Filed Pursuant to Rule 424(b)(5)
Registration No. 333-233354

 

The Information in this preliminary prospectus supplement and the accompanying prospectus is incomplete and subject to completion and amendment. This preliminary prospectus supplement and the accompanying prospectus is not an offer to sell, nor does it seek an offer to buy, these securities in any jurisdiction where the offer or sale is not permitted.

 

SUBJECT TO COMPLETION, DATED SEPTEMBER 1, 2020

PRELIMINARY PROSPECTUS SUPPLEMENT

(To prospectus dated August 19, 2019)

 

 

Mizuho Financial Group, Inc.

 

Senior Fixed-to-Floating Rate Notes

Senior Floating Rate Notes

 

 

Mizuho Financial Group, Inc., a joint stock corporation incorporated with limited liability under the laws of Japan (“Mizuho Financial Group” or the “Issuer”), will issue an aggregate principal amount of $             of senior fixed-to-floating rate notes due September              (the “Fixed-to-Floating Rate Notes”). The Fixed-to-Floating Rate Notes will bear interest (i) commencing September     , 2020 to, but excluding, the date that is one year prior to the maturity date of the applicable series of Fixed-to-Floating Rate Notes (the “Fixed Rate Period”), at the fixed rate of         % per annum, payable semi-annually in arrears on March              and September              of each year, with the first fixed rate interest payment to be made on March     , 2021 and (ii) from and including the date that is one year prior to the maturity date of the applicable series of Fixed-to-Floating Rate Notes to, but excluding, the maturity date (the “Floating Rate Period”), at a per annum floating rate equal to a benchmark rate (which will initially be LIBOR for three-month deposits for U.S. dollars (“three-month U.S. dollar LIBOR”)) plus         %, reset quarterly, determined as described under “Description of the Notes—Floating Rate Interest” in this prospectus supplement, payable quarterly in arrears on December              of             , and March             , June              and September              of             . The Fixed-to-Floating Rate Notes will mature on September                .

Mizuho Financial Group will also issue an aggregate principal amount of $             of senior floating rate notes due September              (the “Floating Rate Notes,” and together with the Fixed-to-Floating Rate Notes, the “Notes”). The Floating Rate Notes will bear interest commencing September     , 2020 at a per annum floating rate equal to a benchmark rate (which will initially be three-month U.S. dollar LIBOR) plus         %, reset quarterly, determined as described under “Description of the Notes—Floating Rate Interest” in this prospectus supplement, payable quarterly in arrears on March     , June     , September      and December              of each year, beginning on December     , 2020. The Floating Rate Notes will mature on September             .

Mizuho Financial Group may redeem, at its option, the Notes of each series, in whole, but not in part, on the date that is one year prior to the maturity date of such series of Notes, at the applicable redemption price. See “Description of Notes—Optional Redemption.” In addition, Mizuho Financial Group may at its option redeem the Notes of each series, in whole, but not in part, upon the occurrence of certain changes in Japanese tax law, subject to certain conditions. See “Description of the Notes—Optional Tax Redemption.” The Notes will not be subject to any sinking fund. Each series of the Notes will be represented by one or more global notes deposited with a custodian for and registered in the name of a nominee of The Depository Trust Company (“DTC”), as depositary. Beneficial interests in the Notes will be shown on, and transfers thereof will be effected only through, records maintained by DTC and its direct and indirect participants, including Euroclear Bank SA/NV (“Euroclear”), and Clearstream Banking S.A. (“Clearstream”). The Notes will be issued only in registered form in minimum denominations of $200,000 and integral multiples of $1,000 in excess thereof.

Each series of the Notes is intended to qualify as external total loss-absorbing capacity (“TLAC”) debt under the Japanese TLAC Standard (as defined below). The Notes will be Mizuho Financial Group’s direct, unconditional, unsubordinated and unsecured obligations and rank pari passu and without preference among themselves and with all other unsecured obligations, other than subordinated obligations of Mizuho Financial Group (except for statutorily preferred exceptions) from time to time outstanding. See also “Risk Factors—Risks Relating to the Notes—The Notes will be structurally subordinated to the liabilities of our subsidiaries, including Mizuho Bank and Mizuho Trust & Banking.”

Approval-in-principle has been received for the listing and quotation of the Notes on the Official List of the Singapore Exchange Securities Trading Limited (the “SGX-ST”). The SGX-ST assumes no responsibility for the correctness of any of the statements made, opinions expressed or reports contained herein. Admission of the Notes to the Official List of the SGX-ST and quotation of the Notes on the SGX-ST are not to be taken as an indication of the merits of Mizuho Financial Group, its subsidiaries and associated companies or the Notes.

Investing in the Notes involves risks. You should carefully consider the risk factors set forth in “Item 3.D. Key Information—Risk Factors” of our most recent annual report on Form 20-F filed with the U.S. Securities and Exchange Commission (the “SEC”), and in the “Risk Factors” section beginning on page S-9 of this prospectus supplement before making any decision to invest in the Notes.

 

 

 

Per Fixed-to-Floating Rate Note

Per Floating Rate Note

Total

Public offering price(1)

%

%

$

Underwriting commission

%

%

$

Proceeds, before expenses, to us(1)

%

%

$

 

(1)	Plus accrued interest from September             , 2020, if settlement occurs after that date.

Neither the SEC nor any state securities commission has approved or disapproved of the Notes or passed upon the adequacy or accuracy of this prospectus supplement or the accompanying prospectus. Any representation to the contrary is a criminal offense.

The Notes offered by this prospectus supplement and the accompanying prospectus are being offered by the underwriters, subject to prior sale, withdrawal, cancellation or modification of the offer without notice, to delivery to and acceptance by the underwriters and to certain further conditions. It is expected that the Notes will be delivered in book-entry form only, on or about September     , 2020, through the facilities of DTC and its participants, including Euroclear and Clearstream.

 

 

Joint Lead Managers and Joint Bookrunners

 

Mizuho Securities				Goldman Sachs & Co. LLC
		BofA Securities

 

 

The date of this prospectus supplement is September     , 2020.

TABLE OF CONTENTS

Prospectus Supplement

 

		Page
About this Prospectus Supplement			S-iv
Cautionary Statement Regarding Forward-Looking Statements			S-iv
Presentation of Financial and Other Information			S-v
Prospectus Supplement Summary			S-1
The Offering			S-4
Risk Factors			S-9
Use of Proceeds			S-21
Capitalization and Indebtedness			S-22
Selected Financial and Other Information (U.S. GAAP)			S-23
Supplemental Financial and Other Information (Japanese GAAP)			S-25
Description of the Notes			S-33
Taxation			S-43
Certain ERISA Considerations			S-51
Underwriting (Conflicts of Interest)			S-53
Experts			S-60
Legal Matters			S-60
Incorporation by Reference			S-61

Prospectus

 

		Page
About this Prospectus			1
Cautionary Statement Regarding Forward-Looking Statements			3
Risk Factors			4
Mizuho Financial Group, Inc.			5
Capitalization and Indebtedness			6
Use of Proceeds			7
Description of the Debt Securities			8
Taxation			25
Certain ERISA Considerations			25
Plan of Distribution (Conflicts of Interest)			25
Experts			27
Legal Matters			27
Enforcement of Civil Liabilities			27
Where You Can Find More Information			28

 

S-i

Japan

The Notes have not been and will not be registered under the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948), as amended, (the “Financial Instruments and Exchange Act”) and are subject to the Special Taxation Measures Act of Japan (Act No. 26 of 1957), as amended (the “Special Taxation Measures Act”). The Notes may not be offered or sold in Japan or to, or for the benefit of, any resident of Japan (which term as used in this sentence means any person resident of Japan, including any corporation or other entity organized under the laws of Japan) or to others for reoffering or resale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Act and any other applicable laws, regulations and governmental guidelines of Japan. See “Underwriting (Conflicts of Interest).” The Notes are not, as part of the distribution by the underwriters pursuant to the underwriting agreement dated the date hereof at any time, to be directly or indirectly offered or sold to, or for the benefit of, any person other than a beneficial owner that is, (i) for Japanese tax purposes, neither (x) an individual resident of Japan or a Japanese corporation, nor (y) an individual non-resident of Japan or a non-Japanese corporation that in either case is a person having a special relationship with Mizuho Financial Group as described in Article 6, Paragraph 4 of the Special Taxation Measures Act (a “specially-related person of Mizuho Financial Group”) or (ii) a Japanese designated financial institution, designated in Article 6, Paragraph 9 of the Special Taxation Measures Act, except as specifically permitted under the Special Taxation Measures Act. BY SUBSCRIBING FOR THE NOTES, AN INVESTOR WILL BE DEEMED TO HAVE REPRESENTED IT IS A PERSON WHO FALLS INTO THE CATEGORY OF (i) OR (ii) ABOVE.

Interest payments on the Notes generally will be subject to Japanese withholding tax unless it is established that such Notes are held by or for the account of a beneficial owner that is (i) for Japanese tax purposes, neither (x) an individual resident of Japan or a Japanese corporation, nor (y) an individual non-resident of Japan or a non-Japanese corporation that in either case is a specially-related person of Mizuho Financial Group, (ii) a Japanese designated financial institution described in Article 6, Paragraph 9 of the Special Taxation Measures Act which complies with the requirement for tax exemption under that paragraph or (iii) a Japanese public corporation, financial institution or financial instruments business operator described in Article 3-3, Paragraph 6 of the Special Taxation Measures Act which complies with the requirement for tax exemption under that paragraph.

Interest payments on the Notes to an individual resident of Japan, to a Japanese corporation not described in the preceding paragraph, or to an individual non-resident of Japan or a non-Japanese corporation that in either case is a specially-related person of Mizuho Financial Group will be subject to deduction in respect of Japanese income tax at a current rate of 15.315% of the amount of such interest.

The European Economic Area

PROHIBITION OF SALES TO EEA AND UK RETAIL INVESTORS—The Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the European Economic Area, or the EEA, or the United Kingdom (the “UK”). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU, or MiFID II as amended; or (ii) a customer within the meaning of Directive 2016/97/EU, as amended, where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II. Consequently, no key information document required by Regulation (EU) No 1286/2014, or the PRIIPs Regulation as amended, for offering or selling the Notes or otherwise making them available to any retail investors in the EEA or the UK has been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor in the EEA or the UK may be unlawful under the PRIIPs Regulation.

 

S-ii

United Kingdom

There are restrictions on the offer and sale of the notes in the UK. All applicable provisions of the Financial Services and Markets Act 2000, or FSMA, with respect to anything done by any person in relation to the notes in, from, or otherwise involving, the UK must be complied with. See “Underwriting—Notice to Prospective Investors in the UK.”

This prospectus supplement is being distributed only to and is directed only at persons located outside the UK or in the UK to (i) persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Financial Promotion Order”); or (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Financial Promotion Order; or (iii) persons to whom it may otherwise lawfully be communicated (all such persons together being referred to as “relevant persons”). This prospectus supplement must not be acted on or relied on in the UK by persons who are not relevant persons. In the UK, any investment or investment activity to which this prospectus supplement relates is only available to, and will be engaged in with, relevant persons.

Singapore

SINGAPORE SFA PRODUCT CLASSIFICATION: Solely in connection with its obligations under Section 309B of the Securities and Futures Act (Chapter 289) of Singapore (the “SFA”) and the Securities and Futures (Capital Markets Products) Regulations 2018 of Singapore (the “CMP Regulations 2018”), the Issuer has determined, and hereby notifies all relevant persons (as defined in Section 309(A)(1) of the SFA) of the classification of the Notes as prescribed capital markets products (as defined in the CMP Regulations 2018) and Excluded Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).

