Mitsubishi UFJ Closes $9B Investment In Morgan Stanley (MS)

October 13, 2008 8:13 AM EDT

Mitsubishi UFJ Financial Group, Inc. (NYSE: MTU) closed its $9 billion equity investment in Morgan Stanley (NYSE: MS), which gives Mitsubishi UFJ a 21% ownership interest in Morgan Stanley.

Under the revised terms of the transaction, MUFG has acquired $7.8 billion of perpetual non-cumulative convertible preferred stock with a 10 percent dividend and a conversion price of $25.25 per share, and $1.2 billion of perpetual non-cumulative non-convertible preferred stock with a 10 percent dividend.

The MUFG investment further bolsters Morgan Stanley's already strong capital position. Morgan Stanley's Tier 1 Capital Ratio is now estimated to be more than 15.5 percent on a pro-forma basis as of August 31, 2008. This is far in excess of the 6 percent required by the Federal Reserve to be treated as well-capitalized and is one of the highest Tier 1 Capital Ratios among bank holding companies peers. The MUFG investment also reduces Morgan Stanley's leverage ratio to just under 20 times and its adjusted leverage ratio to just over 10 times on a pro-forma basis at August 31, 2008. In addition, Morgan Stanley has continued to reduce the size of its balance sheet since the end of the third quarter. As of today, total assets are now under $900 billion, down from $987 billion at August 31, 2008.

Related Categories

Hot List
Mergers and Acquisitions
Rumors
Trader Talk

Stocks Mentioned

Related Entities

• Morgan Stanley
• Dividend

Add Your Comment

Name

Subject

Body

Verification can't see the text?
click here to refresh the image.
what's this?