Summary
Morgan Stanley (MS) has filed an 8-K report detailing the establishment and terms of its 4.875% Non-Cumulative Preferred Stock, Series L. This issuance introduces a new class of preferred stock with a liquidation preference of $25,000 per share, which ranks senior to the company's common stock and other junior securities with respect to dividend payments and liquidation distributions. The filing specifies that the company's ability to pay dividends or acquire its junior stock is contingent upon its fulfillment of dividend obligations for the Series L Preferred Stock.
Key Highlights
- 1Morgan Stanley established its 4.875% Non-Cumulative Preferred Stock, Series L.
- 2The Series L Preferred Stock has a liquidation preference of $25,000 per share.
- 3Dividend payments and distributions on 'junior stock' (including common stock) are restricted if full dividends on Series L Preferred Stock are not paid.
- 4The filing relates to the offering and issuance of depositary shares representing interests in the Series L Preferred Stock.
- 5The Certificate of Designation for the Series L Preferred Stock was filed with the Secretary of State of Delaware.
- 6This issuance may impact the company's flexibility in capital allocation regarding common stock dividends and repurchases if preferred dividends are missed.
Frequently Asked Questions
This 8-K filing formally announces and provides details regarding the establishment of Morgan Stanley's new 4.875% Non-Cumulative Preferred Stock, Series L, including its terms and the implications for junior stock holders.
The Series L Preferred Stock is a non-cumulative preferred stock with a 4.875% dividend rate and a liquidation preference of $25,000 per share. It ranks senior to Morgan Stanley's common stock and other junior securities regarding dividend payments and liquidation distributions.
The Series L Preferred Stock introduces restrictions on Morgan Stanley's ability to declare or pay dividends on, or acquire its junior stock (which includes common stock), if the company fails to declare and pay the full dividends on the Series L Preferred Stock. This means common stock dividends or buybacks could be curtailed if the company is unable to meet its preferred dividend obligations.
Non-cumulative means that if Morgan Stanley fails to pay a dividend on the Series L Preferred Stock in any period, that missed dividend is forfeited and will not accumulate to be paid at a later date. The company is only obligated to pay current period dividends.