 

S-iii

ABOUT THIS PROSPECTUS SUPPLEMENT

This document consists of two parts. The first part is this prospectus supplement, which describes the specific terms of the offering of the Notes and also adds to, updates and changes information contained in the prospectus filed with the SEC dated August 19, 2019, and the documents incorporated by reference in this prospectus supplement. The second part is the above-mentioned prospectus, to which we refer as the “accompanying prospectus.” The accompanying prospectus contains a description of the senior and subordinated debt securities and gives more general information, some of which may not apply to the Notes. If the description of the Notes in this prospectus supplement differs from the description in the accompanying prospectus, the description in this prospectus supplement supersedes the description in the accompanying prospectus.

We have not, and the underwriters have not, authorized any other person to provide you with any information other than that contained in or incorporated by reference into this prospectus supplement, in the accompanying prospectus or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. “Incorporated by reference” means that we can disclose important information to you by referring you to another document filed separately with the SEC. We are not responsible for, and can provide no assurance as to the accuracy of, any other information that any other person may give you. We are not making, nor are the underwriters making, an offer to sell the Notes in any jurisdiction where the offer or sale is not permitted. You should not assume that the information appearing in this prospectus supplement, the accompanying prospectus or in any free writing prospectus prepared by or on behalf of us or to which we have referred you, including any information incorporated by reference herein or therein, is accurate as of any date other than its respective date. Our business, financial condition, results of operations and prospects may have changed since those respective dates.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This prospectus supplement, the accompanying prospectus and the documents incorporated by reference herein and therein contain in a number of places forward-looking statements regarding our intent, belief, targets or current expectations of our management with respect to our financial condition and future results of operations. These statements constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, or the Exchange Act. In many cases, but not all, we use such words as “aim,” “anticipate,” “believe,” “endeavor,” “estimate,” “expect,” “intend,” “may,” “plan,” “probability,” “project,” “risk,” “seek,” “should,” “strive,” “target” and similar expressions in relation to us or our management to identify forward-looking statements. You can also identify forward-looking statements by discussions of strategy, plans or intentions. These statements reflect our current views with respect to future events and are subject to risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, our actual results may vary materially from those we currently anticipate.

We have identified some of the risks inherent in forward-looking statements in “Item 3.D. Key Information—Risk Factors” of our most recent annual report on Form 20-F and in the “Risk Factors” section of this prospectus supplement. Other factors could also adversely affect our results or the accuracy of forward-looking statements in this prospectus supplement, the accompanying prospectus or the documents incorporated by reference herein and therein, and you should not consider these to be a complete set of all potential risks or uncertainties.

The forward-looking statements included or incorporated by reference in this prospectus supplement and the accompanying prospectus are made only as of the dates on which such statements were made. We expressly disclaim any obligation or undertaking to release any update or revision to any forward-looking statement contained herein or therein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.

 

S-iv

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

In this prospectus supplement, the accompanying prospectus and any documents incorporated by reference herein or therein, “MHFG,” “Mizuho Group,” “we,” “us,” and “our” refer to Mizuho Financial Group, Inc. and, unless the context indicates otherwise, its consolidated subsidiaries. “Mizuho Financial Group” refers to Mizuho Financial Group, Inc. Furthermore, unless the context indicates otherwise, these references are intended to refer to us as if we had been in existence in our current form for all periods referred to herein. We use the word “you” to refer to prospective investors in the Notes and the word “Noteholder” or “Noteholders” to refer to the holders of the Notes.

Our primary financial statements for SEC reporting purposes are prepared on an annual and semi-annual basis in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), while our financial statements for reporting in our jurisdiction of incorporation and Japanese bank regulatory purposes are prepared in accordance with accounting principles generally accepted in Japan (“Japanese GAAP”). Unless otherwise specified, for purposes of this prospectus supplement, we have presented our financial information in accordance with U.S. GAAP. Unless otherwise stated or otherwise required by the context, all amounts in our financial statements are expressed in yen.

There are certain differences between U.S. GAAP and Japanese GAAP. For a description of certain differences between U.S. GAAP and Japanese GAAP, see “Item 5. Operating and Financial Review and Prospects—Reconciliation with Japanese GAAP” in our most recent annual report on Form 20-F filed with the SEC. You should consult your own professional advisers for a more complete understanding of the differences between U.S. GAAP, Japanese GAAP and the generally accepted accounting principles of other countries and how those differences might affect the financial information contained or incorporated by reference in this prospectus supplement or the accompanying prospectus.

Financial information for us contained or incorporated by reference herein or in the accompanying prospectus is presented in accordance with U.S. GAAP or Japanese GAAP, as specified herein or in the relevant document being incorporated by reference. See “Incorporation by Reference” for a list of documents being incorporated by reference herein.

In this prospectus supplement and the accompanying prospectus, references to “U.S. dollars,” “dollars,” “U.S. $” and “$” refer to the lawful currency of the United States, those to “EUR” and “€” refer to the currency of the European Economic and Monetary Union and those to “yen” and “¥” refer to the lawful currency of Japan. This prospectus supplement, the accompanying prospectus or the documents incorporated by reference herein and therein may contain a translation of certain Japanese yen amounts into U.S. dollars for your convenience. However, these translations should not be construed as representations that such yen amounts have been, could have been or could be converted into dollars at the relevant rate or at all.

In this prospectus supplement and the accompanying prospectus, yen figures and percentages presented in accordance with U.S. GAAP have been rounded to the figures shown, and yen figures and percentages presented in accordance with Japanese GAAP have been truncated to the figures shown, except for figures based on managerial accounting, which are rounded, and, in each case, unless otherwise specified. However, in some cases, figures presented in tables have been adjusted to match the sum of the figures with the total amount, and such figures may also be referred to in the related text.

Our fiscal year end is March 31. References to years not specified as being fiscal years are to calendar years.

In this prospectus supplement, all of our financial information is presented on a consolidated basis, unless we state otherwise.

 

S-v

 

S-1

 

S-2

 

S-3

 

S-4

 

S-5

 

S-6

 

S-7

 

S-8

RISK FACTORS

Investing in the Notes involves risks. You should consider carefully the risks relating to the Notes described below, as well as the other information presented in, or incorporated by reference into, this prospectus supplement and the accompanying prospectus, before you decide whether to invest in the Notes. If any of these risks actually occurs, our business, financial condition and results of operations could suffer, and the trading price and liquidity of the Notes offered could decline, in which case you may lose all or part of your investment. The following does not describe all the risks of an investment in the Notes. Prospective investors should consult their own financial and legal advisers about risks associated with investment in a particular series of Notes and the suitability of investing in the Notes in light of their particular circumstances.

This prospectus supplement and the accompanying prospectus also contain forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including the risks described below, elsewhere in this prospectus supplement and in “Item 3.D. Key Information—Risk Factors” of our annual report on Form 20-F for the fiscal year ended March 31, 2020, which is incorporated herein by reference.

Risks Related to Our Business

For information on risks relating to our business, see “Item 3.D. Key Information—Risk Factors” in our most recent annual report on Form 20-F, which is incorporated by reference in this prospectus supplement, and similar information in any other documents incorporated by reference herein.

Risks Relating to the Notes

The Notes will be structurally subordinated to the liabilities of our subsidiaries, including Mizuho Bank and Mizuho Trust & Banking.

Your claim as a Noteholder is structurally subordinated to the liabilities of our banking and other subsidiaries, including our subsidiaries’ liabilities for deposits, borrowed money, derivative transactions and trade payables. As a Noteholder, you will only be entitled to assert a claim as a creditor of Mizuho Financial Group that is to be paid out of Mizuho Financial Group’s assets. If any of our subsidiaries becomes subject to insolvency or liquidation proceedings, you will have no right to proceed against such subsidiary’s assets.

Mizuho Financial Group is a holding company that currently has no significant assets other than its investments in, or loans to, its subsidiaries, including Mizuho Bank and Mizuho Trust & Banking. Mizuho Financial Group’s ability to service its debt obligations, including its obligations under the Notes, thus depends on the dividends, loan payments and other funds Mizuho Financial Group receives from its subsidiaries. Mizuho Financial Group may not be able to receive such funds from a subsidiary due to adverse changes in its financial performance or material deterioration in its financial condition, restrictions imposed as a result of such adverse change or deterioration by relevant laws and regulations, including banking and other regulations (such as loss absorption requirements) and limitations under general corporate law, or any contractual obligations applicable to such subsidiary. Furthermore, if a subsidiary becomes subject to insolvency or liquidation proceedings, Mizuho Financial Group’s right to participate in such subsidiary’s assets will be subject to the prior claims of the creditors and any preference shareholders of the subsidiary, except where Mizuho Financial Group is a creditor or preference shareholder with claims that are recognized to be ranked either ahead of or pari passu with such claims. As a result, you may not recover your investment in the Notes in full or at all even though the investors in or creditors of our subsidiaries may recover their investments in full.

Mizuho Financial Group’s loans to, or investments in capital instruments issued by, its subsidiaries made or to be made with the net proceeds from the sale of its instruments may contain contractual mechanisms that, upon the occurrence of a trigger event relating to prudential or financial condition or other events applicable to Mizuho

 

S-9

Financial Group or its subsidiaries under regulatory requirements, including the Internal TLAC (as defined below) requirements in Japan, will result in a write-down, write-off or conversion into equity of such loans or investments, or other changes in the legal or regulatory form or the ranking of the claims Mizuho Financial Group has against the subsidiaries. For example, to ensure that each of its material subsidiaries in Japan deemed systemically important by the FSA maintains the required minimum level of Internal TLAC under the Internal TLAC requirements in Japan, Mizuho Financial Group may extend to such subsidiaries, using the net proceeds from the sale of the senior debt securities and other debt instruments, subordinated loans that qualify as Internal TLAC instruments pursuant to the Internal TLAC requirements in Japan, including those containing contractual loss absorption provisions (“Contractual Loss Absorption Provisions”) that will discharge or extinguish the loans or convert them into ordinary shares of the subsidiaries if the FSA determines that the relevant subsidiaries are non-viable due to material deterioration in their financial condition after recognizing that they are or are likely to be unable to fully perform their obligations with their assets, or that they have suspended, or are likely to suspend, repayment of their obligations. Any such write-down, write-off or conversion into equity, or changes in the legal or regulatory form or the ranking, or the triggering of Contractual Loss Absorption Provisions, could adversely affect Mizuho Financial Group’s ability to obtain repayment of such loans and investments and to meet its obligations under the Notes as well as the value of the Notes.

The Notes may become subject to loss absorption if Mizuho Financial Group becomes subject to orderly resolution measures under the Deposit Insurance Act of Japan and Japanese insolvency laws. As a result, the value of the Notes could be materially adversely affected, and you may lose all or a portion of your investments.

