on offerings, and stock deal M&A.

We have historically preferred to finance our M&A transactions using a “bridge loan” – a temporary borrowing of acquisition funds from a small number of banks – from the perspective of speed and information management, and have executed past borrowings accordingly.

For a bank which provides a short-term “bridge loan,” a key factor in deciding whether to approve the loan is the assurance of whether the “bridge loan” can be refinanced into a long-term “permanent loan.” From this perspective, we believe that the ability to utilize (not only bank financing but also) corporate bonds for “permanent loans” will lead to maximization of debt capacity.

Moreover, we believe that diversifying financing sources is also important from the perspective that it leads to increased negotiating power with financial institutions.

Furthermore, although our company is currently only in its eighth year since founding, we believe that the smooth accumulation of future earnings will allow our current investment-grade credit rating of “BBB+” from Japan Credit Rating Agency, Ltd. (JCR) to rise to the “A” rating zone – the volume zone of the corporate bond market – ultimately leading to the maximization of our debt capacity.