TOKYO -- Mitsubishi UFJ Financial Group will issue corporate bonds worth around 150 billion yen ($1.42 billion) for retail investors by the end of September, Nikkei has learned. The funds raised will be used as loans to small and midsize companies suffering from falling sales due to the coronavirus pandemic, hospitals treating COVID-19 patients and pharmaceutical companies.
Global debt issuance in response to the coronavirus totals about $318 billion, according to Mitsubishi UFJ. But such bonds have been issued to institutional investors while Mitsubishi UFJ says it will be the world's first bank to issue them for retail investors.
Mitsubishi UFJ says it decided to issue the bonds as it has received numerous inquiries from retail investors after issuing coronavirus bonds for institutional investors in June.
The term of the bonds will be 10 years and four months. Mitsubishi UFJ will issue two types of corporate bonds: those to be redeemed at maturity and those to be redeemed after five years and four months at the discretion of the financial group.
Yields for coronavirus bonds will be higher than those for Mitsubishi UFJ's other corporate bonds as they are subordinated bonds, which rank after other debt if the company falls into liquidation or bankruptcy.
Mitsubishi UFJ hopes to attract retail investors who are having difficulty finding a place to park their money as interest rates remain at ultra-low levels. The yields for the first slot of 10-year, variable interest-rate Japanese government bonds for retail investors have remained sluggish at 0.05%.