Sumitomo Mitsui Financial Group plans to issue perpetual subordinated notes in 2026, with proceeds intended for a perpetual subordinated Loan to SMBC. The loan is intended to qualify as Additional Tier 1 Capital and internal TLAC, while SMBC will use the funds for general corporate purposes. Investors face notes with no fixed Maturity and loss absorption provisions.

Key Highlights

  • BofA Securities, J.P. Morgan and Jefferies are named among the underwriters.
  • Sumitomo Mitsui Financial Group plans to issue perpetual subordinated notes.
  • The notes have no fixed maturity or mandatory Redemption date.

Sumitomo Mitsui Financial Group plans to issue perpetual subordinated notes in 2026, directing the proceeds into a perpetual subordinated loan to SMBC. SMBC intends to apply the loan proceeds to general corporate purposes. The notes would have no fixed maturity or mandatory redemption date.

Perpetual Notes For SMBC

The transaction involves an issuer sale of perpetual subordinated notes. Sumitomo Mitsui Financial Group intends to use the net proceeds, after Underwriting commissions and estimated offering expenses, to extend the loan to SMBC. SMBC will use the proceeds for general corporate purposes. BofA Securities, J.P. Morgan and Jefferies are named as underwriters.

Capital Treatment Set Out

The notes are intended to qualify as the group’s Additional Tier 1 Capital under applicable capital-adequacy regulations. They are also intended to qualify as external TLAC instruments under Japanese TLAC Standards. The securities contain provisions for loss absorption in several circumstances. A non-viability event may trigger contractual write-down and cancellation, while a Bankruptcy event carries separate write-down and cancellation provisions. A capital ratio event may result in a going-concern write-down.

Capitalization At March 31

Sumitomo Mitsui Financial Group’s consolidated Capitalization and indebtedness table is presented under IFRS as of March 31, 2026, with an adjustment for the proposed notes.

Terms Carry Loss Absorption

The notes include non-viability, bankruptcy and going-concern loss absorption provisions. A non-viability event involving Sumitomo Mitsui Financial Group or the deterioration of material subsidiaries may lead to write-down and cancellation. The document states that circumstances surrounding a non-viability event are unpredictable. Interest payments could also be affected by the applicable Interest Rate or any reset rate, which could affect the notes’ market value. The offering is being conducted in compliance with that rule, and a qualified independent underwriter is not required because the notes are rated Investment grade.