Morgan Stanley secures $9bn from Mitsubishi Financial

by Gill Montia

Story link: Morgan Stanley secures $9bn from Mitsubishi Financial

Morgan Stanley has secured a $9 billion (£5.3 billion) injection of cash from Mitsubishi Financial Group Inc., Japan’s largest bank.

The terms of the deal were hastily renegotiated after Morgan Stanley’s stock plunged in value last week and it looked as if the investment bank would become the next Wall Street victim of the credit crisis.

However, on yesterday’s news that an agreement with Mitsubishi Financial had been finalised, Morgan Stanley’s shares soared, adding 85% to their value at the end of last week.

The revised deal gives Mitsubishi a 21% stake in the bank and a seat on Morgan Stanley’s board.

The entire stake will comprise preferred stock, whereas under the initial negotiations $3 billion would have been invested in common stock.

Morgan Stanley also announced yesterday that its assets under management have declined to under $900 billion, compared with $987 billion at the end of August.