MUFG To Funnel $936 Million to US Bancorp

On August 2, Mitsubishi UFJ Financial Group (MUFG) announced a $936 million investment in US Bancorp, which will help the US regional bank repay some of its debt to the Japanese lender.

In exchange, MUFG's stake in the fifth largest US bank will increase from 2.9 percent to 4.4 percent.

Last year, MUFG sold its U.S. retail banking unit, MUFG Union Bank, to U.S. Bancorp for $8 billion. U.S. Bancorp received $3.5 billion in additional cash held by MUFG Union Bank as part of the deal, which it must repay within five years.

The latest agreement will see U.S. Bancorp will issue 24 million common shares at $39.00 each to MUFG, compared with Wednesday's closing price of $38.43.

The Minneapolis-based bank will also help MUFG with U.S. dollar liquidity support, allowing the Japanese bank to diversify dollar funding sources in case of contingencies.

MUFG said the banks expect to further expand collaboration in areas such as corporate transactions and financial services for Japanese customers.