In November 2015, the Financial Stability Board issued the final TLAC standard for global systemically important banks (“G-SIBs”), including us. The Financial Stability Board’s TLAC standard is designed to ensure that, if a G-SIB fails, it has sufficient loss-absorbing and recapitalization capacity available in resolution to implement an orderly resolution that minimizes the impact on financial stability, thereby ensuring the continuity of critical functions and avoiding exposing public funds to loss. The Financial Stability Board’s TLAC standard defines a minimum requirement for the instruments and liabilities that should be readily available to absorb losses in resolution. For more information regarding the Financial Stability Board’s TLAC standards, see “Item 4.B. Information on the Company—Business Overview—Supervision and Regulation—Japan—Total Loss Absorbing Capacity” in our annual report on Form 20-F for the fiscal year ended March 31, 2020, which is incorporated herein by reference. The FSA published its policy describing its approach for the introduction of this standard in Japan in April 2016, and a revised version of this document was published in April 2018 (the “FSA’s Approach”). In March 2019, the FSA published regulatory notices and related materials to implement the TLAC requirements in Japan. The TLAC standard set forth in these FSA documents (the “Japanese TLAC Standard”), which became applicable to G-SIBs in Japan from March 31, 2019, and the FSB’s TLAC standard requires Domestic Resolution Entities (as defined below) designated for Covered SIBs (as defined below) to meet certain minimum external TLAC requirements and to cause any of their material subsidiaries in Japan deemed systemically important by the FSA or their foreign subsidiaries subject to TLAC or similar requirements in the relevant jurisdictions to maintain a certain minimum level of capital and debt having internal loss-absorbing and recapitalization capacity (“Internal TLAC”). The FSA designated as resolution entities in Japan (the “Domestic Resolution Entities”) the ultimate holding company in Japan of each Japanese G-SIB as well as the ultimate holding company in Japan of a domestic systemically important bank in Japan which is deemed to be in particular need of a cross-border resolution arrangement and to be of particular systemic significance to the Japanese financial system in the event of its failure (such Japanese G-SIBs, together with such domestic systemically important bank, the “Covered SIBs”). Under the Japanese TLAC Standard, the FSA designated us as the Domestic Resolution Entity for the Mizuho Group, which is subject to the external TLAC requirements in Japan, and also designated the Mizuho Bank, the Mizuho Trust & Banking and Mizuho Securities as our material subsidiaries in Japan, which are subject to the Internal TLAC requirements in Japan. Under the Japanese TLAC Standard, unsecured senior debt issued by the Domestic Resolution Entity for a Japanese G-SIB is not required to include any contractual write-down, write-off or conversion provisions in order to qualify as external TLAC debt. In addition, unsecured senior debt issued by the Domestic Resolution Entity for a Japanese G-SIB is not required

 

S-10

to include any subordination provisions in order to qualify as external TLAC debt, so long as its creditors are recognized as structurally subordinated to the creditors of its subsidiaries and affiliates by the FSA on the grounds that the amount of excluded liabilities as defined in the Japanese TLAC Standard of such Domestic Resolution Entity ranking pari passu or junior to its unsecured senior liabilities does not exceed 5% of its external TLAC in principle, while the Internal TLAC incurred by material subsidiaries of a Japanese G-SIB is required to include the Contractual Loss Absorption Provisions and to be subordinated to such entity’s excluded liabilities. The Notes are intended to qualify as external TLAC debt under the Japanese TLAC Standard, due in part to their structural subordination.

The Notes are expected to become subject to loss absorption if Mizuho Financial Group becomes subject to orderly resolution measures under the Deposit Insurance Act and Japanese insolvency laws. The resolution framework for financial institutions under current Japanese laws and regulations includes (i) measures applied to financial institutions that are solvent on a balance sheet basis and (ii) orderly resolution measures applied to financial institutions that have failed or are deemed likely to fail. The framework applies to banks and certain other financial institutions as well as financial holding companies, such as Mizuho Financial Group. In the Japanese TLAC Standard and the FSA’s Approach, the FSA expressed its view that Single Point of Entry (“SPE”) resolution, in which a single national resolution authority applies its resolution tools to the ultimate holding company in Japan of a group, would be the preferred strategy for resolution of Covered SIBs. However, it is uncertain which resolution strategy or specific measures will be taken in a given case, including whether or not the SPE resolution strategy is to be chosen and implemented in a given case, and orderly resolution measures may be applied without implementing any of the measures described in (i) above. Under a possible model of SPE resolution described in the Japanese TLAC Standard, if the FSA determines that a material subsidiary in Japan of a financial institution that is a Japanese G-SIB is non-viable due to a material deterioration in its financial condition after recognizing that it is, or is likely to be, unable to fully perform its obligations with its assets, or that it has suspended, or is likely to suspend, repayment of its obligations, and issues an order concerning restoration of financial soundness, including recapitalization and restoration of liquidity of such material subsidiary, to the Domestic Resolution Entity for the financial institution under Article 52-33, Paragraph 1 of the Banking Act of Japan (Act No. 59 of 1981, as amended), the material subsidiary’s Internal TLAC instruments will be written off or, if applicable, converted into equity in accordance with the applicable Contractual Loss Absorption Provisions of such Internal TLAC instruments. Following the write-off or conversion of Internal TLAC instruments, if the Prime Minister recognizes that the financial institution is or is likely to be unable to fully perform its obligations with its assets, or that it has suspended, or is likely to suspend, repayment of its obligations, as a result of the financial institution’s loans to, or other investment in, its material subsidiaries that are designated by FSA as being systemically important or that are subject to TLAC requirements or similar requirements imposed by a relevant foreign authority, becoming subject to loss absorption or otherwise, and further recognizes that the failure of such financial institution is likely to cause a significant disruption to the Japanese financial market or system, the Prime Minister may, following deliberation by the Financial Crisis Management Meeting, confirm that measures set forth in Article 126-2, Paragraph 1, Item 2 of the Deposit Insurance Act, generally referred to as specified item 2 measures (tokutei dai nigo sochi), need to be applied to the financial institution for its orderly resolution. Any such confirmation by the Prime Minister would also trigger the point of non-viability clauses of Additional Tier 1 and Tier 2 instruments issued by the financial institution, causing such instruments to be written off, or if applicable, converted into equity.

Under current Japanese laws and regulations, upon the application of specified item 2 measures (tokutei dai nigo sochi), a financial institution will be placed under special supervision (tokubetsu kanshi) by, or if the Prime Minister so orders, under special control (tokutei kanri) of, the Deposit Insurance Corporation. In an orderly resolution, if the financial institution is placed under special control (tokutei kanri), pursuant to Article 126-5 of the Deposit Insurance Act, the Deposit Insurance Corporation would control the operation and management of the financial institution’s business, assets and liabilities, including the potential transfer to a bridge financial institution established by the Deposit Insurance Corporation as its subsidiary, or such other financial institution as the Deposit Insurance Corporation may determine, of the financial institution’s systemically important assets and liabilities, which in the case of Mizuho Financial Group would be expected to include the shares of Mizuho

 

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Bank, Mizuho Trust & Banking, Mizuho Securities and other material subsidiaries based on the Japanese TLAC Standard. Under the Japanese TLAC Standard, to facilitate that transfer, the Prime Minister may prohibit by its designation creditors of the financial institution from attaching any of our assets and claims which are to be transferred to a bridge financial institution or another financial institution pursuant to Article 126-16 of the Deposit Insurance Act. See also “Item 4. B. Information on the Company—Business Overview—Supervision and Regulation—Japan—Governmental Measures to Treat Troubled Institutions” in our annual report on Form 20-F for the fiscal year ended March 31, 2020, which is incorporated herein by reference. In addition, with respect to the Notes, given they are governed by the laws of the State of New York, the terms of the Notes will, in order to satisfy the requirements under the Japanese TLAC Standard, expressly limit the ability of the Noteholders to initiate any action to attach any of our assets, the attachment of which is so prohibited by the Prime Minister under Article 126-16 of the Deposit Insurance Act (or any successor provision thereto) for a period of 30 days from and including the date upon which the Prime Minister confirms that specified item 2 measures (tokutei dai nigo sochi) need to be applied to Mizuho Financial Group. See “Description of the Debt Securities—Limitation on Actions for Attachment” in the accompanying prospectus. The value of assets subject to a prohibition of attachment may decline while such prohibition is in effect, and following such period, Noteholders will be unable to attach any assets that have been transferred to a bridge financial institution or such other financial institution as part of our orderly resolution. The Deposit Insurance Corporation would also control the repayment of liabilities of the financial institution, and, ultimately, facilitate the orderly resolution of the financial institution through court-administrated insolvency proceedings. The Deposit Insurance Corporation has broad discretion in its application of these measures in accordance with the Deposit Insurance Act, Japanese insolvency laws and other relevant laws.

Under current Japanese laws and regulations, if Mizuho Financial Group becomes subject to specified item 2 measures (tokutei dai nigo sochi), the application of specified item 2 measures (tokutei dai nigo sochi) or other measures by, or any decision of, the Prime Minister, the Deposit Insurance Corporation or a Japanese court may result in your rights as a Noteholder or the value of your investment in the Notes being adversely affected. Under the Japanese TLAC Standard, it is currently expected that the Notes will not be transferred to a bridge financial institution or other transferee in the orderly resolution process but will remain as Mizuho Financial Group’s liabilities subject to court-administered insolvency proceedings. On the other hand, in an orderly resolution process, the shares of Mizuho Financial Group’s material subsidiaries may be transferred to a bridge financial institution or other transferee, pursuant to the authority of the Deposit Insurance Corporation to represent and manage and dispose of Mizuho Financial Group’s assets under Article 126-5 of the Deposit Insurance Act, with the permission of a Japanese court in accordance with Article 126-13 of the Deposit Insurance Act, which permission may be granted by court in accordance with the Deposit Insurance Act if (i) the financial institution is under special supervision (tokubetsu kanshi) by, or under special control (tokutei kanri) of, the Deposit Insurance Corporation pursuant to the Deposit Insurance Act, and (ii) the financial institution is, or is likely to be, unable to fully perform its obligations with its assets, or the financial institution has suspended, or is likely to suspend, repayment of its obligations, and Mizuho Financial Group would only be entitled to receive consideration representing the fair values of such shares, which could be significantly less than the book values of such shares. With respect to such transfer, given the Notes are governed by the laws of the State of New York, in order to satisfy the requirements under the Japanese TLAC Standard, Noteholders expressly acknowledge, accept, consent and agree to any transfer of our assets (including shares of our subsidiaries) or liabilities, or any portions thereof, with the permission of a Japanese court in accordance with Article 126-13 of the Deposit Insurance Act (or any successor provision thereto), including any such transfer made pursuant to the authority of the Deposit Insurance Corporation to represent and manage and dispose of Mizuho Financial Group’s assets under Article 126-5 of the Deposit Insurance Act (or any successor provision thereto). See “Description of the Debt Securities—Permitted Transfer of Assets or Liabilities” in the accompanying prospectus. Following such transfer, the recoverable value of Mizuho Financial Group’s residual assets in court-administered insolvency proceedings may not be sufficient to fully satisfy any payment obligations that Mizuho Financial Group may have under its liabilities, including the Notes. Moreover, the Notes will not be insured or guaranteed by the Deposit Insurance Corporation or any other government agency or insurer. Accordingly, the Noteholders may lose all or a portion of their investments in the Notes in court-administered insolvency proceedings.

 

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The circumstances surrounding or triggering orderly resolution are unpredictable, and the Japanese TLAC Standard is subject to change.

