On Sep 16, Morgan Stanley (MS) sold 10-year senior notes worth $3 billion that are expected to yield a (yield to maturity) YTM of 5.68% and about 225 bps over the U.S. Treasuries. Morgan Stanley was the sole lead manager for the sale. The notes were issued at a discount at $99.581. They are non-callable and carry a coupon rate of 5.625% and will mature on Sep 23, 2019.
The notes will pay coupons semi-annually with the first payment expected on Mar 23, 2010. The company will use the proceeds of the debentures for general corporate purposes. Both Standard &Poor’s Ratings Services (S&P) and Fitch Ratings have assigned ‘A’ rating to the notes while Moody’s has assigned ‘A2’ rating.
Morgan Stanley is a global financial services firm that maintains significant market positions in each of its business segments: Institutional Securities, Global Wealth Management Group, and Asset Management. Clients and customers include corporations, governments, financial institutions, and individuals.
Morgan Stanley reported a loss of $1.26 billion, or $1.10 per share after paying preferred dividends for the quarter ended Jun 30, 2009, compared to an income of $1.06 billion or $1.02 per share, in the prior-year quarter. The loss was mainly attributable to special charges incurred to cover losses in real estate investments and costs of repaying the bailout money to the government.
Though Morgan Stanley’s investment banking revenue was strong in the reported quarter, its conservative approach to trading hindered its ability to reap higher profits to offset the special charges. The company’s capital ratios are among the sturdiest in the industry indicating that it had pulled higher cash in reserves rather than betting on riskier assets. We maintain our Neutral recommendation on the stock.
Read the full analyst report on “MS”
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