April 1, 2005
Robert E. Hand, Esquire
General Counsel and Director of Public Affairs
Legal and Compliance Office for the Americas
The Bank of Tokyo-Mitsubishi Ltd.
1251 Avenue of the Americas
New York, New York 10020
Re: Registration Statement on Form F-4
Filed March 4, 2005
File No. 333-123136
Dear Mr. Hand:
We have reviewed your filing and have the following
comments. Where indicated, we think you should revise your
document
in response to these comments. If you disagree, we will consider
your explanation as to why our comment is inapplicable or a
revision
is unnecessary. Please be as detailed as necessary in your
explanation. In some of our comments, we may ask you to provide
us
with supplemental information so we may better understand your
disclosure. After reviewing this information, we may or may not
raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
Outside Front Cover Page of the Prospectus
1. Please include the information required by Item 501 of
Regulation
S-K for the Class 8 preferred shares.
Summary- pages 6-12
2. Please state, as required by Item 3 (i) of Form S-4, whether
any
regulatory requirements must be complied with or any approvals
obtained.
3. Please revise the section entitled "The Merger," on pages 6-7,
as
follows:
* clarify whether holders of preferred shares of UFJ will receive
an
equal number of preferred shares of Mitsubishi Tokyo; and
* disclose the aggregate purchase price as of the date before the
announcement of the merger and as of the date of the prospectus;
4. Please briefly discuss who will serve as the directors and
management of Mitsubishi UFJ following the merger.
5. Please add a section addressing the current securities
interests
of each of the companies and their directors, executive officers
and
their affiliates in the merger including the following:
* discuss the UFJ preferred stock owned by Mitsubishi Tokyo, the
conversion right and the put and call options relating to the
preferred stock
* discuss the effect of these rights;
* discuss the percentage of voting rights in UFJ that Mitsubishi
Tokyo could own if the merger does not occur;
* briefly discuss how directors, executive officers and their
affiliates of each entity will be affected by the merger in terms
of
compensation or other benefits;
* add a brief statement comparing the vote required for approval
of
the proposed transaction with the percentage of outstanding shares
of
UFJ securities entitled to vote held by Mitsubishi Tokyo, its
directors, executive officers and their affiliates and by UFJ`s
directors, executive officers and their affiliates; and
* add a brief statement comparing the vote required for approval
of
the proposed transaction with the percentage of outstanding shares
of
Mitsubishi Tokyo securities entitled to vote held by UFJ, its
directors, executive officers and their affiliates and by
Mitsubishi
Tokyo`s directors, executive officers and their affiliates.
6. Please revise the section entitled "Reasons for the Merger," on
pages 7-8, as follows:
* distinguish the reasons of Mitsubishi Tokyo for engaging in the
transaction and the reasons of UFJ for engaging in the
transaction;
and
* identify those core financial business areas in which the merged
company, Mitsubishi UFJ, will have a strong presence that UFJ does
not currently enjoy.
7. Please revise the section entitled "Material Tax Consequences,"
on
page 9, as follows:
* disclose the factors that will determine whether or not the
merger
is treated as tax free; and
* disclose, as of the date of the prospectus, whether at that
time,
the merger would be treated as tax free.
We note that your financial advisers estimated that UFJ holders
will
own 41.2 percent of Mitsubishi UFJ.
8. Please provide more detail, on page 9, regarding conditions to
the
merger. Please include a brief discussion of the circumstances
under
which UFJ and/ or Mitsubishi Tokyo may terminate the merger
agreement.
9. Please provide more detail, on page 9, regarding opposition
rights
of appraisal. Clarify whether or not shareholders have opposition
rights under the Commercial Code of Japan.
Risk Factors - page 13
10. Several of your risk factors state that there can be no
assurances of a particular event when the risk is not your
inability
to give assurances, but the underlying situation. Please revise
to
eliminate this and similar language.
11. Please add a risk factor on the potential unreliability for
United States investors of the fairness opinions, which both
assume
that the acquisition will be accounted for as a pooling.
Failure to Complete the Merger - page 15
12. This risk factor does not describe a risk of the transaction,
but
a risk if the transaction does not occur. Please delete it
because
it is coercive.
Unaudited Pro Forma Combined Condensed Balance Sheet as of
September
30, 2004 - page 39
13. We note your disclosure on page 96 regarding your integration
plans. Please revise to include a pro forma adjustment for the
liability for integration and restructuring charges you expect to
incur in connection with the merger. Alternatively, revise your
pro
forma footnote disclosures to clarify why your integration plans
do
not meet the criteria of being directly attributable to the
transaction and factually supportable. Refer to EITF 95-3 and
Rule
11-02(b) (6) of Regulation S-X.
