Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Morgan Stanley Outlook Lifted to Postive as Risk Cut

July 24 (Bloomberg) -- Morgan Stanley had its credit rating outlook raised to positive from neutral by Moody’s Investors Service, two years after the ratings company cut the bank’s grade by two levels.

Morgan Stanley, which topped analysts’ estimates when it announced second-quarter results last week, has made sustainable improvements to profitability and lowered risk in its trading unit, Moody’s said today in a statement. New York-based Morgan Stanley’s senior debt rating is Baa2, two levels above junk, and may be upgraded in the “medium-term,” Moody’s said.

“To the extent Morgan Stanley can demonstrate additional, sustainable progress in growing its profitability without increasing its risk profile, this could result in a ratings upgrade,” Moody’s Senior Vice President David Fanger said in the statement.

In 2012, Moody’s threatened to downgrade Morgan Stanley’s rating by three levels, the most among the biggest U.S. banks, citing a difficult operating environment and greater regulation. Moody’s only reduced it two levels after Morgan Stanley Chief Executive Officer James Gorman made the case that the steeper cut wasn’t warranted. Still, the bank said some clients stopped trading with it while the review was pending.

In November, Moody’s cut the grade by an additional level after deciding the government would be less inclined to help Morgan Stanley repay creditors in a crisis.

To contact the reporter on this story: Michael J. Moore in New York at mmoore55@bloomberg.net

To contact the editors responsible for this story: Peter Eichenbaum at peichenbaum@bloomberg.net Steven Crabill, Steve Dickson

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.