Mitsubishi Materials will pay bondholders no interest on roughly ¥70bn of new debt, betting that a conversion price set above today's share price makes the borrowing cheap enough to underwrite its retreat from mined ore. The board approved a two-tranche Euro-yen convertible bond issue on 8 July 2026, one tranche maturing in 2030 and one in 2032, sold to investors in Europe and Asia but not the United States.
Terms disclosed for the 2030 tranche show how the package is built. Those bonds carry no coupon, will sell at 102.5% of face value, and mature on 24 July 2030. Both tranches convert into Mitsubishi Materials common stock and are due to be issued and paid for on 24 July 2026, marketed through Morgan Stanley & Co. International plc as sole bookrunner.
| Feature | Detail |
|---|---|
| Combined net proceeds (both tranches) | Approximately ¥70bn |
| 2030 tranche total issue amount | ¥35bn |
| Coupon | Zero (no interest) |
| Issue price | 102.5% of face value |
| 2030 tranche maturity | 24 July 2030 |
| Issue and payment date | 24 July 2026 |
| Conversion trigger (soft-call) | Share price above 150% of conversion price through mid-2029, or 130% after, for 20 consecutive trading days in a quarter |
| Lead manager | Morgan Stanley & Co. International plc (sole bookrunner) |
Management says the combined net proceeds, about ¥70bn, will fund growth investment in secondary-material smelting and expanded tungsten recycling by the end of March 2029. The company frames the spending as central to its 2026-2028 strategy of becoming what it calls a company that creates the future through resource-recycling, pointing to falling treatment and refining charges on copper concentrate, rising volumes of electronic scrap, other countries hoarding critical minerals, and geopolitical risk as reasons to cut reliance on primary ore.
To keep the bonds attractive without hurting existing holders too much, the company built in conversion restrictions. Bondholders can only convert once the share price closes above 150% of the conversion price, or 130% after mid-2029, for 20 consecutive trading days within a calendar quarter, and Mitsubishi Materials can choose to settle in cash rather than stock as the bonds near maturity.
A separate disclosure on the same day showed the bonds being repackaged before they even settle. Morgan Stanley MUFG Securities notified Mitsubishi Materials that J-Link Limited, an entity outside Japan, plans to buy the new convertible bonds and split them into a credit portion for bond investors and a warrant portion for others, without intending to exercise the warrants for shares or votes. Because full exercise of those warrants would theoretically hand J-Link claim to as much as 12.37% of Mitsubishi Materials' voting rights, the plan triggered Japan's disclosure rule covering potential share accumulation. Mitsubishi Materials said it has no involvement in or knowledge of that transaction and referred questions to Morgan Stanley MUFG.
Neither the conversion price for either tranche nor the number of bonds J-Link will ultimately buy has been fixed. Both depend on investor demand still being gauged ahead of the 24 July settlement date.