Japan’s biggest lender is planning to raise funds from individual investors to help smaller companies and hospitals tackle the COVID-19 pandemic.
Mitsubishi UFJ Financial Group Inc. intends to issue sustainability bonds totaling as much as ¥150 billion ($1.42 billion) in September, after receiving requests from retail buyers following a sale of such notes to institutional investors in June, according to Isamu Murofushi, a bank spokesman.
The pandemic is boosting global sales of notes that aim to help governments, companies and other institutions get through the crisis. Borrowers globally have raised about $77.5 billion through social and sustainability bonds since the start of 2020, compared with around $55.5 billion for all of last year, according to data compiled by Bloomberg.
Proceeds of MUFG’s debt sale will be used to extend loans to small-to-mid sized companies and hospitals to help them fight the impact of the virus, as well as to drugmakers developing vaccines and medicines, Murofushi said.
"We are already receiving inquiries from retail investors at our retail branches, which shows that retail investors are interested in environment, social and governance investments,” said Haruhiro Ikezaki, managing director and head of the debt capital markets division at Mitsubishi UFJ Morgan Stanley Securities Co., the lead underwriter on the debt offering.
MUFG plans to sell two subordinated bonds maturing in 10 years and four months, according to the filing. Pending issuer approval, one of these would be callable in five years and four months. The bond maturing in 10 years and four months is likely to offer a coupon of around 0.7-1.1 percent, while the callable one may pay about 0.4-0.8 percent.
"Since there are few corporate bonds targeted at retail investors, a product with an ‘ESG flavor’ may attract certain demand, which is likely to help the retail credit market grow,” Ikezaki said.
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