Terms

Series

Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series E

Liquidation Preference

$25.00

Coupon Rate

7.125%

Rate Type

Fixed To Floating

Annual Dividend

$1.78

Payment Frequency

Quarterly

Cumulative

No

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

October 15, 2023

First Call Price

$25.00

Redemption Notice Period

30 days

Capital Stack Ranking

Junior To: All Indebtedness And Non-Equity Claims Of Morgan Stanley, Any Preferred Stock Expressly Stated To Be Senior To Series E Preferred Stock, All Obligations Of Morgan Stanley Subsidiaries (Structural Subordination); Pari Passu With: Series A Floating Rate Non-Cumulative Preferred Stock, Series C 10% Non-Cumulative Non-Voting Perpetual Preferred Stock, Any Other Preferred Stock Not Expressly Senior Or Junior; Senior To: Common Stock, Any Capital Stock Expressly Junior To Series E Preferred Stock

Regulatory (Basel III) Call

Yes

Tax Classification

Qualified Dividend

Qualifies for QDI

No

Qualifies for DRD

Yes

Depositary Share Fraction

0.001

Shares Offered

30,000,000

Prospectus Summary

Morgan Stanley's Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series E, is offered as 30 million depositary shares, each representing 1/1,000th of an underlying preferred share with a $25,000 liquidation preference (equivalent to $25 per depositary share). The stock pays a fixed dividend of 7.125% per annum through October 14, 2023, then resets to 3-month USD LIBOR plus 432 basis points quarterly thereafter. It is perpetual with an optional call at par on any dividend payment date on or after October 15, 2023. Dividends are non-cumulative: if the board does not declare a dividend for any quarter, that dividend is permanently lost and holders have no claim to it in any future period. As a holding company issuance, the Series E Preferred Stock sits below all of Morgan Stanley's debt and non-equity obligations, and is effectively subordinated to the creditors of its operating subsidiaries (structural subordination). It ranks pari passu with the existing Series A and Series C preferred stock, and senior only to common stock and expressly junior securities. A Regulatory Capital Treatment Event call is included: if a change in law or regulation causes the stock to lose its treatment as Additional Tier 1 capital under Federal Reserve guidelines, Morgan Stanley may redeem the entire series (not in part) within 90 days — giving the issuer an exit if regulators strip the capital credit, which is a meaningful call risk for investors seeking long-duration income. At the $25 offering price and a 7.125% fixed rate, the current yield is 7.125%, or approximately $0.4469 per depositary share quarterly. Dividends are paid on January 15, April 15, July 15, and October 15, with a record date 15 calendar days before each payment date. Dividends paid to corporate U.S. holders qualify for the dividends-received deduction (DRD); the prospectus does not affirmatively confirm qualified dividend income (QDI) eligibility for individual holders. Dividend stopper mechanics mean that if Morgan Stanley misses a full dividend payment on Series E for any quarter, it cannot pay dividends on or repurchase common stock or junior securities — providing a limited protection layer — but payments can be interrupted entirely at board discretion without triggering any default or cure obligation.

Summarized from the SEC prospectus filing.

Distribution History

Floating Rate Terms

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If Morgan Stanley has not paid full dividends on the Series E Preferred Stock for the latest completed dividend period, it may not pay dividends on or repurchase common stock or other junior securities; conversely, if Morgan Stanley has failed to pay dividends on any preferred stock ranking senior to Series E, it cannot pay dividends on Series E Preferred Stock until those senior arrears are cleared.

Other Preferreds from Morgan Stanley

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 51 (Average)