8-KShareholder MattersCorporate ChangesOther Events+1

MORGAN STANLEY 8-K Report, Rights Modification (Oct 25, 2021)

Filed October 25, 2021For Securities:MSMS-PKMS-POMS-PQMS-PAMS-PFMS-PIMS-PLMS-PPMS-PEMSTLW

Summary

Morgan Stanley (MS) filed an 8-K report on October 25, 2021, detailing the establishment and terms of its 4.250% Non-Cumulative Preferred Stock, Series O. This filing indicates the issuance of this new series of preferred stock, which carries a liquidation preference of $25,000 per share. The key implications for investors, particularly common stockholders, stem from the restrictions placed on the company's ability to declare dividends or acquire its "junior stock" (which includes common stock) if full dividends on the Series O Preferred Stock are not paid. This filing also references related exhibits concerning the offering and sale of depositary shares representing interests in this new preferred stock, as well as legal opinions and consents.

Key Highlights

  • 1Morgan Stanley established its 4.250% Non-Cumulative Preferred Stock, Series O.
  • 2The Series O Preferred Stock has a liquidation preference of $25,000 per share.
  • 3The issuance of Series O Preferred Stock imposes restrictions on dividends and acquisitions of Morgan Stanley's junior stock (including common stock) if Series O dividends are not fully paid.
  • 4The filing includes references to exhibits related to the offering and sale of depositary shares for the Series O Preferred Stock.
  • 5This action appears to be part of a broader offering strategy for this new preferred stock series.
  • 6Legal documentation and opinions regarding the issuance are also part of the filing.

Frequently Asked Questions

The Series O Preferred Stock is a new class of preferred stock issued by Morgan Stanley. It is non-cumulative, has a dividend rate of 4.250%, and a liquidation preference of $25,000 per share. This means that if Morgan Stanley were to liquidate, holders of Series O Preferred Stock would be entitled to receive $25,000 per share before any distributions are made to common stockholders.

The most significant impact on common stockholders is the restriction on Morgan Stanley's ability to declare or pay dividends on, or purchase, redeem, or otherwise acquire its junior stock (which includes common stock). These actions are restricted if the full dividends on the Series O Preferred Stock are not declared and paid. This prioritizes dividend payments to Series O preferred holders over potential distributions to common stockholders.

Non-cumulative means that if Morgan Stanley fails to pay the dividend for a particular period, that missed dividend is not carried forward and does not accumulate. The company is not obligated to pay missed non-cumulative dividends in the future. However, as stated in the filing, full dividends must be paid for current periods to avoid restrictions on junior stock actions.

Yes, this 8-K filing announces the establishment and terms of the Series O Preferred Stock and references exhibits related to its offering and sale. This indicates that Morgan Stanley is likely raising capital through the issuance of depositary shares representing interests in this preferred stock.