East Japan Railway Company
October 17, 2007
Main substance of the earthquake derivative contract
JR East is committed to anti-earthquake measures, including reinforcement against the eventuality of a major earthquake, while also seeking insurance against possible losses through earthquake insurance. The contract described here is an additional measure to further mitigate the financial impact of a powerful earthquake occurring directly below the Tokyo metropolitan area.
A description of the scheme
«Schematic Illustration»
Substance of the contract
(1) | Contract amount: 260 million dollars (approximately 30 billion yen) |
(2) | Maturity: 5 years |
(3) | Earthquakes covered: Earthquakes of a certain magnitude or greater with the hypocenter within a radius of 70 km from Tokyo Station |
(4) | Payment to be received if earthquake occurs: Certain amounts are to be paid according to the location and magnitude of the earthquake, up to 260 million dollars, during the term of the contract. The payment to JR East increases in proportion to the magnitude of the earthquake. |