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Kenedix Office Investment : Notice Concerning Debt Financing (Series 164) and the Execution of Interest Rate Swap Agreements

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06/12/2019 | 03:34am EDT

Translation of Japanese Original

June 12, 2019

To All Concerned Parties

REIT Issuer:

Kenedix Office Investment Corporation

Jiro Takeda, Executive Director

(Securities Code: 8972)

Asset Management Company:

Kenedix Real Estate Fund Management, Inc.

Masahiko Tajima, President & CEO

Inquiries:

Hiroaki Momoi

Head of Planning Division

Office REIT Department

TEL: +81-3-5157-6010

Notice Concerning Debt Financing (Series 164) and

the Execution of Interest Rate Swap Agreements

Kenedix Office Investment Corporation ("the Investment Corporation") has announced today, that the Investment Corporation decided to undertake the debt financing (total of 3,000 million yen) and the execution of interest rate swap agreements.

Please see below for the details.

1. Outline of Debt Financing

Interest Rate

Contract

Drawdown

Principal

Collateral

Series

Lender

Amount

Repayment

Repayment

(Note 1) (Note 2)

Date

Date

Date (Note 1)

Method

500

Base rate

Sumitomo Mitsui

(JPY TIBOR

June 30,

164-A

million

Trust Bank, Limited

for 3 month)

2023

yen

+0.27000%

500

Base rate

(JPY TIBOR

December 28,

Unsecured,

164-B

Resona Bank, Limited

million

for 3 month)

2026

unguaranteed

yen

+0.46000%

June 12,

June 14,

Repayment

2019

2019

of principal

1,000

0.60500%

Sumitomo Life Insurance

April 30,

in full on

164-C

million

Company

Fixed interest rate

2027

maturity date

yen

1,000

Base rate

Sumitomo Mitsui

(JPY TIBOR

March 31,

164-D

million

Banking Corporation

for 3 month)

2029

yen

+0.59000%

Note 1: The first interest payment for debt financing with floating interest rate in Series 164 is due at the end of June 2019, and on the last day of every 3 months thereafter with the principal repayment day. The first interest payment of Series 164-C is due at the end of October 2019, and on the last day of every 6 months thereafter with the principal repayment day. If each interest payment day or the principal repayment day is a non-business day, then the interest payment or the principal repayment will be due on the next business day and if that next business day is in the next month, then previous business day will be applied.

Note 2: The base rate that is applied during interest period for the interest due on each interest payment date for debt financing with floating interest rate shall be calculated based on Japanese Yen TIBOR for 3 months, while Japanese Yen TIBOR for 1 months rate only for the first interest payment, which the JBA TIBOR Administration ("the JBATA") releases two business days before each interest payment date. The Japanese Yen TIBOR of the JBATA is available on the JBATA website (http://www.jbatibor.or.jp/english/rate/).

1

2. Purpose of Debt Financing

Series 164 is to apply the fund towards a part of acquisition funds and related costs for Chofu Center Building to be acquired on June 14, 2019. In addition, The Investment Corporation intends to newly undertake the debt financing

from Sumitomo Life Insurance Company as a new lender to diverse and expand its lenders.

Note: For details on the acquisition, please refer to the press release, "Notice Concerning Acquisition of Property (Chofu Center Building)" dated June 12, 2019.

3. Interest Rate Swap Agreement

  1. Purpose
    For a hedge against possible increases in future interest rate of Series 164.
  2. Details of the Interest Rate Swap Agreement

Series

164-A

164-B

164-D

Counterparty

Sumitomo Mitsui Trust Bank, Limited

Notional Amount

500 million yen

500 million yen

1,000 million yen

Fixed Interest Rate

-0.02410%

0.05660%

0.13450%

Interest

for Payment (Note)

Rate

Floating Interest

Base rate (JPY TIBOR for 3 month,

Rate for Receipt

JPY TIBOR for 1 months for the first payment)

Commencement Date

June 14, 2019

Termination Date

June 30, 2023

December 28, 2026

March 31, 2029

The first payment is due at the end of June 2019, and on the last day of every 3 months

Payment Date

thereafter with the termination date. (If each payment day is a non-business day, then the

payment will be due on the next business day and if that next business day is in the next

month, then previous business day will be applied.)

Note: By entering into the interest rate swap agreements, the interest rates on Series 164-A,164-B and 164-D are essentially fixed at 0.24590%, 0.51660% and 0.72450%, respectively.

4. Status of Borrowings and Investment Corporation Bonds after the Debt Financing (as of June 14, 2019)

(Millions of yen)

Classification

Balance before

Balance after

Difference

the Debt Financing

the Debt Financing (Note 3)

Short-Term Borrowings (Note 1)

4,200

4,200

0

Long-Term Borrowings (Note 2)

169,850

172,850

+3,000

Total Borrowings

174,050

177,050

+3,000

Investment Corporation Bonds

8,000

8,000

0

Total Borrowings and Investment Corporation Bonds

182,050

185,050

+3,000

Note 1: Short-term borrowings refer to debt financing with a period less than or equal to one year from the drawdown date to the principal repayment date. However, the borrowings for which the period until the principal repayment date has surpassed one year because the principal repayment date after one year from the drawdown date is not a business day, and for which the principal repayment date has been moved to a different business day, are included in short-term borrowings.

Note 2: Long-term borrowings refer to debt financing with a period more than one year from the drawdown date to the principal repayment date.

Note 3: The repayment amount of long-term borrowings due by cash on hand is reflected.

5. Other

For risks concerning the repayment, etc. of the aforementioned debt financing, there are no significant changes to the "Investment Risks" as described in the Securities Report (submitted on January 30, 2019).

The Investment Corporation's website: https://www.kdo-reit.com/en/

This notice is the English translation of the Japanese announcement on our website released on June 12, 2019. However, no assurance or warranties are given for the completeness or accuracy of this English translation.

2

Disclaimer

Kenedix Office Investment Corporation published this content on 12 June 2019 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 12 June 2019 07:33:03 UTC

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