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nytimes.com - 10/12/2008

U.S. Officials Said to Offer Protection to Japan Investors

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The investment in Morgan Stanley by Mitsubishi UFJ Financial Group could be a crucial step in the strategy for revitalizing the American financial system. >

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Report: Morgan Stanley and Mitsubishi Renegotiating
Calculated Risk — Andrew Sorkin reports in the NY Times: Mitsubishi and Morgan Stanley Renegotiating Under the proposed new terms being discussed on Sunday, Mitsubishi would still buy roughly 21 percent of Morgan Stanley ... But all of the investment would be through preferred shares, with a 10 percent annual dividend. Many of those shares would be convertible into common stock, but the Japanese bank was trying to set a conversion price far lower than originally proposed. Treasury, however, is not planning to have the United States government take a direct stake in Morgan Stanley ... Mitsubishi ...

US to Protect Mitsubishi Investment in Morgan Stanley
naked capitalism — ... $9 billion Mitsubishi UFJ investment in Morgan Stanley, appeared in the headline and first paragraph of the New York Times discussing the state of the deal. But the text of the article suggests the Treasury may be engaging in a bit of tap dancing, since the Japanese want a guarantee and the US Treasury appears loath to go that far. But the difference between a guarantee and "protection" appears to be semantic, so one has to wonder about the careful use of terminology. From the New York Times: In what could set an important precedent, federal ...

Wall Street Breakfast: Must-Know News
SeekingAlpha.com: Home Page — ... Morgan Stanley (MS) and Mitsubishi UFJ (MTU) continue to negotiate their $9B pact. Both sides want to keep the essence of the deal intact, while adding a few sweeteners for MUFG to compensate for the steep drop in Morgan's share price. Under the new terms, MUFG would receive only preferred shares instead of a mix of preferred and common shares, and the conversion price for convertible preferred shares would move down to the low $20s from $31. U.S. officials, in a potentially important precedent, urged a hesitant MUFG to proceed with the deal and promised its planned investment ...

Monday Morning Potpourri
Across the Curve — ... The US government, according to the New York Times has assured Mitsubishi that its $9 billion investment in Morgan Stanley will be “protected”. The writer at the Times rightly describes the move as “extraordinary”. ...

Morgan: Desperate For A Deal?
Trader Daily Combined Feed — ... government and could serve as a model for future deals. The tense, weekend talks were so critical to the financial markets that they drew in both the Treasury and the Japanese government. Mitsubishi and the Japanese government pressed the Treasury Department over the weekend to guarantee that if the United States were to inject money into Morgan Stanley at a later time — a step the Treasury has ruled out for now — the move would not wipe out Mitsubishi’s investment. Continue reading on NYTimes.com