Notes to Unaudited Pro Forma Combined Condensed Financial
Information
General
14. Please revise to describe the details of management`s plan for
restructuring and integration or cross reference your disclosure
included elsewhere in the filing. Disclose when you expect to
finalize your plans.
15. Please revise to quantify the merger and integration charges
you
expect to record under U.S. GAAP and disclose when you expect to
record the charges. Disclose how you will account for these
charges
under U.S. GAAP.
Note 2 - Unaudited Pro Forma Combined Condensed Balance Sheet -
Item
(C) - page 45
16. We note your disclosure of the methods used to determine the
fair
value of your convertible preferred stock to be issued in
connection
with the purchase of UFJ Holdings. Please revise to disclose the
terms and conditions of the securities when determined and
quantify
the inputs for your binomial option model to help investors
understand how you determined the fair value of the convertible
preferred stock.
17. We note your disclosure of the methods used to determine the
fair
value of your common stock to be issued in connection with the
purchase of UFJ Holdings. Please revise to disclose the number of
shares to be issued and the average closing market price of MTFG
common stock used for your fair value estimate.
Note 2 - Unaudited Pro Forma Combined Statements of Income - Item
(E)
- - page 48
18. Please revise to quantify the significant components of your
pro
forma adjustment for amortization expense related to acquired
intangible assets.
Note 2 - Unaudited Pro Forma Combined Statements of Income - Item
(F)
- - page 48
19. We note your disclosure that income from continuing operations
allocable to preferred shareholders is derived from amounts
recorded
in the historical statements of operations without adjustment.
Please revise to reconcile the amounts of income allocable to
preferred shareholders with the historical amounts disclosed on
pages
42 and 43.
UFJ Holdings Financial Results for the Year Ended March 31, 2004 -
page 58
20. Please revise this section as follows:
* revise the title to reflect the fact that you discuss UFJ`s
recent
substantial losses and regulatory problems;
* provide more detail regarding the substance of the
administrative
orders including the nature of the obstruction by management and
the
sanctions imposed, the shortcomings of your internal controls and
the
business revitalization plan; and
* discuss the resignations of top management and the criminal
prosecutions.
Discussions of Transfer of UFJ Trust to Sumitomo Trust & Banking
Co.
Ltd. - page 58
21. Please disclose the basic terms of the proposed transaction.
Discussions of Business Integration between MTFG and UFJ Holdings
- -
pages 58- 61
22. Please revise this section as follows:
* disclose the basis for Sumitomo Trust`s claim and court rulings
against you;
* provide detail as to the terms of the August 2004 merger
proposal
from Sumitomo Mitsui and compare these terms with the terms of the
current proposed merger;
* disclose the extent to which UFJ engaged in negotiations with
Sumitomo Mitsui before entering into the September 10, 2004
agreement
with you and explain the reasons for the extent of negotiations
with
Sumitomo Mitsui;
* explain why UFJ rejected the merger proposal from Sumitomo
Mitsui;
and
* discuss the reasons for the put options regarding the preferred
stock and its effect on the merger proposal from Sumitomo Mitsui.
23. Please supplementally provide (translated into English, if
necessary) all material nonpublic information that has crossed
over
between Mitsubishi Tokyo (and its representatives) and UFJ (and
its
representatives).
Determination of UFJ Holdings` Board of Directors, page 62
24. The board should specifically name each analysis in the
advisors`
opinions that does not support fairness and explain why, in light
of
such analysis, it is recommending the transaction.
Opinion of Merrill Lynch - pages 64-67
25. Please disclose in the prospectus that Merrill Lynch has
consented to the use of its opinion in the prospectus. The same
comment applies to JPMorgan.
26. Please revise this section as follows:
* disclose, on page 67, the aggregate fees earned by Merrill Lynch
from Mitsubishi Tokyo during the past two fiscal years; and
* disclose, on page 67, the aggregate fees earned by Merrill Lynch
from UFJ during the past two fiscal years.
27. Please discuss UFJ Strategic Partners and Genesis including
the
amount of Merrill Lynch`s investment and options, the date(s) of
its
investments and the premium (if known) that would be paid if the
preferred were bought. Please explain how this investment would
be
affected by the proposed merger.
Opinion of JPMorgan - pages 67-70
28. Please revise this section as follows:
* disclose, on page 70, the amount of the contingent fee for the
merger as well as the amount of expenses that were reimbursed;
* disclose, on page 70, the amount of the fee for the sale of
preferred stock;
* disclose, on page 67, the aggregate fees earned by JPMorgan from
Mitsubishi Tokyo during the past two fiscal years; and
* disclose, on page 67, the aggregate fees earned by JPMorgan from
UFJ during the past two fiscal years.
Financial Analyses Used by Merrill Lynch and JPMorgan - pages 70-
82
29. Supplementally, please provide the staff with the Merrill
Lynch
and JPMorgan board books (translated into English, if necessary).
