Morgan Stanley Raises $2.75 Billion in Sale of Five-Year Bonds

Morgan Stanley (MS) issued $2.75 billion of five-year debt after reporting earnings last week that beat analysts’ estimates.

The owner of the world’s largest brokerage sold $2 billion of 2.5 percent securities to yield 95 basis points more than similar-maturity Treasuries and $750 million of floating-rate notes paying 85 basis points more than the three-month London interbank offered rate, according to data compiled by Bloomberg. The securities were expected to be rated Baa2 by Moody’s Investors Service.

The lender joins JPMorgan Chase & Co. and SunTrust Banks Inc. in selling floating-rate securities today. JPMorgan issued $750 million of five-year floaters at a relative yield of 63 basis points as part of its $5.25 billion offering, Bloomberg data show.

It’s been about nine months since New York-based Morgan Stanley previously sold floaters in benchmark size, meaning issues that typically are at least $500 million. The bank sold $700 million of five-year notes in April to yield 128 basis points more than Libor, Bloomberg data show.

The lender’s fourth-quarter net income fell to $181 million, or 7 cents a share, from $594 million, or 29 cents, a year earlier, it said in a Jan. 17 statement. Profit was 50 cents a share excluding an accounting charge tied to the firm’s own debt, a tax benefit and legal expenses, beating the 44-cent average estimate of 26 analysts surveyed by Bloomberg.

To contact the reporter on this story: Sarika Gangar in New York at sgangar@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net

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