Morgan Stanley has been forced to renegotiate the terms of a planned $9bn cash injection from Japan's Mitsubishi UFG, following the steep fall in the price of its shares since the deal was announced last month.

The Japanese bank still plans to invest $9bn and take a 21 per cent share of Morgan Stanley, but under a changed formula that will see the entire investment in the form of convertible preferred shares at a significantly lower price than previously agreed.