Mitsubishi UFJ Financial Group is borrowing ¥200bn through bonds that never mature and can lose their entire face value if the bank's capital position weakens enough. The filing, lodged with the Kanto Local Finance Bureau on September 11, 2026, covers two tranches of unsecured perpetual subordinated bonds issued under the bank's shelf registration.
Two tranches, two reset dates
Series 31 totals ¥115bn and pays a fixed 3.311% a year until January 15, 2032, after which the rate resets to six-month yen Tibor plus 0.497%, floored at zero. Series 32 totals ¥85bn, pays 4.072% until January 15, 2037, then resets to six-month yen Tibor plus 0.641%, also floored at zero. Both pay interest twice a year, on January 15 and July 15, and both can be called by MUFG from their first reset date onward, but only with prior confirmation from the Commissioner of the Financial Services Agency.
| Feature | Series 31 | Series 32 |
|---|---|---|
| Size | ¥115bn | ¥85bn |
| Fixed coupon period | 3.311% to Jan 15, 2032 | 4.072% to Jan 15, 2037 |
| Floating spread after reset | 6-month yen Tibor + 0.497% (floor 0%) | 6-month yen Tibor + 0.641% (floor 0%) |
| Lead underwriter allocation | ¥101.4bn (Mitsubishi UFJ Morgan Stanley Securities) | ¥74.9bn (Mitsubishi UFJ Morgan Stanley Securities) |
| Credit ratings (JCR / R&I) | A / A | A / A |
The catch for holders
These are loss-absorbing instruments, not ordinary corporate debt. If MUFG's disclosed consolidated common equity Tier 1 ratio falls below 5.125%, the bank can cancel part or all of the principal and matching interest outright, with no equity or other security handed over in exchange. A subsequent capital-recovery event can restore some of the written-down principal, but the filing is explicit that this is not guaranteed and bondholders have no right to demand it. MUFG can also skip any interest payment at its own discretion, and payments are separately capped by a distributable-amount test tied to the bank's retained earnings for the year. Skipped interest does not accumulate or get paid later.
The bonds sit behind MUFG's ordinary creditors in a liquidation, a design consistent with Japan's total loss-absorbing capacity regime, under which MUFG has been designated the domestic resolution entity for its group and could pass losses down from subsidiaries including MUFG Bank, Mitsubishi UFJ Trust and Banking, and Mitsubishi UFJ Morgan Stanley Securities.
Ratings, underwriters and shelf capacity
Both tranches carry an A rating from Japan Credit Rating Agency and from Rating and Investment Information, assigned September 11, 2026. Mitsubishi UFJ Morgan Stanley Securities, MUFG's own brokerage arm, led the underwriting with ¥101.4bn of Series 31 and ¥74.9bn of Series 32, alongside Morgan Stanley MUFG Securities, Nomura, Daiwa, Okasan and Tokai Tokyo.
The issue draws on a ¥5tn shelf registration that took effect in June 2025 and runs to June 2027. MUFG had already placed ¥779bn under that shelf across five prior offerings before this filing, leaving roughly ¥4.221tn of capacity. After ¥1.55bn of issuance costs, MUFG expects to net ¥198.45bn, which it plans to funnel into subsidiary capital and lending, long-term investment, working capital or debt repayment by the second half of the year to March 2027.