JAPANESE LENDER TAKES CASKS OF MATURING WHISKY AS COLLATERAL FOR LONG-TERM LOAN
By Susan Lewis
Source: Kuju distillery
Japanese whisky has become so sought-after that distilleries can now use casks of maturing whisky as collateral to get long-term loans from financial institutions.
As reported by Japan's Nikkei news agency, Sumitomo Mitsui Finance has recently extended asset-backed loans to whisky maker Tsuzaki Corportaion in which casks of whisky were pledged as collateral.
The amount of the loan was reported to be in the region of hundreds of millions of yen (100 million yen equals USD688,000) over five years, or up to 20 years with refinancing.
Tsuzaki Corporation owns Kuju distillery in Kyushu which was opened in 2020 during the pandemic.
The distillery is built on the site of a closed distillery owned by Nikka, a leading Japanese whisky producer under Asahi Group.
Kuju has an annual production capacity of about 70,000 litres, the size of a small craft distillery in Japan.
Normally, financial companies will take real estate as collaterals for long-term loans as value of properties tend to grow over time.
They will also take equipments and inventory as collaterals, but only when extending short-term loans that will mature in less than a year.
Taking maturing casks of Japanese whisky as collaterals for long-term loans is a new development in Japan, according to Nikkei news agency.
This shows that the financial institution is confident that the value of the maturing casks will grow over the long term.
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