The application of orderly resolution under the Deposit Insurance Act is inherently unpredictable and depends on a number of factors that may be beyond Mizuho Financial Group’s control. The commencement of the orderly resolution process under the Deposit Insurance Act depends on, among other things, a determination by the Prime Minister, following deliberation by the Financial Crisis Management Meeting, regarding Mizuho Financial Group’s viability, or the viability of one or more of Mizuho Financial Group’s subsidiaries, and the risk that their failures may cause a significant disruption to the financial market or systems in Japan. Under the Japanese TLAC Standard, it is possible that specified item 2 measures (tokutei dai nigo sochi) may be applied to us as a result of, among other things, absorption of losses by us on our loans to or investments in, or any other Internal TLAC of, any of our material subsidiaries or material sub-groups in Japan that are designated as systemically important by the FSA or any of our foreign subsidiaries that are subject to TLAC requirements or similar requirements imposed by a relevant foreign authority, prior to the failure of such subsidiary, pursuant to the terms of such loans, investments or other Internal TLAC or in accordance with applicable Japanese or foreign laws or regulations then in effect. However, under the Japanese TLAC Standard, the actual measures to be taken will be determined by the relevant authorities on a case-by-case basis, and, as a result, it may be difficult to predict when, if at all, Mizuho Financial Group may become subject to an orderly resolution process. Accordingly, the market value of the Notes may not necessarily be evaluated in a manner similar to other types of notes issued by non-financial institutions or by financial institutions subject to different regulatory regimes. For example, any indication that Mizuho Financial Group is approaching circumstances that could result in Mizuho Financial Group becoming subject to an orderly resolution process could also have an adverse effect on the market price and liquidity of the Notes.

In addition, there has been no application of the orderly resolution measures under the Deposit Insurance Act described in this prospectus supplement to date. Such measures are untested and will be subject to interpretation and application by the relevant authorities in Japan. It is uncertain how and under what standards the relevant authorities would determine that Mizuho Financial Group is, or is deemed likely to be unable to fully perform its obligations with its assets, or that Mizuho Financial Group has suspended, or is deemed likely to suspend, repayment of its obligations in determining whether to commence an orderly resolution process, and it is possible that particular circumstances that seem similar may lead to different results. In addition, the sequence and specific actions that will be taken in connection with orderly resolution measures and their impact on the Notes are uncertain. It is also uncertain whether a sufficient amount of assets will ultimately be available to the Noteholders. Mizuho Financial Group’s creditors, including the Noteholders, may encounter difficulty in challenging the application of orderly resolution measures to Mizuho Financial Group.

Although Mizuho Financial Group expects the Notes to qualify as external TLAC due in part to their structural subordination, there is no assurance that the Notes will qualify as such, which could affect our ability to meet the minimum TLAC requirements and subject us to potential adverse regulatory action. The Japanese TLAC Standard requires each Japanese G-SIB to hold external TLAC eligible instruments in an amount not less than 16% of its risk-weighted assets and 6% of the applicable Basel III leverage ratio denominator from March 31, 2019, and not less than 18% of its risk-weighted assets and 6.75% of the applicable Basel III leverage ratio denominator from March 31, 2022. Under the Japanese TLAC Standard, Japanese G-SIB’s access to Japan’s deposit insurance fund reserves qualifies as TLAC in the amount equivalent to 2.5% of consolidated risk-weighted assets from March 31, 2019 and 3.5% of consolidated risk-weighted assets from March 31, 2022. As the Japanese TLAC Standard is subject to change, if such changes occur in the future, may result in us issuing debt instruments in the future with term that differ from those of the Notes, which in turn could adversely affect the value of the Notes.

 

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The Notes are unsecured obligations.

Because the Notes are unsecured obligations, their repayment may be compromised if:

 

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Mizuho Financial Group enters into bankruptcy, liquidation, rehabilitation or other winding-up proceedings;

 

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Mizuho Financial Group defaults in payment under our secured indebtedness or other unsecured indebtedness; or

 

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any of our indebtedness is accelerated.

If any of these events occurs, our assets may not be sufficient to pay amounts due on the Notes.

The Indenture and the Notes contain very limited restrictive covenants and provide limited protection in the event of a change in control.

The Indenture in respect of the Notes and the Notes do not contain any financial covenants or other restrictions on our ability to pledge or dispose of assets or to secure other indebtedness, pay dividends on our shares of common stock, incur indebtedness or our ability to issue new securities or repurchase our outstanding securities. These or other actions by us could adversely affect the ability of Mizuho Financial Group to pay amounts due on the Notes. In addition, the Indenture and the Notes do not contain any covenants or other provisions that afford more than limited protection to Noteholders in the event of a change in control. See “Description of the Debt Securities—Covenants” in the accompanying prospectus.

There is no prior market for the Notes, and the Notes may have limited liquidity.

There is no existing market for the Notes. Approval-in-principle has been received for the listing of, and quotation for, the Notes on the SGX-ST, but there can be no assurance that any active trading market for the Notes will develop or be sustained or whether, or at what price, Noteholders will be able to sell or otherwise transfer their Notes. The liquidity of any trading market for the Notes will depend upon the number of Noteholders, our results of operations and financial condition, the market for similar securities, the interest of securities dealers in making a market in the Notes and other factors. Although certain underwriters have informed us that they intend to make a market in the Notes, such underwriters are not obligated to do so, and any such market-making activity will be subject to the limits imposed by applicable law and may be interrupted or discontinued at any time without notice. If an active trading market for the Notes does not develop or is not sustained, the market price and liquidity of the Notes may be adversely affected and you may be unable to resell our Notes or may only be able to sell them at a substantial discount.

The ratings on the Notes could be lowered, suspended or withdrawn, and Mizuho Financial Group’s credit ratings may not reflect all risks of an investment in the Notes.

We intend to apply for credit ratings for the Notes. Mizuho Financial Group’s credit ratings may not reflect the potential impact of all risks relating to the market value of the Notes. However, real or anticipated changes in Mizuho Financial Group’s credit ratings will generally affect the market value of the Notes.

In addition, other rating agencies may assign credit ratings to the Notes with or without any solicitation from us and without any provision of information from us. A rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal, the assignment of new ratings that are lower than existing ratings, or a downgrade or potential downgrade in the ratings assigned to us, our subsidiaries or any of our respective securities and could reduce the scope of potential investors in the Notes and adversely affect the price and liquidity of the Notes. We have no obligation to inform Noteholders of any such downgrade, suspension, withdrawal or revision.

 

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Additional Considerations Relating to LIBOR and a Benchmark Transition Event

The following discussion of risks should be read together with the terms of the floating interest rate of the Notes under “Description of the Notes—Floating Rate Interest” and the benchmark transition provisions under “Description of the Notes—Floating Rate Interest—Effect of Benchmark Transition Event”, which define and further describe a number of terms and concepts referred to below.

Uncertainty as to the future regulation and reform of LIBOR and other benchmarks may adversely affect three-month U.S. Dollar LIBOR and other benchmarks and therefore the return on and the market value of the Notes.

LIBOR and other interest rate, equity, foreign exchange rate and other types of indices which are deemed to be “benchmarks,” including those in widespread and long-standing use, have been the subject of recent international, national and other regulatory scrutiny and initiatives and proposals for reform. Some of these reforms are already effective while others are still to be implemented or are under consideration. These reforms may cause such benchmarks to perform differently than in the past, or to disappear entirely, or have other consequences which cannot be predicted. Any such consequence could have a material adverse effect on the return on, value of and market for the Notes. Any of the benchmark reforms which have been proposed or implemented, or the general increased regulatory scrutiny of LIBOR and other benchmarks, could increase the costs and risks of administering or otherwise participating in the setting of such benchmarks and complying with regulations or requirements relating to benchmarks. Such factors may have the effect of discouraging market participants from continuing to administer or contribute to certain benchmarks, trigger changes in the rules or methodologies used in certain benchmarks or lead to the disappearance of certain benchmarks. In particular, changes in the manner of administration of LIBOR could result in adverse consequences to the applicable interest rate on the Notes, which could adversely affect the return on, value of and market for the Notes.

The Floating Interest Rate will be calculated using alternative methods if three-month U.S. dollar LIBOR is not quoted on a particular day and will be calculated using a different reference rate if a Benchmark Transition Event and its related Benchmark Replacement Date occur.

The U.K. Financial Conduct Authority, which regulates LIBOR, announced in July 2017 that it will no longer persuade or compel banks to submit rates for the calculation of LIBOR to the administrator of LIBOR after 2021. This announcement indicates that the continuation of LIBOR on the current basis cannot and will not be guaranteed after 2021. It is impossible to predict whether and to what extent banks will continue to provide LIBOR submissions to the administrator of LIBOR or whether any additional reforms to LIBOR may be enacted in the UK or elsewhere.

Under the terms of the Notes, the Floating Interest Rate (as defined below) on the Notes initially is based on three-month U.S. dollar LIBOR. If three-month U.S. dollar LIBOR is not quoted on the Reuters screen page as described in this prospectus supplement on a relevant Floating Interest Determination Date (as defined below) (but a Benchmark Transition Event (as defined below) and its related Benchmark Replacement Date (as defined below) have not occurred), such rate will be determined using the applicable alternative method described under “Description of the Notes—Floating Rate Interest.” In such case, the final alternative method for determining such rate is to use the Floating Interest Rate in respect of the immediately preceding Floating Interest Period (as defined below), or, in the case of the first Floating Interest Period for the Fixed-to-Floating Rate Notes, the Floating Interest Rate shall be the fixed rate applied to the Fixed-to-Floating Rate Notes during the Fixed Rate Period.

If we or our Designee (as defined below) determines that a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to three-month U.S. dollar LIBOR, then we, in our sole discretion, or our Designee, after consultation with us, will determine a Benchmark Replacement (as defined below) in accordance with the benchmark transition provisions described below under “Description of the

 

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Notes—Floating Rate Interest—Effect of Benchmark Transition Event” (however, if Mizuho Financial Group or its Designee determines that a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to three-month U.S. dollar LIBOR, but for any reason the Benchmark Replacement has not been determined as of the relevant Floating Interest Determination Date (as defined below), the Floating Interest Rate for the applicable Floating Interest Period will be equal to the Floating Interest Rate on the last Floating Interest Determination Date for the relevant Notes, as determined by Mizuho Financial Group or its Designee). After such a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to three-month U.S. dollar LIBOR, the Floating Interest Rate on the Notes will no longer be determined by reference to three-month U.S. dollar LIBOR, but instead will be determined by us or our Designee by reference to the Benchmark Replacement. The Benchmark Replacement may include adjustments and technical, administrative or operational changes described in the benchmark transition provisions if we, in our sole discretion, or our Designee, after consultation with us, determine they are required.

The interests of Mizuho Financial Group or its Designee in making the determinations described above may be adverse to your interests as a holder of the Notes. The selection of a Benchmark Replacement, and any decisions, determinations or elections made by us or our Designee in connection with implementing a Benchmark Replacement with respect to the Notes in accordance with the benchmark transition provisions could result in adverse consequences to the applicable Floating Interest Rate on the Notes, which could adversely affect the return on, value of and market for the Notes. Further, there is no assurance that the characteristics of any Benchmark Replacement will be similar to three-month U.S. dollar LIBOR, or that any Benchmark Replacement will produce the economic equivalent of three-month U.S. dollar LIBOR.

The Benchmark Replacement is uncertain and may not be a suitable replacement for three-month U.S. dollar LIBOR.

The Notes provide for a “waterfall” of alternative rates to be used to determine the Floating Interest Rate upon the occurrence of a Benchmark Transition Event and its related Benchmark Replacement Date. The rate designated in the first instance as a fallback is Term SOFR (as defined below), a forward-looking rate which will be based on SOFR (as defined below). However, Term SOFR does not exist as of the date of this prospectus supplement, and although Term SOFR is currently being developed under the sponsorship of the Federal Reserve Bank of New York (the “FRBNY”), there is no guarantee that development of Term SOFR will be completed and Term SOFR will exist prior to a Benchmark Transition Event and its related Benchmark Replacement Date. Even if Term SOFR is developed, it is unclear whether it will be a suitable replacement or successor for three-month U.S. dollar LIBOR.

