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Tepco’s Loan Said to Have ‘Strict’ Profit and Assets Covenants

Tokyo Electric Power Co.’s new loan that is part of the nation’s largest bailout in more than a decade will come with “strict” covenants triggering repayment, according to three people familiar with the matter.

Banks offering the loan to Tepco, as the utility is known, can ask for repayment in full if its profit or net assets fall 25 percent below targets stipulated in the company’s business plan for two consecutive quarters, the people said. The conditions will apply to a 370 billion yen ($4.6 billion) portion of Tepco’s 1 trillion yen loan, they said.