Terms

Series

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

Liquidation Preference

$25.00

Coupon Rate

6.875%

Rate Type

Fixed To Floating

Annual Dividend

$1.72

Payment Frequency

Quarterly

Cumulative

No

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

January 15, 2024

First Call Price

$25.00

Redemption Notice Period

30 days

Capital Stack Ranking

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

34,000,000

Prospectus Summary

Morgan Stanley's Series F Fixed-to-Floating Rate Non-Cumulative Preferred Stock is offered as depositary shares, each representing a 1/1,000th interest in one underlying preferred share with a $25,000 liquidation preference (equivalent to $25 per depositary share). The security pays a fixed 6.875% per annum through January 14, 2024, then resets quarterly to 3-month USD LIBOR plus 394 basis points in perpetuity. Dividends are non-cumulative — if the Board does not declare a dividend for any quarter, that payment is permanently lost and holders have no claim to it in future periods. The Series F Preferred ranks senior to Morgan Stanley's common stock and any junior preferred, pari passu with its Series A, C, and E preferred stock, and junior to all debt and other non-equity obligations. As a holding company issue, it is structurally subordinated to all liabilities of Morgan Stanley's operating subsidiaries; creditors of those subsidiaries are paid first before any value flows to the holding company. A Regulatory Capital Treatment Event call allows Morgan Stanley to redeem the entire issue within 90 days if a change in law or regulation creates more than an insubstantial risk that the Series F will no longer qualify as Additional Tier 1 capital — giving the issuer, not investors, control over early redemption in a regulatory stress scenario. At the $25 offering price, the initial fixed-period yield is 6.875% (~$1.719 annually, paid in ~$0.430 quarterly installments on January 15, April 15, July 15, and October 15, commencing January 15, 2014). The record date is the 15th calendar day prior to each payment date. Dividends paid to U.S. corporate holders qualify for the dividends-received deduction; qualification for the individual 15%/20% QDI rate is not confirmed in the prospectus. The dividend stopper prevents any payment on common stock or junior securities in a period where the prior quarter's Series F dividend was not paid in full — but because dividends are non-cumulative and entirely at the Board's discretion, there is no guarantee any individual quarterly payment will be made.

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 F Preferred Stock for the latest completed dividend period, it is blocked from paying dividends on or repurchasing common stock and other junior stock; conversely, unpaid dividends on any series ranking senior to Series F Preferred Stock block payments on Series F Preferred Stock.

Other Preferreds from Morgan Stanley

Div Score Breakdown

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