Mitsubishi UFJ Financial Group and Morgan Stanley Announce Agreement to Convert Morgan Stanley Convertible Preferred Stock to Common Stock

Mitsubishi UFJ Financial Group, Inc. (MUFG) MTU and Morgan Stanley MS today announced that they have entered into an agreement to convert MUFG's outstanding convertible preferred stock in Morgan Stanley into Morgan Stanley common stock. Under the terms of the transaction, MUFG will exchange convertible preferred stock with a face value of $7.8 billion and a 10% dividend for 385 million shares of Morgan Stanley common stock, reflecting an increase in the conversion rate of 75 million shares and providing MUFG with an ownership interest in Morgan Stanley of 22.4%. This conversion enhances Morgan Stanley's Tier 1 Common capital position, aligns MUFG's interests with those of Morgan Stanley's common shareholders, and further strengthens the global strategic alliance between the two firms. Morgan Stanley's Tier 1 Common Ratio is expected to increase by more than 270 basis points as a result of this transaction to approximately 14.5% on a proforma basis as of March 31, 2011. Morgan Stanley's Tier 1 Capital and Tier 1 Leverage ratios are unaffected by this transaction.