Mitsubishi UFJ Financial Group (MUFG) has completed the largest securities offering in Japan of the past decade. The offering was comprised of a Japanese tranche and an international tranche and lawyers from Japanese law firms Nagashima Ohno & Tsunematsu and Mori Hamada & Matsumoto were engaged to deal specifically with Japanese law issues.

“Nagashima Ohno handled the Japanese side, while Paul Weiss handled the international side,” said Tong Yu partner based in the Tokyo office of Paul Weiss, a firm which has acted as US securities counsel to MUFG since it first listed on the NYSE in 1989. “Of course, on over-lapping parts, there was a lot of coordination and cooperation between the two firms. The two firms have worked together on a number of offerings for MUFG in recent years so the teams worked together seamlessly.” MUFG first raised capital in December 2008 and this offering was then followed by offerings from all of the other major financial institutions including Mizuho, Sumitomo Mitsui Financial Group and Nomura.

MUFG used the proceeds to make an investment in its wholly-owned subsidiary the Bank of Tokyo-Mitsubishi UFJ to strengthen the overall group capital base. “The December 2009 offering was a pro-active effort on MUFG's part to strengthen its solid capital base so that it can further contribute to the real economy, both in Japan and globally, as a provider of a stable source of funds and financial intermediary functions,” said Yu.

Although this offering may suggest a market recovery, Yu maintains caution. “I believe capital raising by financial institutions is not necessarily indicative of the overall equity capital markets as it represents only one segment of the market – and a very particular segment in light of the financial crisis,” said Yu. “However, the overall equity markets globally and in Japan have been recovering in the latter part of 2009, and we have seen a number of deals being completed.”

Sumitomo Mitsui Financial Group also recently announced plans to raise additional capital in 2010.

*The joint global co-ordinators were Morgan Stanley, Mitsubishi UFJ Securities, Nomura Securities and J.P. Morgan.

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