Assuming Term SOFR does not exist at the time of a Benchmark Transition Event and its related Benchmark Replacement Date, the second alternative rate in the waterfall is Compounded SOFR (as defined below). Compounded SOFR is the compounded average of daily SOFRs that we expect will be calculated in arrears while three-month U.S. dollar LIBOR is a forward-looking rate that is published with different maturities. However, there currently is no market convention with respect to the calculation of Compounded SOFR. Uncertainty surrounding the establishment of market conventions related to the calculation of Term SOFR and Compounded SOFR and whether either alternative reference rate is a suitable replacement or successor for three-month U.S. dollar LIBOR may adversely affect the return on, value of and market for the Notes.

The additional alternative rates referenced in the definition of “Benchmark Replacement” set forth under “Description of the Notes—Floating Rate Interest—Effect of Benchmark Transition Event” also are uncertain. In particular, the ISDA Fallback Rate (as defined below), which is the rate referenced in the ISDA Definitions (as defined below) at the time of a Benchmark Transition Event and its related Benchmark Replacement Date, has not been established as of the date hereof. Even after the ISDA Fallback Rate is initially determined, ISDA Definitions and the ISDA Fallback Rate may change over time. If each alternative rate referenced in the definition of “Benchmark Replacement” is unavailable or indeterminable, we or our Designee will determine the Benchmark Replacement that will apply to the Notes. The substitution of a Benchmark Replacement for LIBOR may adversely affect the return on, value of and market for the Notes.

 

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In addition, the benchmark transition provisions provide for a “Benchmark Replacement Adjustment” to be added to the Benchmark Replacement excluding the Benchmark Replacement Adjustment (the “Unadjusted Benchmark Replacement”) to approximate a three-month U.S. dollar LIBOR-equivalent rate. However, such adjustment may only provide an estimate or approximation of three-month U.S. dollar LIBOR. In particular, the Benchmark Replacement Adjustment may be a one-time adjustment, so the spread above the applicable Unadjusted Benchmark Replacement may not respond to changes in unsecured bank credit risk or other market conditions on a periodic basis.

These replacement rates and adjustments may be selected or formulated by (i) the Relevant Governmental Body (as defined below) (such as the Alternative Reference Rates Committee of the FRBNY, which is a group of private-market participants convened by the Federal Reserve Board and the FRBNY to help ensure a successful transition from U.S. dollar LIBOR to SOFR), (ii) the International Swaps and Derivatives Association, Inc., or (iii) in certain circumstances, Mizuho Financial Group or its Designee. In addition, the benchmark transition provisions expressly authorize Mizuho Financial Group or its Designee to make Benchmark Replacement Conforming Changes (as defined below) with respect to, among other things, the timing and frequency of determining rates and making payments of interest. The application of a Benchmark Replacement and Benchmark Replacement Adjustment, and any implementation of Benchmark Replacement Conforming Changes, could result in adverse consequences to the return on, value of and market for the Notes. Further, there is no assurance that the characteristics of any Benchmark Replacement will be similar to the then-current underlying rate that it is replacing, or that any Benchmark Replacement will produce the economic equivalent of the then-current underlying rate that it is replacing.

The Floating Interest Rate may be determined by reference to a Benchmark Replacement even if three-month U.S. dollar LIBOR continues to be published.

If a Benchmark Transition Event and its related Benchmark Replacement Date occur with respect to three-month U.S. dollar LIBOR, the Floating Interest Rate will thereafter be determined by reference to the Benchmark Replacement. A Benchmark Transition Event includes, among other things, a public statement or publication of information by the regulatory supervisor for the administrator of three-month U.S. dollar LIBOR announcing that three-month U.S. dollar LIBOR is no longer representative. The Floating Interest Rate may therefore cease to be determined by reference to three-month U.S. dollar LIBOR, and instead be determined by reference to the Benchmark Replacement, even if three-month U.S. dollar LIBOR continues to be published. Such rate may be lower than three-month U.S. dollar LIBOR for so long as three-month U.S. dollar LIBOR continues to be published, and the return on, value of and market for the Notes may be adversely affected.

We or our Designee will make determinations with respect to the Notes that could affect the return on, value of and market for the Notes.

We or our Designee will make certain determinations with respect to the Notes as further described in this prospectus supplement that may adversely affect the return on, value of and market for the Notes. In particular, if a Benchmark Transition Event and its related Benchmark Replacement Date occur, we or our Designee will determine the Benchmark Replacement and the Benchmark Replacement Adjustment and can make Benchmark Replacement Conforming Changes in connection with the implementation of the applicable Benchmark Replacement as described herein under “Description of the Notes—Floating Rate Interest—Effect of Benchmark Transition Event.” Moreover, certain determinations may require the exercise of discretion and the making of subjective judgments, such as with respect to the Benchmark Replacement or the occurrence or non-occurrence of a Benchmark Transition Event and any Benchmark Replacement Conforming Changes. In addition, notwithstanding anything to the contrary in this prospectus supplement, the accompanying prospectus, the Indenture or the relevant Notes, Mizuho Financial Group may designate as its Designee an entity, which may be Mizuho Financial Group’s affiliate, to make any determination, decision or election that Mizuho Financial Group has the right to make in connection with the benchmark transition provisions set forth in this prospectus supplement. Any determination, decision or election pursuant to the benchmark transition provisions not made by Mizuho Financial Group’s Designee may be made by Mizuho Financial Group.

 

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When performing such functions, potential conflicts of interest may exist between us or our Designee and holders of the Notes. All determinations by us or our Designee in our or its discretion will be conclusive for all purposes and binding on us and holders of the Notes absent manifest error. In making these potentially subjective determinations, we or our Designee may have economic interests that are adverse to your interests, and such determinations may adversely affect the return on, value of and market for the Notes. Because the continuation of three-month U.S. dollar LIBOR on the current basis cannot and will not be guaranteed, and because the Benchmark Replacement is uncertain, we or our Designee is likely to exercise more discretion in respect of calculating the Floating Interest Rate than would be the case in the absence of a Benchmark Transition Event and its related Benchmark Replacement Date.

We or our affiliates may publish research that could affect the market value of the Notes.

We or one or more of our affiliates may, at present or in the future, publish research reports with respect to movements in interest rates generally, or the LIBOR transition or SOFR specifically. This research may be modified from time to time without notice and may express opinions or provide recommendations that are inconsistent with purchasing or holding the Notes. Any of these activities may affect the market value of the Notes.

Additional Considerations Relating to the Secured Overnight Financing Rate

Under the benchmark transition provisions as described below under “Description of the Notes—Floating Rate Interest—Effect of Benchmark Transition Event,” if a Benchmark Transition Event and its related Benchmark Replacement Date occur with respect to three-month U.S. dollar LIBOR and we or our Designee cannot determine the Interpolated Benchmark (as defined below) with respect to three-month U.S. dollar LIBOR, then the Floating Interest Rate will be determined based on SOFR unless a Benchmark Transition Event and its related Benchmark Replacement Date also occur with respect to the Benchmark Replacements based on SOFR, in which case the Floating Interest Rate will be based on the next-available Benchmark Replacement. In the following discussion of SOFR, references to the Notes mean the Notes at any time when the Floating Interest Rate is or will be determined based on SOFR.

The composition and characteristics of SOFR are not the same as those of three-month U.S. dollar LIBOR and SOFR is not expected to be a comparable replacement for three-month U.S. dollar LIBOR.

In June 2017, the FRBNY’s Alternative Reference Rates Committee announced SOFR as its recommended alternative to U.S. dollar LIBOR. However, the composition and characteristics of SOFR are not the same as those of three-month U.S. dollar LIBOR. SOFR is a broad Treasury repurchase agreement (“repo”) financing rate that represents overnight secured funding transactions and is not the economic equivalent of, and fundamentally different from, three-month U.S. dollar LIBOR for the following two key reasons. Firstly, while SOFR is a secured rate, three-month U.S. dollar LIBOR is an unsecured rate. Secondly, while SOFR is currently only an overnight rate, three-month U.S. dollar LIBOR is a forward-looking rate that represents interbank funding for three months.

As a result, there can be no assurance that SOFR will perform in the same way as three-month U.S. dollar LIBOR would have at any time, including, without limitation, as a result of changes in interest and yield rates in the market, bank credit risk, market volatility or global or regional economic, financial, political, regulatory, judicial or other events. For the same reasons, SOFR is not expected to be a comparable replacement for three-month U.S. dollar LIBOR.

SOFR has a very limited history, and the future performance of SOFR cannot be predicted based on historical performance.

The publication of SOFR began in April 2018, and, therefore, it has a very limited history. In addition, the future performance of SOFR cannot be predicted based on the limited historical performance. Levels of SOFR

 

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following the occurrence of a Benchmark Transition Event and its related Benchmark Replacement Date may bear little or no relation to the historical actual or historical indicative data. Prior observed patterns, if any, in the behavior of market variables and their relation to SOFR, such as correlations, may change in the future. While some pre-publication historical data has been released by the FRBNY, such analysis inherently involves assumptions, estimates and approximations. The future performance of SOFR is impossible to predict and therefore no future performance of SOFR may be inferred from any of the historical actual or historical indicative data. Hypothetical or historical performance data are not indicative of, and have no bearing on, the potential performance of SOFR. You should not rely on any historical changes or trends in SOFR as an indicator of the future performance of SOFR.

SOFR may be more volatile than other benchmark or market rates.

Since the initial publication of SOFR, daily changes in the rate have, on occasion, been more volatile than daily changes in other benchmark or market rates, such as three-month U.S. dollar LIBOR, during corresponding periods, and SOFR may bear little or no relation to the historical actual or historical indicative data. In addition, although changes in Term SOFR and Compounded SOFR generally are not expected to be as volatile as changes in daily levels of SOFR, the return on and value of the Notes may fluctuate more than floating rate securities that are linked to less volatile rates.

Any failure of SOFR to gain market acceptance could adversely affect the Notes.

SOFR was developed for use in certain U.S. dollar derivatives and other financial contracts as an alternative to U.S. dollar LIBOR in part because it is considered a good representation of general funding conditions in the overnight U.S. Treasury repo market. However, as a rate based on transactions secured by U.S. Treasury securities, it does not measure bank-specific credit risk and, as a result, is less likely to correlate with the unsecured short-term funding costs of banks. This may mean that market participants would not consider SOFR a suitable replacement or successor for all of the purposes for which U.S. dollar LIBOR historically has been used (including, without limitation, as a representation of the unsecured short-term funding costs of banks), which may, in turn, lessen market acceptance of SOFR. Any failure of SOFR to gain market acceptance could adversely affect the return on and value of the Notes and the price at which investors can sell the Notes in the secondary market.

The secondary trading market for securities linked to SOFR may be limited.

Since SOFR is a relatively new market index, SOFR-linked securities likely will have no established trading market when issued, and an established trading market may never develop or may not be very liquid. If SOFR does not prove to be widely used as a benchmark in securities that are similar or comparable to the Notes, the trading price of the Notes may be lower than those of securities that are linked to rates that are more widely used. Similarly, market terms for securities that are linked to SOFR, including, but not limited to, the spread over the reference rate reflected in the benchmark transition provisions or manner of compounding the reference rate (if applicable), may evolve over time, and as a result, trading prices of the Notes may be lower than those of later-issued securities that are based on SOFR. Investors in the Notes may not be able to sell the Notes at all or may not be able to sell the Notes at prices that will provide them with a yield comparable to similar investments that have a developed secondary market, and may consequently suffer from increased pricing volatility and market risk.

