Morgan Stanley (MS) Outlook Dims; Three-Notch Credit Downgrade Would Boost Collateral Requirements Substantially
Get Alerts MS Hot Sheet
Price: $87.96 -0.48%
Overall Analyst Rating:
NEUTRAL ( Down)
Dividend Yield: 1.7%
EPS Growth %: +0.6%
Overall Analyst Rating:
NEUTRAL ( Down)
Dividend Yield: 1.7%
EPS Growth %: +0.6%
Join SI Premium – FREE
Morgan Stanley (NYSE: MS) shares are lower Tuesday morning following reports the bank may need to put up an additional $7.2 billion in collateral or terminate payments to counterparties and accept an additional $2.4 billion collateral requirement for certain exchanges and clearing houses.
The current requirements are higher than expectations printed with its February quarterly report which said the bank would been about $868 million on a one-notch cut and $5.2 billion if a two-notch cut should occur. On the exchanges and clearing house front, the numbers would be $160 million and $1.6 billion, respectively.
How the math works out in the one-to-two-notch downgrade and two-to-three-notch downgrade collateral requirements remains a mystery.
Morgan Stanley's rating could be cut from A2 down to Baa2. The firm is the only one of the 17 institutions Moody's put on watch for a three-notch cut in February.
Moody's will make a call on Morgan Stanley in June. Shares are off 1 percent Tuesday.
The current requirements are higher than expectations printed with its February quarterly report which said the bank would been about $868 million on a one-notch cut and $5.2 billion if a two-notch cut should occur. On the exchanges and clearing house front, the numbers would be $160 million and $1.6 billion, respectively.
How the math works out in the one-to-two-notch downgrade and two-to-three-notch downgrade collateral requirements remains a mystery.
Morgan Stanley's rating could be cut from A2 down to Baa2. The firm is the only one of the 17 institutions Moody's put on watch for a three-notch cut in February.
Moody's will make a call on Morgan Stanley in June. Shares are off 1 percent Tuesday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Midday movers: Google, Pepsi rise; Boeing, Zillow fall
- New York Community Bancorp (NYCB): Moody's Upgrades Long-term Issuer Rating to B2, Outlook Positive
- PDD's (PDD) Q4 report 'could be the next share price catalyst' - Morgan Stanley
Create E-mail Alert Related Categories
Credit Ratings, Insiders' BlogRelated Entities
Morgan StanleySign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!