(The following statement was released by the rating agency)
TOKYO, September 06 (Fitch) Fitch Ratings has assigned
UFJ Financial Group, Inc.'s (MUFG, A/Negative) proposed US
unsecured notes an expected rating of 'A (EXP).'
The notes are expected to count towards MUFG's total
(TLAC) requirements, which have been set by the Financial
Stability Board at 16%
of its risk-weighted assets, effective 1 January 2019.
Fitch believes MUFG will meet its minimum requirement for TLAC
by the 2019
deadline through managed growth, earnings retention and/or
The senior bonds will constitute direct, unconditional,
unsubordinated general obligations of MUFG and rank pari passu
preference among themselves and with all of the group's other
indebtedness, other than subordinated indebtedness and except
preferred indebtedness. The notes will be structurally
subordinated to the
liabilities of MUFG's subsidiaries, including Bank of
Tokyo-Mitsubishi UFJ, Ltd.
(BTMU; A/Negative) and Mitsubishi UFJ Trust & Banking
The proceeds will be downstreamed in full to the operating
obligations that rank pari passu with other senior unsecured
obligations of the
operating subsidiaries. The final rating is contingent upon
receipt of final
documents conforming to information already received.
KEY RATING DRIVERS
The rating on the notes is aligned with the Long-Term Issuer
(IDR) of MUFG, in line with Fitch's criteria.
MUFG's IDR is based upon its Viability Rating (VR) and reflects
group's strong and very sound domestic franchises, solid
liquidity profiles in
yen, sound asset quality and adequate capital positions, which
will continue improving through consistent retained earnings.
The rating also
considers MUFG's improved capital position, which counters a
rising appetite for
risk outside Japan, although modest earnings and market risks
still expose the
group to volatility. The Negative Outlook reflects the similar
Outlook on the
Japan sovereign's ratings.
The rating on the senior unsecured notes issued by MUFG would be
affected by a change in MUFG's IDRs, which would stem from a
change in its VR.
However, the rating would also then be underpinned by its 'A-'
Negative action could also stem from an unexpected change in the
framework that clearly and materially increases the loss
severity of the notes
relative to other senior unsecured debt.
+81 3 3288 2686
Fitch Ratings Japan Limited
Kojimachi Crystal City East Wing 3F
4-8 Kojimachi, Chiyoda-ku, Tokyo 102-0083
+81 3 3288 2783
+65 6796 7229
Media Relations: Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935,
Additional information is available on www.fitchratings.com
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