SOFR may be modified or discontinued.

Because SOFR is published by FRBNY based on data received from other sources, we have no control over its determination, calculation or publication. SOFR is a relatively new rate, and the FRBNY (or a successor), as administrator of SOFR, may make methodological or other changes that could change the value of SOFR, including changes related to the method by which SOFR is calculated, eligibility criteria applicable to the

 

S-19

transactions used to calculate SOFR, or timing related to the publication of SOFR. If the manner in which SOFR is calculated is changed, that change may adversely affect the Floating Interest Rate, which may adversely affect the trading prices of the Notes. The administrator may withdraw, modify, amend, suspend or discontinue the calculation or dissemination of SOFR in its sole discretion and without notice and has no obligation to consider the interests of holders of Notes in calculating, withdrawing, modifying, amending, suspending or discontinuing SOFR.

 

S-20

USE OF PROCEEDS

We estimate that we will receive net proceeds from the issuance and sale of the Notes (after deducting underwriting discounts and estimated offering expenses payable by us) of approximately $                million which we intend to use to make loans that are intended to qualify as Internal TLAC under the Japanese TLAC Standard to Mizuho Bank. Mizuho Bank will utilize such funds for its general corporate purposes.

 

S-21

CAPITALIZATION AND INDEBTEDNESS

The following table sets forth our consolidated capitalization and indebtedness as of March 31, 2020 presented in accordance with U.S. GAAP, as adjusted to give effect to the offering of the Notes. You should read this table in conjunction with the consolidated financial statements and related notes incorporated by reference in this prospectus supplement.

 

		As of March 31, 2020(4)
		Actual				As adjusted
		(in millions of yen)
Indebtedness:
Short-term borrowings		¥	26,821,598			¥	26,821,598
Long-term debt(1)(2)(3)			10,346,152
Total indebtedness		¥	37,167,750			¥
Equity:
MHFG shareholders’ equity:
Common stock(5)—no par value, 48,000,000,000 shares authorized, 25,392,498,945 shares issued			5,827,500				5,827,500
Retained earnings			2,700,774				2,700,774
Accumulated other comprehensive income, net of tax			(9,494	)			(9,494	)
Less: Treasury stock, at cost—Common stock 32,106,811 shares			(6,415	)			(6,415	)
Total MHFG shareholders’ equity			8,512,365				8,512,365
Noncontrolling interests			663,259				663,259
Total equity		¥	9,175,624			¥	9,175,624
Total capitalization and indebtedness		¥	46,343,374			¥

 

Notes:

(1)

We regularly issue senior and subordinated notes. We issued an aggregate of ¥80 billion of yen denominated unsecured dated subordinated notes in June 2020. We also issued an aggregate of U.S. $2.5 billion of U.S. dollars denominated senior notes and an aggregate of ¥207 billion of yen denominated unsecured perpetual subordinated notes in July 2020.

(2)	We redeemed ¥10 billion of yen denominated unsecured dated subordinated notes in June 2020.

(3)	Mizuho Bank redeemed ¥20 billion of yen denominated senior notes in July 2020 and ¥10 billion of yen denominated unsecured dated subordinated notes in August 2020.

(4)	The following foreign currency exchange rate is used in the table above: ¥107.53 = U.S. $1.00.

(5)

At the Ordinary General Meeting of Shareholders held on June 25, 2020, our shareholders approved a share consolidation in respect of our common stock on the basis of one post-consolidation share per ten pre-consolidation shares and a partial amendment to the articles of incorporation to decrease the number of shares of common stock authorized to be issued to 4,800,000,000, and such share consolidation and the decrease of the number of shares of common stock authorized to be issued shall become effective on October 1, 2020.

Except as stated above, there has been no material change in our capitalization and indebtedness since March 31, 2020.

 

S-22

SELECTED FINANCIAL AND OTHER INFORMATION (U.S. GAAP)

The following tables set forth our selected consolidated financial data under U.S. GAAP as of and for the fiscal years ended March 31, 2016, 2017, 2018, 2019 and 2020, which have been derived from our audited consolidated financial statements as of and for the same periods.

The consolidated financial statements of Mizuho Financial Group included in our annual report on Form 20-F for the fiscal year ended March 31, 2020 and incorporated herein by reference have been audited in accordance with the standards of the Public Company Accounting Oversight Board (United States) by Ernst & Young ShinNihon LLC, our independent registered public accounting firm.

You should read the U.S. GAAP selected consolidated financial information presented below together with the information included in “Item 5. Operating and Financial Review and Prospects” and the audited consolidated financial statements, including the notes thereto, in our annual report on Form 20-F for the fiscal year ended March 31, 2020, which is incorporated herein by reference. The information presented below is qualified in its entirety by reference to that information.

 

		As of and for the fiscal years ended March 31,
		2016				2017				2018				2019				2020
		(in millions of yen, except per share data, share number information and percentages)
Statement of Income data:
Interest and dividend income		¥	1,500,171			¥	1,509,030			¥	1,761,886			¥	2,207,443			¥	2,151,172
Interest expense			495,407				601,712				889,936				1,313,476				1,271,381
Net interest income			1,004,764				907,318				871,950				893,967				879,791
Provision (credit) for loan losses			34,560				37,668				(126,362	)			32,459				156,200
Net interest income after provision (credit) for loan losses			970,204				869,650				998,312				861,508				723,591
Noninterest income			1,883,894				1,368,032				1,604,663				1,222,371				1,307,740
Noninterest expenses			1,657,493				1,757,307				1,763,677				1,998,819				1,877,841
Income before income tax expense			1,196,605				480,375				839,298				85,060				153,490
Income tax expense			346,542				91,244				237,604				9,335				47,175
Net income			850,063				389,131				601,694				75,725				106,315
Less: Net income (loss) attributable to noncontrolling interests			(429	)			26,691				24,086				(8,746	)			(43,880	)
Net income attributable to MHFG shareholders		¥	850,492			¥	362,440			¥	577,608			¥	84,471			¥	150,195
Net income attributable to common shareholders		¥	848,062			¥	362,440			¥	577,608			¥	84,471			¥	150,195
Amounts per share:
Basic earnings per common share—net income attributable to common shareholders		¥	34.19			¥	14.33			¥	22.77			¥	3.33			¥	5.92
Diluted earnings per common share—net income attributable to common shareholders		¥	33.50			¥	14.28			¥	22.76			¥	3.33			¥	5.92
Number of shares used to calculate basic earnings per common share (in thousands)			24,806,161				25,285,899				25,366,345				25,362,376				25,373,681
Number of shares used to calculate diluted earnings per common share (in thousands)			25,387,033				25,380,302				25,373,931				25,366,898				25,375,264
Cash dividends per share(1)(2):
Common stock		¥	7.50			¥	7.50			¥	7.50			¥	7.50			¥	7.50
		$	0.07			$	0.07			$	0.07			$	0.07			$	0.07
Eleventh series class XI preferred stock(3)		¥	20.00			¥	—			¥	—			¥	—			¥	—
		$	0.18			$	—			$	—			$	—			$	—

 

S-23

		As of and for the fiscal years ended March 31,
		2016				2017				2018				2019				2020
		(in millions of yen, except per share data, share number information and percentages)
Balance sheet data:
Total assets		¥	193,810,151	(4)		¥	200,456,304			¥	204,255,642			¥	197,611,195			¥	211,218,760
Loans, net of allowance			77,104,122				81,804,233				83,204,742				82,492,742				87,087,233
Total liabilities			185,626,960	(4)			191,684,247				194,751,942				188,109,702				202,043,136
Deposits			117,937,722				131,184,953				136,884,006				138,296,916				144,948,667
Long-term debt			14,765,527	(4)			14,529,414				12,955,230				11,529,400				10,346,152
Common stock			5,703,144				5,826,149				5,826,383				5,829,657				5,827,500
Total MHFG shareholders’ equity			8,014,551				8,261,357				8,868,421				8,726,519				8,512,365
Other financial data:
Return on equity and assets:
Net income attributable to common shareholders as a percentage of total average assets			0.43	%			0.18	%			0.28	%			0.04	%			0.07	%
Net income attributable to common shareholders as a percentage of average MHFG shareholders’ equity			13.33	%			5.25	%			8.26	%			1.11	%			1.90	%
Dividends per common share as a percentage of basic earnings per common share			21.94	%			52.34	%			32.94	%			225.23	%			126.69	%
Average MHFG shareholders’ equity as a percentage of total average assets			3.23	%			3.38	%			3.35	%			3.71	%			3.91	%
Net interest income as a percentage of total average interest-earning assets			0.58	%			0.51	%			0.47	%			0.48	%			0.48	%

 

Notes:

(1)

Yen amounts are expressed in U.S. dollars at the rate of ¥112.42 = U.S. $1.00, ¥111.41 = U.S. $1.00, ¥106.20 = U.S. $1.00, ¥110.68 = U.S. $1.00 and ¥107.53 = U.S. $1.00 for the fiscal years ended March 31, 2016, 2017, 2018, 2019 and 2020, respectively. These rates are the noon buying rates on the respective fiscal year-end dates in New York City for cable transfers in yen as certified for customs purposes by the FRBNY.

(2)

Figures represent cash dividends per share with respect to the applicable fiscal year. Dividends with respect to a fiscal year include year-end dividends and interim dividends. Declaration and payment of dividends are conducted during the immediately following fiscal year, in the case of year-end dividends, or immediately following interim period, in the case of interim dividends.

(3)

On July 1, 2016, we acquired ¥75.1 billion of eleventh series class XI preferred stock, in respect of which a request for acquisition was not made by June 30, 2016, and delivered shares of our common stock, pursuant to Article 20, Paragraph 1 of our articles of incorporation and a provision in the terms and conditions of the preferred stock concerning mandatory acquisition in exchange for common stock. On July 13, 2016, we cancelled all of our treasury shares of eleventh series class XI preferred stock.

(4)	Total assets, total liabilities and long-term debt have been recalculated to reflect the retrospective adoption of ASU No.2015-03.

 

S-24

SUPPLEMENTAL FINANCIAL AND OTHER INFORMATION (JAPANESE GAAP)

The tables below set forth our selected historical consolidated and other financial data under Japanese GAAP, as of and for the fiscal years ended March 31, 2016, 2017, 2018, 2019 and 2020 and as of and for the three months ended June 30, 2019 and 2020.

The selected consolidated financial information as of and for the fiscal years ended March 31, 2016, 2017, 2018, 2019 and 2020 have been derived from our audited consolidated financial statements under Japanese GAAP which have been audited by Ernst & Young ShinNihon LLC, our independent auditors and which are not included in or incorporated by reference into this prospectus supplement. The selected consolidated financial information as of and for the three months ended June 30, 2019 and 2020 is derived from our unaudited consolidated financial statements under Japanese GAAP, English-language translations of which are incorporated by reference into this prospectus supplement from our current report on Form 6-K dated August 14, 2020.

Some statistical information is primarily reported by Japanese banks on a non-consolidated basis and is presented as such in this prospectus supplement. Selected aggregated non-consolidated figures for the principal banking subsidiaries of the Mizuho Group are also provided for reference purposes.

Our results of operations as of and for the three months ended June 30, 2020 are not necessarily indicative of our results of operations for the fiscal year ending March 31, 2021 or any future period.