Related Transactions - pages 91-92
30. Please provide an overview of Mitsubishi Tokyo`s rights and
how
they could affect UFJ shareholders if the merger occurs and if the
merger doesn`t occur.
UFJ Holdings - page 109
31. Please revise the introduction to this section to briefly
discuss
UFJ`s financial condition, recent losses, administrative orders,
resignations, suspension of loan originations and criminal
prosecutions.
Management`s Discussion and Analysis of Financial Condition and
Results of Operations of Mitsubishi Tokyo - pages 130-216
32. Please revise this section considering Release No. 33-8350
including, but not limited to, the following:
* provide a balanced, executive-level discussion that identifies
the
most important themes or other significant matters with which
management is concerned primarily in evaluating the company`s
financial condition and operating results;
* include economic or industry-wide factors relevant to the
company;
* inform the reader about how the company earns revenues and
income
and generates cash; and
* provide insight into material opportunities, challenges and
risks,
such as those presented by known material trends and
uncertainties,
on which the company`s executives are most focused for both the
short
and long term, as well as the actions they are taking to address
these opportunities, challenges and risks.
In addition, please revise to comply with Item 303(b) (1) which
requires that you "address past and future financial condition and
results of operations ...with particular emphasis on the prospects
for the future."
Critical Accounting Estimates - page 134
33. We note your disclosure on page 138 that quoted market prices
are
not available for a substantial potion of financial instruments.
To
help investors understand the significance of this critical
accounting estimate please revise to quantify the estimated fair
value of financial instruments without available market prices,
for
which management estimates fair value based on externally
verifiable
model inputs and quoted prices. In addition, please similarly
revise
the UFJ Holdings critical accounting estimate disclosure on page
223.
Management`s Discussion and Analysis of Financial Condition and
Results of Operations of UFJ Holdings - pages 217-266
34. Please revise the introduction, on pages 217-218, to briefly
discuss UFJ`s large losses due to non-performing loans, UFJ`s
difficulty in meeting the minimum capital adequacy ratio, UFJ`s
internal lack of adequate controls, the resignations and
prosecutions
of executives and the imposition of sanctions against UFJ.
Allowance for Loan Losses, Nonperforming and Past Due Loans - page
243
35. We note your disclosure on page 245 that the reduction in
exposure to large borrowers experiencing weak economic performance
was achieved through debt forgiveness, debt-equity swaps and loan
sales. Please revise to quantify the carrying amount of loans
that
were swapped for equity during each period presented.
36. We note your disclosure on page 219 that the results of
inspections by the Financial Services Agency have been considered
in
determining UFJ Holdings` loan loss allowances in the periods
presented. Please revise to describe and quantify the resulting
impact of these inspections on your provision and allowance for
loan
losses for each period presented.
Investment Portfolio - page 246
37. To help investors understand change in financial condition
since
the fiscal year-end, please revise to separately quantify gross
unrealized gains and losses on investment securities. Refer to
Item
303(b) of Regulation S-K.
Management - page 277
38. Please disclose the material terms of any agreements or
understandings with the persons selected to serve as Chairman,
Deputy
Chairman and President of Mitsubishi UFJ and compare these with
terms
of their previous agreements or understandings.
39. Please disclose the provision in the integration agreement
that
senior executives of each entity will be given senior positions in
Mitsubishi UFJ.
U.S. Tax Consequences of the Merger- pages 303-305
40. Please revise this section as follows:
* disclose as of the date of the prospectus whether the
transaction
would be treated as a reorganization and therefore a tax free
transaction and explain how you made the determination;
* disclose the various factors that could change the determination
between the date of the prospectus and the time of the merger; and
* explain in detail the reasons why you cannot determine as of the
date of the prospectus whether at the time of the merger the
shareholders of UFJ will own as least 50 percent of the voting
rights.
Exhibits
41. Please file all exhibits as soon as possible.
* * * * * * * * * * * * *
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
* the company may not assert staff comments and the declaration of
effectiveness as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the
United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Sharon M. Johnson at (202) 942-2961 or
Joyce A. Sweeney at 202-942-1939 if you have questions regarding
comments on the financial statements and related matters. Please
contact Jonathan E. Gottlieb at (202) 942-2901 or me at (202) 942-
1874 with any other questions.
Sincerely,
Mark Webb
Legal Branch Chief
cc Mark S. Bergman, Esquire
Tong Yu, Esquire
Paul, Weiss, Rifkind, Wharton & Garrison LLP
Fukoku Seimei Building, 2d Floor
2-2 Uchisaiwaicho 2- chome
Chiyoda-ku, Tokyo 100-0011, Japan
April 1, 2005 Page 1 of 11