On September 28, 2004, Kyokuyo Shipyard Corporation issued its first-ever corporate bond through private placement. The 100 million yen bond, unsecured and unguaranteed, and with three-year maturity, is fully underwritten by Mizuho Bank Ltd., megabank based on Japan. The company plans to appropriate the proceeds of the issue for working capital.

In order to be an issuer of unsecured and unguaranteed bond, a corporate has to prove its financial healthiness by recording solid results. The required level of financial indices and criterion, including equity ratio and value of total assets, is set much higher than in the case of an ordinary mortgage bond, or a debenture guaranteed by credit guarantee associations. For our financial team, it is certainly a breakthrough.

Obtaining the ISO certificate before any other middle and small classes Japanese shipyards. Or, signing Euro-based contracts directly with foreign shipowners. We have made many technical and commercial breakthroughs that created, we believe, a lead on our competitors. This time, we feel sure that we could extend it with a financial breakthrough.

Kyokuyo will try to further improve our performance in all aspects.