Japanese GAAP differs in certain respects from U.S. GAAP. For a description of certain differences between U.S. GAAP and Japanese GAAP, see “Item 5. Operating and Financial Review and Prospects—Reconciliation with Japanese GAAP” in our most recent annual report on Form 20-F filed with the SEC, which is incorporated by reference herein.

Selected Consolidated Financial Data for Mizuho Group

The table below sets forth selected historical consolidated financial data, as of and for the fiscal years ended March 31, 2016, 2017, 2018, 2019 and 2020 and as of and for the three months ended June 30, 2019 and 2020.

 

		As of and for the fiscal years ended March 31,																				As of and for the three months ended June 30,
		2016				2017				2018				2019				2020				2019				2020
		(in millions of yen, except percentages or where otherwise noted)
																						(unaudited)
Statement of Income data:
Interest income		¥	1,426,256			¥	1,445,555			¥	1,622,354			¥	2,056,327			¥	2,014,440			¥	528,821			¥	366,276
Interest expense			422,574				577,737				814,988				1,293,846				1,280,897				348,850				151,175
Net interest income			1,003,682				867,818				807,366				762,480				733,542				179,971				215,101
Fiduciary income			53,458				50,627				55,400				55,153				58,565				14,017				13,333
Net fee and commission income			607,551				603,542				614,349				610,427				619,243				134,474				156,803
Net trading income			310,507				325,332				275,786				297,367				391,299				90,227				137,808
Net other operating income			246,415				245,419				162,454				87,306				259,567				103,045				46,511
General and administrative expenses			1,349,593				1,467,221				1,488,973				1,430,850				1,378,398				328,430				340,468
Other income			365,036				438,042				565,683				447,300				318,438				57,177				35,560
Other expenses			228,807				279,368				192,113				712,927				383,542				33,107				88,559
Income before income taxes(1)			1,008,252				784,193				799,953				116,259				618,717				217,375				176,092
Income taxes:
Current(2)			213,289				196,535				190,158				161,376				150,088				54,908				48,588
Deferred			69,260				(58,800	)			1,469				(163,879	)			11,408				(3,635	)			4,955
Profit(1)			725,702				646,457				608,326				118,762				457,221				166,102				122,547
Profit attributable to non-controlling interests(1)			54,759				42,913				31,778				22,196				8,652				3,663				172
Profit attributable to owners of parent(1)		¥	670,943			¥	603,544			¥	576,547			¥	96,566			¥	448,568			¥	162,438			¥	122,375
Gross profits (excluding the amounts of credit costs of trust accounts)		¥	2,221,615			¥	2,092,740			¥	1,915,357			¥	1,812,737			¥	2,062,219			¥	521,736			¥	569,558
Gross profits (excluding the amounts of credit costs of trust accounts) + net gains (losses) related to ETFs and others(3)(4)			—				2,129.0				1,995.5				1,827.7				2,072.8				525.2				558.0

 

S-25

		As of and for the fiscal years ended March 31,																				As of and for the three months ended June 30,
		2016				2017				2018				2019				2020				2019				2020
		(in millions of yen, except percentages or where otherwise noted)
																						(unaudited)
Net business profits (excluding the amounts of credit costs of trust accounts, before reversal of (provision for) general reserve for losses on loans)(5)			852,854				663,416				457,820				393,389				661,982				188,273				231,721
Net business profits (excluding the amounts of credit costs of trust accounts, before reversal of (provision for) general reserve for losses on loans)(5) + net gains (losses) related to ETFs and others(3)(4)			—				699.7				538.0				408.3				672.5				191.8				220.2
Ordinary profits			997,529				737,512				782,447				614,118				637,877				219,849				175,421
Credit-related costs(6)(7)			30,447				47,539				(156,313	)			19,553				171,703				(1,621	)			(39,000	)
Balance sheet data:
Total assets		¥	193,458,580			¥	200,508,610			¥	205,028,300			¥	200,792,226			¥	214,659,077			¥	202,767,108			¥	220,609,837
Loans and bills discounted(8)			73,708,884				78,337,793				79,421,473				78,456,935				83,468,185				79,049,661				88,824,317
Securities			39,505,971				32,353,158				34,183,033				29,774,489				34,907,234				29,533,185				39,354,461
Deposits(9)			117,456,604				130,676,494				136,463,824				137,649,596				144,472,235				135,130,108				150,256,723
Net assets			9,353,244				9,273,361				9,821,246				9,194,038				8,663,847				8,881,782				8,727,255
Basel III related data:(10)
Common Equity Tier 1 capital		¥	6,566,488			¥	7,001,664			¥	7,437,048			¥	7,390,058			¥	7,244,776			¥	7,413,983			¥	7,407,199
Additional Tier 1 capital			1,338,605				1,209,858				1,755,195				1,842,102				1,779,627				1,542,751				1,780,058
Tier 1 capital			7,905,093				8,211,522				9,192,244				9,232,160				9,024,404				8,956,734				9,187,258
Total capital			9,638,641				10,050,953				10,860,440				10,917,507				10,722,278				10,714,473				10,914,882
Risk-weighted assets			62,531,174				61,717,158				59,528,983				57,899,567				62,141,217				59,928,686				65,180,377
Common Equity Tier 1 capital ratio(11)			10.50	%			11.34	%			12.49	%			12.76	%			11.65	%			12.37	%			11.36	%
Tier 1 capital ratio			12.64	%			13.30	%			15.44	%			15.94	%			14.52	%			14.94	%			14.09	%
Total capital ratio			15.41	%			16.28	%			18.24	%			18.85	%			17.25	%			17.87	%			16.74	%
Total exposures(12)			198,482,158				207,401,679				214,277,824				208,557,401				220,977,568				208,837,962				197,278,551
Leverage ratio(13)			3.98	%			3.95	%			4.28	%			4.42	%			4.08	%			4.28	%			4.65	%
External TLAC ratio (risk-weighted assets basis, excluding capital buffers(14))			—				—				20.40	%			22.18	%			21.95	%			21.10	%			20.83	%
External TLAC ratio (total exposure basis, including capital buffers(15))			—				—				—				7.14	%			7.16	%			7.07	%			8.04	%
Outstanding balance of TLAC eligible senior bonds (in trillions of yen)(16)			—			¥	1.25			¥	1.92			¥	2.53			¥	3.50				—				—
Asset quality:
Credit-related cost ratio(17)			3bps				5bps				(17)bps				2bps				18bps				—				3bps
Non-performing loans (“NPL”) balances and ratios:
Status of disclosed claims under the Financial Reconstruction Act (“FRA”)(18):
Claims against bankrupt and substantially bankrupt obligors(4)		¥	83			¥	98			¥	87			¥	59			¥	59			¥	56			¥	77
Claims with collection risk(4)			364				404				294				361				383				406				382
Claims for special attention(4)			464				422				241				195				257				214				315
Total disclosed claims under the FRA(4)			911				925				623				617				700				676				775
Normal claims(4)			80,290				85,906				88,021				87,178				92,670				—				97,652
Total claims(4)		¥	81,201			¥	86,831			¥	88,645			¥	87,795			¥	93,370			¥	—			¥	98,428
NPL ratio(19)			1.12	%			1.06	%			0.70	%			0.70	%			0.75	%			—	%			0.78	%
Other data:
Other securities(20)		¥	32,793,827			¥	26,661,507			¥	29,626,911			¥	26,157,679			¥	32,166,482			¥	26,272,001			¥	36,474,975
Japanese stocks			1,847,182				1,687,587				1,564,867				1,419,898				1,272,069				1,404,501				1,269,810
Japanese bonds			18,737,977				13,223,974				16,530,192				14,781,679				15,756,613				14,458,201				19,302,924
Other			12,208,667				11,749,944				11,531,850				9,956,100				15,137,799				10,409,298				15,902,240
Foreign bonds			9,678,529				9,099,741				8,495,236				7,394,627				12,501,259				7,529,244				12,890,579
Unrealized gains (losses) related to other securities			1,881,867				1,819,224				1,954,226				1,689,866				1,171,146				1,543,513				1,362,405
Net unrealized gains (losses) on other securities (the base amount to be recorded directly to Net Assets after tax and other necessary adjustments)			1,855,152				1,784,852				1,925,952				1,651,865				1,176,337				1,513,384				1,363,667
Japanese stocks			1,603,909				1,838,708				1,984,272				1,687,650				1,071,551				1,515,594				1,275,676
Japanese bonds			136,507				21,181				5,411				5,270				(54,100	)			7,930				(63,520	)
Japanese government bonds			95,841				8,716				616				5,921				(44,021	)			5,636				(54,202	)
Other			114,735				(75,037	)			(63,731	)			(41,055	)			158,886				(10,140	)			151,512
Foreign bonds			20,889				(162,927	)			(161,269	)			21,704				200,954				32,065				180,340
Net gains (losses) related to bonds			143,593				97,817				(20,773	)			(109,359	)			114,242				63,302				40,997
Net gains (losses) related to stocks(21)			205,678				242,145				272,035				274,863				137,174				28,214				(12,969	)

 

Notes:

(1)

We have applied “Revised Accounting Standard for Business Combinations” (ASBJ Statement No.21, September 13, 2013) and others and presentation of Net Income and others has been changed and presentation of Minority Interests has been changed to Non-controlling Interests from the fiscal year ended March 31, 2016.

(2)	Includes refund of income taxes.

(3)

Net gains related to ETFs (the aggregate non-consolidated figures of Mizuho Bank and Mizuho Trust & Banking) + net gains on operating investment securities (the consolidated figures of Mizuho Securities) was ¥10.6 billion for the fiscal year ended March 31, 2020 (a decrease of ¥4.3 billion from the previous fiscal year) and ¥(11.4) billion for the three months ended June 30, 2020 (a decrease of ¥15.0 billion from the same period in the previous year). Net business profits (excluding the amounts of credit costs of trust accounts, before

 

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reversal of (provision for) general reserve for losses on loans) + net gains (losses) related to ETFs and others was ¥475.5 billion for the nine months ended December 31, 2019 and ¥197.0 billion for the three months ended March 31, 2020.

(4)	In billions of yen.

(5)

Net business profits (excluding the amounts of credit costs of trust accounts, before reversal of (provision for) general reserve for losses on loans) = consolidated gross profits-general and administrative expenses (excluding non-recurring losses) + equity in income from investments in affiliates and certain other consolidation adjustments. Net business profits (excluding the amounts of credit costs of trust accounts, before reversal of (provision for) general reserve for losses on loans) was ¥470.2 billion for the nine months ended December 31, 2019 and ¥191.7 billion for the three months ended March 31, 2020.

(6)	Figures in parentheses show negative credit-related costs as a result of gain on reversal of reserves for possible losses on loans.

(7)

Credit-related costs consist of (a) expenses related to portfolio problems (including reversal of (provision for) general reserve for losses on loans), (b) gains on reversal of reserves for possible losses on loans, and others, and (c) credit costs for trust accounts. Regions are on a representative main branch basis, and Japan includes items which cannot be divided by regions such as adjustments of foreign exchange and others. Credit-related costs incurred at Retail & Business Banking Company, Corporate & Institutional Company and Global Corporate Company for the three months ended June 30, 2020 were ¥13.2 billion, ¥13.7 billion and ¥12.9 billion, respectively.

(8)	Bills discounted refer to a form of financing in Japan under which promissory notes obtained by corporations through their regular business activities are purchased by banks prior to their payment dates at a discount based on prevailing interest rates.

