"Japanese bank seeks US capital injection" By David Pilling in Tokyo Published: July 21 2003 21:33 | Last Updated: July 21 2003 21:33
UFJ, Japan's fourth-biggest bank, plans to raise $1.25bn through an issue of dollar-denominated subordinated debt to US investors, further underscoring its new reliance on foreign capital.
The issue of 10-year bonds, which will carry a coupon of 6.75 per cent, is the latest in a series of capital-raising exercises by Japanese banks, which are scrambling to avoid nationalisation.
In the past six months, UFJ raised Y120bn ($1bn) through the issue of preferred capital to Merrill Lynch and a further Y150bn in a capital injection from Lehman Brothers. Last month, Deutsche Bank said it would invest Y17bn in a UFJ subsidiary set up to dispose of non-performing loans.
Other banks, weighed down by bad debts and hampered by poor profitability, have also been avidly seeking fresh capital. Goldman Sachs invested Y150bn in Sumitomo Mitsui Financial Group, while Mizuho issued Y850bn in preferred shares to closely related domestic investors.
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