Morgan Stanley launches new lending unit with Mitsubishi UFJ

Morgan Stanley and Mitsubishi UFJ Financial Group decided to pool their lending resources, under an agreement designed to help win more investment banking business. The terms of the deal imply the establishment of a joint venture that would be providing loans to companies across North America. The combined loan commitments to U.S. companies will account for over $100 billion.

The current deal is an expansion of the previous partnership between Morgan Stanley and Japan's biggest bank. Last year Mitsubishi UFJ invested $9 billion in Morgan Stanley, making it Morgan Stanley's largest investor.

The joint venture announced Wednesday, Morgan Stanley MUFG Loan Partners, will be capitalized at $500,000, the companies said in a press release.

They also announced a deal in which MUFJ subsidiary, Bank of Tokyo-Mitsubishi UFJ, would refer commodities business to Morgan Stanley.

In a separate agreement, MUFG employees will be sent to Morgan Stanley to "maximize the benefits of the strategic alliance."

The venture "provides our clients with even stronger financing capabilities," Morgan Stanley Chief Executive John Mack said in a statement.

The venture could give Morgan Stanley a greater ability to compete with rivals such as JPMorgan Chase & Co, Bank of America Corp and Citigroup Inc, which combined make about two-thirds of U.S. syndicated loans.