(9)	Includes negotiable certificates of deposit.

(10)

Risk-adjusted capital data are calculated on a Basel III basis from the fiscal year ended March 31, 2013. We adopted the advanced internal ratings-based approach for the calculation of risk-weighted assets associated with credit risk from the fiscal year ended March 31, 2009. We also adopted the advanced measurement approach for the calculation of operational risk from the fiscal year ended March 31, 2010. For more details on capital adequacy requirements set by the Bank for International Settlements, and the guideline implemented by the FSA in compliance thereto, see “Item 5. Operating and Financial Review and Prospects—Capital Adequacy” in our annual report on Form 20-F for the fiscal year ended March 31, 2020, which is incorporated by reference herein.

(11)	Common Equity Tier 1 capital ratio was 11.92% as of December 31, 2019.

(12)	Total exposures (excluding the impact of any applicable temporary exemption of deposits with the Bank of Japan) was ¥229,877,279 million as of June 30, 2020.

(13)	Leverage ratio (excluding the impact of any applicable temporary exemption of deposits with the Bank of Japan) was 3.99% as of June 30, 2020.

(14)

Calculated after deduction of capital buffer requirement. The balance of external TLAC (excluding capital buffers) was ¥13,643.2 billion as of March 31, 2020. The ratio as of March 31, 2018 was calculated on a trial basis under the TLAC regulations then anticipated to be applicable in Japan as of March 31, 2019.

(15)	Calculated before deduction of capital buffer requirement. The balance of external TLAC (including capital buffers) was ¥15,824.3 billion as of March 31, 2020.

(16)	Japanese yen equivalent value converted at the exchange rate as of the respective period end.

(17)	Credit-related cost ratio = credit-related costs (annualized) / total claims (period-end balance, based on the FRA; banking account and trust account).

(18)	Includes banking account and trust account. Trust account denotes trust accounts with contracts that indemnify the principal amounts.

(19)	NPL ratio = disclosed claims under the FRA / total claims. Includes banking account and trust account.

(20)	Other securities which have readily determinable fair values. Figures are on an acquisition cost basis.

(21)

Net gains (losses) related to stocks-net gains (losses) related to ETFs and others was ¥126.5 billion for the fiscal year ended March 31, 2020, consisting of ¥92.1 billion for the nine months ended December 31, 2019 and ¥34.4 billion for the three months ended March 31, 2020, and ¥1.5 billion for the three months ended June 30, 2020.

 

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Selected Aggregated Figures of Mizuho Group’s Principal Banking Subsidiaries

The tables below set forth selected aggregated non-consolidated figures of Mizuho Group’s principal banking subsidiaries, Mizuho Bank and Mizuho Trust & Banking, as of and for the fiscal years ended March 31, 2016, 2017, 2018, 2019 and 2020 and as of and for the three months ended June 30, 2019 and 2020.

 

		As of and for the fiscal years ended March 31,																				As of and for the three months ended June 30,
Aggregated figures of Mizuho Group’s principal banking subsidiaries(1)		2016				2017				2018				2019				2020				2019				2020
		(in billions of yen, except percentages or where otherwise noted)
																						(unaudited)
Financial results highlights:
Gross profits (excluding the amounts of credit costs of trust accounts)		¥	1,599			¥	1,441			¥	1,293			¥	1,197			¥	1,437			¥	384			¥	392
Net interest income			865				749				708				676				652				162				191
Net fee and commission income			414				407				405				417				420				93				106
General and administrative expenses (excluding non-recurring losses)			910				947				964				949				922				221				223
Net business profits (before reversal of (provision for) general reserve for losses on loans)(2)			688				494				328				247				515				163				169
Net income (losses)			530				388				493				(105	)			343				138				33
Asset quality:
Reserve ratios for other watch obligors(3): Claims against other watch obligors (approximate amount, in trillions of yen)		¥	1.6			¥	1.6			¥	1.6			¥	1.3			¥	1.6				n.a.				n.a.
Reserve ratios			3.66	%			6.69	%			3.92	%			2.46	%			4.91	%			n.a.				n.a.
Other financial data:
Japanese government bonds (in trillions of yen)(4)		¥	15.6			¥	10.2			¥	13.3			¥	11.8			¥	12.6			¥	11.5			¥	16.0
Average remaining period (years)(5)(6)			2.5				2.4				2.5				2.1				2.4				2.0				2.1
Unrealized gains (losses)(7)		¥	95.8			¥	8.7			¥	0.6			¥	5.9			¥	(44.0	)		¥	5.6			¥	(54.2	)
Foreign bonds (in trillions of yen)(4)			9.4				8.7				8.1				7.1				12.1				7.3				12.5
Average remaining period (years)(6)			3.9				3.9				3.4				3.2				2.6				n.a.				2.5
Unrealized gains (losses)(7)		¥	18.1			¥	(162.9	)		¥	(160.2	)		¥	21.1			¥	199.6			¥	31.1			¥	178.0

 

Notes:

(1)	The aggregated figures in this table have not been audited.

(2)	Net business profits (before reversal of (provision for) general reserve for losses on loans) of Mizuho Trust & Banking exclude the amounts of credit-related costs for trust accounts.

(3)	Banking account.

(4)	Classified as other securities which have readily determinable fair values. Figures are on an acquisition cost basis.

(5)	Excludes floating-rate notes.

(6)	On a managerial accounting basis.

(7)	Amounts to be recorded directly to net assets after tax and other necessary adjustments. Excludes investments in partnerships.

 

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Other Related Information for Mizuho Group

 

		For the six months ended																								For the three months ended June 30, 2020
Aggregated figures of Mizuho Group’s principal banking subsidiaries		September 30, 2017				March 31, 2018				September 30, 2018				March 31, 2019				September 30, 2019				March 31, 2020
		(in trillions of yen)
Loan balance in Japan(1)
Average balance:
Domestic branches			¥50.9				¥51.1				¥51.7				¥53.3				¥54.5				¥55.0				¥58.7
		For the six months ended																								For the three months ended June 30, 2020
Aggregated figures of Mizuho Group’s principal banking subsidiaries		September 30, 2017				March 31, 2018				September 30, 2018				March 31, 2019				September 30, 2019				March 31, 2020
Loan and deposit rate margin in Japan(2)
Domestic return on loans and bills discounted (a)			0.86	%			0.85	%			0.83	%			0.80	%			0.78	%			0.77	%			0.73	%
Domestic loan and deposit rate margin (a) – (b)			0.86	%			0.84	%			0.82	%			0.80	%			0.78	%			0.76	%			0.73	%
Domestic cost of deposits and debentures (b)			0.00	%			0.00	%			0.00	%			0.00	%			0.00	%			0.00	%			0.00	%
		For the six months ended																								For the three months ended June 30, 2020
Non-Consolidated Financial Information for Mizuho Bank		September 30, 2017				March 31, 2018				September 30, 2018				March 31, 2019				September 30, 2019				March 31, 2020
		(in billions of dollars) (on a managerial accounting basis)
Loan balance outside Japan(3)(4)
Average balance		$	202.5			$	207.4			$	227.6			$	244.0			$	248.5			$	260.0			$	289.6
Asia			94.4				102.4				113.1				120.3				116.1				118.9				123.4
Americas			70.2				68.5				69.4				74.3				77.5				82.1				100.6
EMEA			37.9				36.5				45.1				49.4				54.9				59.0				65.7
		For the six months ended																								For the three months ended June 30, 2020
Non-Consolidated Financial Information for Mizuho Bank		September 30, 2017				March 31, 2018				September 30, 2018				March 31, 2019				September 30, 2019				March 31, 2020
Loan and deposit rate margin outside Japan
Return on loan and bills discounted (a)			2.03	%			2.24	%			2.67	%			2.91	%			2.87	%			2.46	%			1.74	%
Loan and deposit rate margin (a) – (b)			0.95	%			1.03	%			0.98	%			0.89	%			0.90	%			0.91	%			0.69	%
Cost of deposits and debentures (b)			1.08	%			1.21	%			1.68	%			2.01	%			1.97	%			1.55	%			1.04	%
		For the six months ended																								For the three months ended June 30, 2020
Non-Consolidated Financial Information for Mizuho Bank		September 30, 2017				March 31, 2018				September 30, 2018				March 31, 2019				September 30, 2019				March 31, 2020
		(on a managerial accounting basis)
Loan Spreads:
Loans to middle market firms and SMEs in Japan			0.64	%			0.62	%			0.60	%			0.58	%			0.55	%			0.54	%			0.52	%
Loans to large corporate banking clients in Japan			0.48	%			0.48	%			0.48	%			0.47	%			0.49	%			0.49	%			0.49	%
Loans booked at overseas offices(3)(4)			0.89	%			0.90	%			0.84	%			0.80	%			0.81	%			0.82	%			0.86	%

 

		As of March 31,
Non-Consolidated Financial Information for Mizuho Bank		2017				2018				2019				2020
		(in billions of dollars, except percentages) (on a managerial accounting basis)
Non-JPY loan and deposit trends(5):
Period-end balances:
Non-JPY denominated customer deposits(6)		$	175.7			$	177.6			$	200.4			$	228.9
Non-JPY denominated loans(6)			235.9				245.6				272.4				307.8
Proportion of deposit to loan			74	%			72	%			74	%			74	%

 

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		As of March 31,
Non-Consolidated Financial Information for Mizuho Bank		2018				2019				2020
		(on Global Corporate Company managerial accounting basis)
Quality of loan portfolio outside Japan(7):
Percentage of loans to investment grade borrowers(8)			76	%			77	%			77%
NPL ratio(9)			0.6	%			0.6	%			0.5%

Aggregated period-end loan balance of Mizuho Bank, including the banking subsidiaries outside Japan, as of March 31, 2020:

 

Breakdown of overseas loan portfolio by customer type
Total		Japanese Customers		Non-Japanese Customers
(in billions of dollars, except percentages) (on Global Corporate Company managerial accounting basis)
$278.8		33%		67%

 

Breakdown of overseas loan portfolio by region
Total		Asia/Oceania		Americas		EMEA
(in billions of dollars, except percentages) (on Global Corporate Company managerial accounting basis)
$278.8		42%		36%		22%

 

Breakdown of Asia/Oceania loan portfolio
Total		Hong Kong				Singapore				Australia				Thailand				China				South Korea				Taiwan				India				Malaysia				Others
(in billions of dollars, except percentages) (on Global Corporate Company managerial accounting basis)
$117.0			24	%			17	%			11	%			9	%			9	%			7	%			7	%			6	%			3	%			7	%

 

Breakdown of China loan portfolio
Total		Japanese Customers		Non-Japanese Customers
(in billions of dollars, except percentages) (on Global Corporate Company managerial accounting basis)
$10.0		44%		56%(10)

 

		For the three months ended June 30,
Non-interest Income from Customer Groups		2018				2019				2020
		(in billions of yen) (on a managerial accounting basis)
Non-interest Income (group aggregated figures)(11)(12)		¥	222			¥	217			¥	237
Retail & Business Banking Company			88				78				74
Individual Asset Formation(13)			—				27				31
Solution Businesses(14)			—				15				12
Settlement & FX			—				23				21
Derivatives, etc.			—				13				10
Corporate & Institutional Company			56				64				76
Solution Businesses(14)			—				37				47
Settlement & FX			—				18				17
Derivatives, etc.			—				9				12
Global Corporate Company			49				52				67
EMEA			—				8				12
Americas			—				23				33
Asia			—				21				22
Asset Management Company			13				13				12
Others			16				10				8

 

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