TOKYO, April 4 Japanese banks including Sumitomo
Mitsui Banking Corp and Bank of Tokyo-Mitsubishi UFJ are likely
to forgo collateral from Tokyo Electric Power Co for
about 100 billion yen ($962.5 million) loan due for refinancing
this month, sources familiar with the matter said on Friday.
Once enjoying a stellar credit status, the power utility has
become a struggling borrower with uncertain viability in the
wake of Fukushima nuclear crisis, making banks to agree to
extend loans only when backed by collateral.
But the government and lawmakers have been putting pressure
on lenders to stop demanding collateral from the power utility
as the practice could hamper its restructuring efforts.
Major banks are now leaning toward providing unsecured loans
as the government has made bigger commitment to helping end the
Fukushima crisis, said the sources who were not authorised to
discuss the matter publicly.
Sumitomo Mitsui Banking Corp is a unit of Sumitomo Mitsui
Financial Group and Bank of Tokyo-Mitsubishi UFJ is the
banking unit of Mitsubishi UFJ Financial Group.
($1 = 103.8900 Japanese yen)
(Reporting by Taiga Uranaka and Taro Fuse; Editing by Dominic