Morgan Stanley to alter terms for Mitsubishi UFJ infusion

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Morgan Stanley to alter terms for Mitsubishi UFJ infusion

Morgan Stanley is in talks with Mitsubishi UFJ Financial Group Inc about altering the terms of the Japanese bank's pending USD 9 billion infusion into the Wall Street firm after its stock sank 60% last week.

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Morgan Stanley is in talks with Mitsubishi UFJ Financial Group Inc about altering the terms of the Japanese bank's pending USD 9 billion infusion into the Wall Street firm after its stock sank 60% last week.

As per the latest updates, Mitsubishi UFJ said there is no change in Morgan Stanley investment size, while the preferred share conversion price is lowered and is now to be converted at $25.25. Morgan Stanley preferred shares carry 10% yield, it added.

Mitsubishi UFJ said MUFG gets 21% stake in the company.

Simultaneously, Morgan Stanley said Tier 1 cap ratio is now above 15.5% and the total assets are now under $900 billion. MUFG investment cuts leverage ratio to below 20, Morgan Stanley added.

In an announcement on September 23, Morgan Stanley had said it had entered into a letter of intent to pursue a strategic alliance with Mitsubishi UFJ Financial Group, Inc - Japan's largest banking group and the world's second-largest bank holding company - with USD 1.1 trillion in bank deposits.

The letter of intent related to an investment in Morgan Stanley that would eventually reach 20 percent of its equity on a fully-diluted basis. The investment, the announcement said, would be based on Morgan Stanley's book value as agreed upon completion of satisfactory due diligence. Upon the closing, a representative of MUFG will join the Morgan Stanley board.