MUFG and Morgan Stanley announce new initiatives to strengthen global alliance

Japan-based Mitsubishi UFJ Financial Group and Morgan Stanley, based in the US, have announced new initiatives that will expand the scope of their strategic alliance into new geographies and businesses.

The new initiatives are: a global alliance in corporate and investment banking consisting of the creation of a loan marketing joint venture in the Americas starting initially in the US, and business referral arrangements in Asia, Europe, the Middle East and Africa; a commodities-specific initiative, in the form of a referral agreement for commodities transactions executed outside of Japan; and secondment of personnel for sharing of best practices and expertise.

Mitsubishi UFJ Financial Group (MUFG) and Morgan Stanley will come together to create Morgan Stanley MUFG Loan Partners, a new loan marketing joint venture that will generate credit opportunities for both firms and provide clients in the US, Canada and Latin America (subject to clearance of any regulatory requirement in each jurisdiction) with access to expanded lending and capital markets services from both companies.

MUFG said that the Bank of Tokyo-Mitsubishi UFJ (BTMU), a subsidiary of MUFG, and Morgan Stanley, if combined, would constitute a new lender to major US corporations, with total loan commitments over $100 billion.

MUFG and Morgan Stanley have agreed on term sheets under which they will pursue arrangements to leverage their respective relationships with customers in Asia, specifically, ASEAN, India, Australia, Korea, Taiwan and Hong Kong, and in Europe, the Middle East, and Africa through referrals of new business opportunities.

MUFG said that the arrangements are intended to cover a number of products and services, including capital markets, loans, fixed income sales and other ancillary businesses. MUFG and Morgan Stanley intend to initiate the arrangements immediately following their execution of definitive agreements.

Additionally, the two firms have entered into the global commodities referral agreement that governs the referral of BTMU clients to the Morgan Stanley Capital Group (MSCG) for commodities business. Through this agreement, BTMU will be able to refer clients to MSCG for commodity transactions and receive referral fees upon deal completion. Both BTMU and MSCG expect to increase product offerings and revenue opportunities to BTMU clients that are involved

in the global commodity business.

MUFG and Morgan Stanley have also agreed to the framework of a secondment program. The program will begin with the secondment of MUFG personnel to Morgan Stanley. The parties intend to initiate this program following the finalization of a formal agreement.

John Mack, Morgan Stanley's chairman and CEO, said: "We are delighted to be strengthening our strategic alliance with MUFG through these important initiatives. Looking ahead, the newly formed loan marketing joint venture provides our clients with even stronger financing capabilities, and the commodities referral agreement gives MUFG's clients access to an industry-leading commodities platform."

Nobuo Kuroyanagi, president and CEO of MUFG, said: "Today's announcement demonstrates that our strategic alliance with Morgan Stanley is delivering significant tangible benefits. I am confident that the initiatives we have announced today will enhance both companies' global presence, enable us to better meet the needs of our respective clients and generate increased revenues."

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