In March MTFG successfully priced a Ą306bn follow-on offering of common stock, representing 9.3% of total shares outstanding in challenging equity market and industry conditions, as the Nikkei hit a 20-year low in the month of completion.
The MTFG transaction was the first offering of common stock by a Japanese bank in more than 13 years, the biggest common equity offering in more than two years and the biggest capital increase from the Japanese private sector.
Unlike other Japanese banks, which were undertaking defensive capital raisings primarily to address increased loan provisions and to meet minimum capital adequacy guidelines, MTFG’s offering was designed to raise capital to fund aggressive loan growth during a period when other Japanese banks were being forced to reduce loan assets.
The deal was significant for changing the mood of the Japanese equity market and setting the standard for future Japanese bank recapitalisation.
