8-KShareholder MattersCorporate ChangesOther Events+1

MORGAN STANLEY 8-K Report, Rights Modification (Apr 29, 2014)

Filed April 29, 2014For Securities:MSMS-PKMS-POMS-PQMS-PAMS-PFMS-PIMS-PLMS-PPMS-PEMSTLW

Summary

Morgan Stanley filed an 8-K on April 28, 2014, to announce the establishment and terms of two new series of preferred stock: the 6.625% Non-Cumulative Preferred Stock, Series G, and the Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series H. These new preferred stock issuances, with a liquidation preference of $25,000 per share, are structured to potentially impact the company's ability to pay dividends or make distributions on its "junior stock," which includes common stock. Specifically, the terms of the Series G and Series H Preferred Stock introduce restrictions on Morgan Stanley's ability to declare or pay dividends, or acquire its junior stock, if full dividends on these preferred series are not paid or set aside. This filing is significant for existing common shareholders as it clarifies potential limitations on their future dividend payouts and capital distributions, especially in scenarios where preferred dividend obligations are not met. The company also filed related Certificates of Designation and depositary agreements, indicating an active offering and sale of depositary shares representing interests in these preferred stock series.

Key Highlights

  • 1Morgan Stanley established two new series of preferred stock: Series G (6.625% Non-Cumulative) and Series H (Fixed-to-Floating Rate Non-Cumulative).
  • 2Both Series G and Series H Preferred Stock have a liquidation preference of $25,000 per share.
  • 3New restrictions are imposed on paying dividends or making distributions on Morgan Stanley's "junior stock" (including common stock) if full dividends on Series G or Series H Preferred Stock are not met.
  • 4The Certificates of Designation for these preferred stock series were filed with the Secretary of State of Delaware on April 28, 2014.
  • 5The filing indicates the offering and sale of depositary shares representing interests in both Series G and Series H Preferred Stock.
  • 6This action may limit future dividend payments to common shareholders if preferred dividend obligations are not fulfilled.

Frequently Asked Questions

Morgan Stanley is establishing two new series of preferred stock: the 6.625% Non-Cumulative Preferred Stock, Series G, and the Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series H. These are designed for an offering of depositary shares.

The terms of the Series G and Series H Preferred Stock introduce restrictions. If Morgan Stanley fails to declare and pay full dividends on these preferred stocks, it may be unable to declare or pay dividends or make distributions on its "junior stock," which includes common stock. This could limit future dividend payments to common shareholders.

Both the Series G and Series H Preferred Stock have a liquidation preference of $25,000 per share.

The filing includes the Certificates of Designation for the new preferred stock series, indicating their specific terms and rights. It also references the ongoing offering of depositary shares representing interests in these preferred stocks and includes legal opinions and consents related to these issuances.