Mitsubishi UFJ Financial Group Inc (8306.T) has announced that it will postpone the issuance of Additional Tier-1 (AT1) bonds to mid-May or later from late April. The decision was made due to investor appetite and market conditions.
AT1 bonds are a type of hybrid security that combines features of both debt and equity. They can be converted into equity or written off if a bank's capital level falls below a certain threshold, making them an attractive investment for some investors seeking higher yields.
The decision by Mitsubishi UFJ comes after the recent Swiss regulator FINMA's decision to wipe out Credit Suisse bonds. The move has raised concerns among investors about the risks associated with AT1 bonds, leading many banks to reassess their own bond issuance plans.
In response to these developments, Mitsubishi UFJ has decided to delay its own AT1 bond issuance until mid-May or later. The bank is reportedly monitoring market conditions closely and may adjust its plans further depending on how things evolve.
Despite this setback, however, Mitsubishi UFJ remains committed to ensuring its capital levels remain strong and stable over the long term. In a statement released alongside the announcement of the delayed bond issuance, the bank reiterated its commitment to maintaining sound financial management practices and delivering sustainable growth for stakeholders.
Investors will no doubt be watching closely in the coming weeks as more details emerge about Mitsubishi UFJ's revised AT1 bond issuance plans. With markets still volatile amid ongoing economic uncertainty caused by COVID-19 pandemic, it remains unclear what impact this latest development will have on global banking sector overall.