Mizuho Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. plan to bolster their balance sheets by introducing bonds that offer investors enhanced returns at greater risk.
The two banks will sell so-called Tier 1 notes, or instruments whose value may be written down if the issuer’s capital falls below a specific level. The debt will be sold as early as this month, their units said last week, part of a trend that could see the local market for such securities expand to as much as ¥4 trillion ($32 billion) by 2019, when tougher Basel III banking rules come into full effect, according to Daiwa Securities Group Inc.
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