This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Mitsubishi UFJ Financial Group And Morgan Stanley Announce Agreement To Convert Morgan Stanley Convertible Preferred Stock To Common Stock

Stocks in this article: MS MTU

Mitsubishi UFJ Financial Group, Inc. (MUFG) (NYSE: MTU), one of the world's leading financial groups, and Morgan Stanley (NYSE: MS), a leading global financial services firm, today announced that they have entered into an agreement to convert MUFG’s outstanding convertible preferred stock in Morgan Stanley into Morgan Stanley common stock.

Under the terms of the transaction, MUFG will exchange convertible preferred stock with a face value of $7.8 billion and a 10% dividend for 385 million shares of Morgan Stanley common stock, reflecting an increase in the conversion rate of 75 million shares and providing MUFG with an ownership interest in Morgan Stanley of 22.4%. This conversion enhances Morgan Stanley’s Tier 1 Common capital position, aligns MUFG’s interests with those of Morgan Stanley’s common shareholders, and further strengthens the global strategic alliance between the two firms.

Morgan Stanley's Tier 1 Common Ratio is expected to increase by more than 270 basis points as a result of this transaction to approximately 14.5% on a proforma basis as of March 31, 2011. Morgan Stanley’s Tier 1 Capital and Tier 1 Leverage ratios are unaffected by this transaction.

Following conversion, MUFG will account for its investment in Morgan Stanley using the equity method of accounting.

Katsunori Nagayasu, President and Chief Executive Officer of MUFG, said, “We have decided to convert based on the mutual understanding that it would benefit both MUFG and Morgan Stanley and, more importantly, further enhance the strategic alliance. MUFG will now own 22% of Morgan Stanley's common stock, and Morgan Stanley will enhance its capital position though the conversion. Leveraging this excellent development, we intend to deepen our alliance further and maximize business synergies between us.”

James Gorman, President and Chief Executive Officer of Morgan Stanley, said, “This is the right move for both Morgan Stanley and MUFG, and it is a testament to the strength of our unique relationship that we were able to capitalize on this opportunity to reach an agreement in the best interests of both companies. This conversion will result in an industry-leading capital position, further enhance our global strategic alliance with MUFG and ensure that we have substantial flexibility to deliver for clients around the globe.”

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs