Mizuho Financial Group, Japan’s second-largest bank by revenue, plans to sell about Y300bn ($3.2bn) of preferred securities to replenish capital depleted by rising bad loans and losses on stock investments, reports Bloomberg. The securities, which can’t be converted into common shares, may be sold to institutional investors in Japan as early as by year-end. Mizuho confirmed the plan to sell preferred securities but said the amount had not been decided. The bank, which invested $1.2bn in Merrill Lynch this year, is tapping investors after rising bad debts and losses on equity holdings caused Japan’s five largest banks to slash profit forecasts. Other lenders may follow suit after the Nikkei 225 average tumbled 24% in October, the worst month on record, eroding their capital. Mizuho issued Y303bn in preferred debt securities in July. Bigger domestic rival MUFG said Oct 27 it plans to sell as much as Y990bn of stock after investing $9bn in Morgan Stanley.
